Information for societies on community shares

Many societies use the phrase 'community shares' to describe their share offers. These offers tend to be for shares that are withdrawable (at the discretion of the board of the society), and non-transferable.

The rules of a society will set out the terms of their own shares. These rules can be found on the Mutuals Public Register[1].

The phrase ‘community shares’ is not legally defined. This means different people may use it to mean different things. The Government gives more information about community shares[2].

If you’re issuing shares to the public, it’s important you understand the legal and regulatory requirements. Read our guidance on society shares[3].

Regulation of society shares

We don't regulate withdrawable, non-transferable shares offered by societies.

This means investors can’t complain to the Financial Ombudsman Service (FOS) and don’t have access to the Financial Services Compensation Scheme (FSCS) if things go wrong.

If individuals have concerns about your promotion of society shares, they can complain to the Advertising Standards Authority[4].

Withdrawable shares

Most societies offer shares that are withdrawable (at the discretion of the board of the society) and non-transferable.

If your society offers withdrawable shares, your rules should include the process of withdrawal, and the maximum interest someone may have in the shares of the society.

Transferable shares

Shares can be transferable (as well as being withdrawable or not).

Transferable shares are treated differently from non-transferable shares under the Financial Services and Markets Act 2000 (FSMA).

If your society issues transferable shares, we recommend you take legal advice as to whether the share issue falls within the FSMA.