Friendly Societies Act 1992

67B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

67D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

68 Accounting records ...

(1) Every friendly society and every registered branch shall— (a) cause accounting records to be kept; . . . (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . in accordance with this section. (2) The accounting records must be sufficient to show and explain the transactions of the society or branch and— (a) disclose, with reasonable accuracy and promptness, the financial position of the society or branch at any time; (b) enable the committee of management properly to discharge the duties imposed on them by or under this Act or the 1974 Act (and, where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework) and their function of direction of the affairs of the society or branch; and (c) enable the society or branch properly to discharge the duties imposed on it by or under this Act or the 1974 Act (and, where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework), and must be kept in an orderly manner. (3) The accounting records shall in particular contain— (a) entries from day to day of all sums received and paid by the society or branch and the matters in respect of which they are received or paid; (b) entries from day to day of every transaction entered into by the society or branch which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society or branch other than insignificant assets or liabilities in respect of the management of the society or branch; and (c) a record of the assets and liabilities of the society or branch. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8) The accounting records shall be kept at the registered office of the society or branch or at such other place or places as the committee of management thinks fit, and shall at all times be open to inspection by the committee of management. (9) Accounting records shall be preserved for 6 years from the date on which they were made. (10) Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the society shall also secure that such accounting records are kept . . . by them as will enable the society to comply with the requirements of this section in relation to the business of the society and those subsidiaries and jointly controlled bodies. (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

69 Duty to prepare accounts.

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69A Duty to prepare individual accounts

(1) The committee of management of every friendly society or registered branch must prepare accounts for the society or branch for each of its financial years. Those accounts are referred to in this Part as the society’s or branch’s “individual accounts”. (2) The individual accounts of a friendly society or registered branch of a society may be prepared— (a) in accordance with section 69B (“Friendly Societies Act individual accounts”), or (b) in accordance with UK-adopted international accounting standards (“IAS individual accounts”). This subsection is subject to subsections (2A) and (3), and section 69I (consistency of accounts). (2A) The individual accounts of— (a) a friendly society that is a charity, or (b) a registered branch of a friendly society that is a charity, must be Friendly Societies Act individual accounts. (3) After the first financial year in which the committee of management of a friendly society or registered branch prepares IAS individual accounts (“the first IAS year”), all subsequent individual accounts of the society or branch must be prepared in accordance with UK-adopted international accounting standards unless there is a relevant change of circumstance. This is subject to subsection (4A). (4) There is a relevant change of circumstance if, at any time during or after the first IAS year— (a) the society or branch becomes a subsidiary undertaking of another undertaking and individual accounts for that undertaking are not prepared in accordance with UK-adopted international accounting standards, (aa) the society or branch ceases to be a subsidiary undertaking, (b) the society or branch ceases to be a society or part of a society with securities admitted to trading on a UK regulated market, or (c) a parent undertaking of the society or branch ceases to be an undertaking with securities admitted to trading on a UK regulated market. “UK regulated market” has the meaning given in Article 2.1.13A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 and amending Regulation (EU) No. 648/2012. (4A) After a financial year in which the committee of management of a friendly society or registered branch prepares IAS individual accounts, the committee of management may change to preparing Friendly Societies Act individual accounts for a reason other than a relevant change of circumstance provided it has not changed to Friendly Societies Act individual accounts in the period of five years preceding the first day of that financial year. (4B) In calculating the five year period for the purpose of subsection (4A), no account should be taken of a change due to a relevant change of circumstance. (5) If, having changed to preparing Friendly Societies Act individual accounts ..., the committee of management again prepares IAS individual accounts for the society or branch, subsections (3) and (4) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

69B Friendly Societies Act individual accounts

(1) Friendly Societies Act individual accounts must comprise— (a) a balance sheet as at the last day of the financial year, and (b) an income and expenditure account. (2) The balance sheet must give a true and fair view of the state of affairs of the society or branch as at the end of the financial year; and the income and expenditure account must give a true and fair view of the income and expenditure of the society or branch for the financial year. (3) Friendly Societies Act individual accounts must comply with the requirements of regulations made under section 69C as to the form and content of the balance sheet and income and expenditure account and additional information to be provided by way of notes to the accounts or otherwise. (4) Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s or branch’s individual accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them. (5) If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the committee of management must depart from that provision to the extent necessary to give a true and fair view. (6) Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts. (7) The Treasury may by regulations – (a) add to the classes of documents to be comprised in a society’s or branch’s Friendly Societies Act individual accounts under subsection (1); (b) make provision as to the matters to be included in any document so added; (c) modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s or branch’s Friendly Societies Act individual accounts; (d) reduce the classes of documents to be comprised in a society’s or branch’s Friendly Societies Act individual accounts. (8) Regulations under subsection (7) – (a) may make different provision for different cases, and (b) may include incidental and supplementary provisions.

69C Form and contents of Friendly Societies Act individual accounts

(1) The Treasury must by regulations make provision with respect to the form and content of Friendly Societies Act individual accounts. (2) The Treasury may by regulations make provision with respect to additional information to be contained in Friendly Societies Act individual accounts, whether in the form of notes or otherwise. (3) The regulations may, in particular– (a) prescribe accounting principles and rules; (b) require corresponding information for a preceding financial year; (c) make different 'provision for different descriptions of society or branch.

69D IAS individual accounts

Where the committee of management of a friendly society prepare IAS individual accounts for a society or branch, it must state in the notes to those accounts that the accounts have been prepared in accordance with UK-adopted international accounting standards.

69E Duty to prepare group accounts

(1) If at the end of a financial year an incorporated friendly society has subsidiary undertakings, the committee of management, in addition to preparing individual accounts for the year, must prepare consolidated accounts for the year for the society and those undertakings taken as a whole, except as provided by regulations under subsection (7). Those accounts are referred to in this Part as the society’s “group accounts”. (2) Certain friendly societies are obliged by section 403(1) of the Companies Act 2006 to prepare their group accounts in accordance with UK-adopted international accounting standards (“IAS group accounts”). (3) The group accounts of other friendly societies may be prepared – (a) in accordance with section 69F (“Friendly Societies Act group accounts”), or (b) in accordance with UK-adopted international accounting standards (“IAS group accounts”). This subsection is subject to the following provisions of this section and section 69I (consistency of accounts). (3A) The group accounts of a friendly society that is a charity must be Friendly Societies Act group accounts. (4) After the first financial year in which the committee of management of a friendly society prepares IAS group accounts (“the first IAS year”), all subsequent group accounts of the society must be prepared in accordance with UK-adopted international accounting standards unless there is a relevant change of circumstance. This is subject to subsection (5A). (5) There is a relevant change of circumstance if, at any time during or after the first IAS year— (a) the society becomes a subsidiary undertaking of another undertaking and accounts for that undertaking and its subsidiary undertakings (taken as a whole) are not prepared in accordance with UK-adopted international accounting standards, (b) the society ceases to be a society with securities admitted to trading on a UK regulated market, or (c) a parent undertaking of the society ceases to be an undertaking with securities admitted to trading on a UK regulated market. ... (5A) After a financial year in which the committee of management of a friendly society prepares IAS group accounts, the committee of management may change to preparing Friendly Societies Act group accounts for a reason other than a relevant change of circumstance provided it has not changed to Friendly Societies Act group accounts in the period of five years preceding the first day of that financial year. (5B) In calculating the five year period for the purpose of subsection (5A), no account should be taken of a change due to a relevant change of circumstance. (6) If, having changed to preparing Friendly Societies Act group accounts ..., the committee of management again prepares IAS group accounts for the society, subsections (4) and (5) apply again as if the first financial year for which such accounts are again prepared were the first IAS year. (7) The Treasury may by regulations exempt specified descriptions of incorporated friendly societies with subsidiaries from any duty to prepare group accounts. (8) Regulations under subsection (7) may exempt societies by reference to any criterion and may make different provision for different descriptions of societies. (9) In this subsection “UK regulated market” has the meaning given in Article 2.1.13A of Regulation (EU) No. 600/2014 of the European Parliament and of the Council of 15 May 2014 and amending Regulation (EU) No. 648/2012.

69F Friendly Societies Act group accounts

(1) Friendly Societies Act group accounts must comprise— (a) a balance sheet dealing with the state of affairs of the society and its subsidiary undertakings; (b) an income and expenditure account showing the income and expenditure of the society and its subsidiary undertakings. (2) Friendly Societies Act group accounts must give a true and fair view of the state of affairs as at the end of the financial year, and the income and expenditure for the financial year, of the society and the subsidiary undertakings included in the group accounts as a whole, so far as concerns the members of the society. (3) Friendly Societies Act group accounts must comply with the requirements of regulations made under section 69G as to the form and content of the group accounts and additional information to be provided by way of notes to the accounts or otherwise. (4) Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s group accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them. (5) If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the committee of management must depart from that provision to the extent necessary to give a true and fair view. (6) Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts. (7) The Treasury may by regulations— (a) add to the classes of documents to be comprised in a society’s Friendly Societies Act group accounts under subsection (1); (b) make provision as to the matters to be included in any document so added; (c) modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s Friendly Societies Act group accounts; and (d) reduce the classes of documents to be comprised in a society’s Friendly Societies Act group accounts. (8) Regulations under subsection (7)— (a) may make different provision for different descriptions of society; and (b) may include incidental and supplementary provisions.

69G Form and content of Friendly Societies Act group accounts

(1) The Treasury must by regulations make provision with respect to the form and content of Friendly Societies Act group accounts. (2) The Treasury may by regulations make provision with respect to additional information to be contained in Friendly Societies Act group accounts, whether in the form of notes or otherwise. (3) The regulations may, in particular— (a) prescribe accounting principles and rules; (b) require corresponding information for a preceding financial year; and (c) make different provision for different descriptions of society.

69H IAS group accounts

Where the committee of management of a friendly society prepares IAS group accounts, it must state in the notes to those accounts that the accounts have been prepared in accordance with UK-adopted international accounting standards.

69I Consistency of accounts

(1) The committee of management of a friendly society that prepares group accounts must secure that the individual accounts of— (a) the friendly society, (b) each of its subsidiary undertakings, and (c) each of its registered branches, are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so. (2) Subsection (1) only applies to accounts of subsidiary undertakings which are— (a) required to be prepared under Part 15 of the Companies Act 2006, or (b) required to be prepared under Part 6 of this Act. (3) Subsection (1) does not require accounts of undertakings that are charities to be prepared using the same financial reporting framework as accounts of undertakings which are not charities. (4) Subsection (1)(a) does not apply where the committee of management of a friendly society prepares IAS group accounts and IAS individual accounts. (5) The committee of management of a society which has subsidiary undertakings must ensure that, except where in its opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the society’s own financial year.

69J Disclosures relating to members of the committee of management and employees of the society

(1) The information specified in Schedule 13D must be given in notes to a friendly society’s or a registered branch’s annual accounts, subject to the provisions of subsection (5). (2) In that Schedule— Part 1 relates to emoluments and other benefits of members of the committee of management and others and to loans and other dealings in favour of members of the committee and connected persons; and Part 2 relates to information about the employees of a society. (3) It is the duty of any member of the committee of management, and any person who has been at any time in the preceding five years a member of the committee, to give notice to the society of such matters relating to himself as may be necessary for the purposes of Part 1 of Schedule 13D. (4) A person who makes default in complying with subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding level 3 on the standard scale. (5) Paragraphs 11 and 13 of Schedule 13D do not apply to non-directive friendly societies or their registered branches. (6) The annual accounts of a friendly society which is required to produce group accounts under section 69E must include the material specified by paragraphs 11 to 13 not only in respect of the society but also in respect of the society and its subsidiaries in combination. (7) The Treasury may, by order, modify the provisions of Schedule 13D. (8) An order under this section may— (a) make consequential amendments or repeals of other provisions of this Act; (b) make such transitional or saving provisions as appear to the Treasury to be necessary or expedient; (c) make different provision for different cases.

69K Disclosures about related undertakings

(1) The information specified in Schedule 13E must be given in notes to a friendly society’s or a registered branch’s annual accounts. (2) In the case of a friendly society whose committee of management is not required to prepare consolidated accounts, the information specified in Part 1 of that Schedule must be given. (3) In the case of a friendly society whose committee of management is required to prepare consolidated accounts, the information specified in Part 2 of that Schedule must be given. (4) The Treasury may, by order, modify the provisions of Schedule 13E. (5) An order under this section may also— (a) make consequential amendments of or repeals in other provisions of this Act; (b) make such transitional or saving provisions as appear to the Treasury to be necessary or expedient; (c) make different provision for different cases.

69L Disclosures relating to off-balance-sheet arrangements

(1) If in any financial year— (a) a friendly society or registered branch has been party to arrangements that are not reflected in its balance sheet, and (b) at the balance sheet date the risks or benefits arising from those arrangements are material, the information required by this section must be given in notes to the society’s or branch’s annual accounts. (2) The information required is— (a) the nature and business purpose of the arrangements, and (b) the financial impact of the arrangements on the society or branch. (3) The information need only be given to the extent necessary for enabling the financial position of the society or branch to be assessed. (4) Where a friendly society is required to prepare consolidated group accounts, this section applies in relation to those accounts as if the undertakings included in the consolidation were a single friendly society.

69M Disclosure of auditor remuneration

(1) The information specified in Schedule 13F must be given in notes to a friendly society’s or a registered branch’s annual accounts. (2) The Treasury may, by order, modify the provisions of Schedule 13F. (3) An order under this section may— (a) make consequential amendments or repeals of other provisions of this Act; (b) make such transitional or saving provisions as appear to the Treasury to be necessary or expedient, or (c) make different provision for different cases.

70 Contents and form of annual accounts.

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71 Report on a friendly society’s affairs by the committee of management.

(1) The committee of management of a friendly society shall prepare for submission to the annual general meeting of the society a report on the activities of the society containing— (a) a fair review of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any) complying with section 71A; (aa) a description of the principal risks and uncertainties facing the society, its subsidiary undertakings and bodies that it jointly controls (if any); (b) such information relating to such aspects of the activities of the society as may be prescribed by regulations made by the . . . Treasury; and (c) a statement whether any and, if so, what activities carried on during the year by the society are believed to have been carried on outside its powers. (1A) If the friendly society has subsidiary undertakings, the report may, where appropriate, give greater emphasis to those matters which are significant to the society and its subsidiary undertakings taken as a whole. (2) Where an incorporated friendly society has subsidiaries or jointly controls other bodies, the report shall- (a) contain such information relating to such aspects of the activities of any subsidiaries or bodies which it jointly controls as may be prescribed by regulations made by the . . . Treasury; (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) contain a statement whether any and, if so, what activities carried on during the year by any of its subsidiaries or by any body which it jointly controls are believed to have been carried on outside the powers of the subsidiary or jointly controlled body. (3) If a report under this section does not contain the prescribed information or the information in the report is not given in accordance with the regulations, each member of the committee of management shall be guilty of an offence and liable— (a) on conviction on indictment, to a fine; and (b) on summary conviction, to a fine not exceeding the statutory maximum.

71A Business review

(1) The review required for the purposes of section 71(1)(a) is a balanced and comprehensive analysis of— (a) the development and performance of the business of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) during the financial year, and (b) the position of the friendly society, its subsidiary undertakings and bodies that it jointly controls (if any) at the end of that year, consistent with the size and complexity of the business. (2) The review must, to the extent necessary for an understanding of the development, performance or position of the business of the society, its subsidiary undertakings and bodies that it jointly controls (if any), include— (a) analysis using financial key performance indicators, and (b) where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters. (3) The review must, where appropriate, include references to additional explanations of amounts included in the annual accounts of the society. (4) In this section “key performance indicators” means factors by reference to which the development, performance or position of the business of the society, any subsidiary undertakings it has and any bodies that it jointly controls, can be measured effectively.

72 Auditors’ appointment, tenure, qualifications, etc.

(1) Every friendly society and every registered branch shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting. (2) Schedule 14 to this Act has effect as regards— (a) the appointment of auditors; (b) their qualifications and grounds of disqualification; (c) the resignation and removal of auditors; and (d) the remuneration of auditors. (3) Schedule 14A to this Act has effect with regard to the appointment and removal of auditors of societies subject to special requirements.

73 Auditor’s report.

(1) The auditor of a friendly society or of a registered branch shall make a written report to the members on the annual accounts which are to be laid before the society or branch at the annual general meeting during his tenure of office. (2) The auditor of a friendly society or registered branch shall, in preparing his report, carry out such investigations as will enable him to form an opinion as to— (a) whether adequate accounting records have been kept under section 68 above; (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (c) whether the annual accounts are in agreement with the accounting records; ... (2A) If the auditor is of the opinion that— (a) adequate accounting records have not been kept under section 68, or (b) the annual accounts are not in agreement with the accounting records, the auditor must state that fact in his report. (3) If the auditor fails to obtain all the information and explanations and the access to documents which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report. (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4A) The auditor shall, in his report— (a) state whether, in his opinion, based on the work undertaken in the course of the audit— (i) the information given in the report of the committee of management for the financial year for which the annual accounts are prepared is consistent with those accounts, (ii) that report has been prepared in accordance with this Act and the regulations made under it, (b) state whether, in the light of the knowledge and understanding of the society or registered branch and its environment obtained in the course of the audit, the auditor has identified material misstatements in the report of the committee of management, and (c) if applicable, give an indication of the nature of each of the misstatements referred to in paragraph (b). (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5A) The auditor’s report must include— (a) the identity of the friendly society or registered branch whose annual accounts are the subject of the audit, (b) a description of the annual accounts that are the subject of the audit (including the period covered by those accounts), (c) a description of the financial reporting framework that has been applied in the preparation of those accounts, and (d) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted. (5B) The report must clearly state the opinion of the auditor as to whether the annual accounts— (a) give a true and fair view— (i) in the case of an individual balance sheet, of the state of affairs of the society or branch as at the end of the financial year, (ii) in the case of an individual income and expenditure account, of the income and expenditure of the society or branch for the financial year, and (iii) in the case of the group accounts of an incorporated friendly society, of the state of affairs as at the end of the financial year and of the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society, (b) have been properly prepared in accordance with the relevant financial reporting framework, and (c) have been prepared in accordance with the requirements of this Act (and where applicable, section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework). (5C) The auditor’s report must— (a) be either unqualified or qualified, (b) include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report, (c) include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the ability of the friendly society or registered branch to continue to adopt the going concern basis of accounting, and (d) identify the auditor’s place of establishment. (6) Where more than one person is appointed as auditor, all the persons appointed must jointly make a report under this section, which must include a statement as to whether they all agree on— (a) the matters contained in the report, (b) the statements given under subsections (2A), (3) and (4A), and (c) the indications given under subsection (4A). (7) Where the persons do not all agree on all of those things, the report must— (a) include the opinions of each person appointed, and (b) give reasons for the disagreement.

74 Signature of auditor’s report

(1) The auditor’s report to the members of a friendly society or registered branch must state the name of the auditor (or, where more than one person is appointed as auditor, all of their names) and be signed and dated. (2) Where the auditor is an individual, the report must be signed by him. (3) Where the auditor is a firm, the report must be signed— (a) in the case of a friendly society subject to special requirements, by the senior statutory auditor in his own name, for and on behalf of the firm; (b) in any other case— (i) in the name of the firm by a person authorised to sign on its behalf, or (ii) if the firm has identified a senior statutory auditor in relation to the audit, by that person, in his own name, for and on behalf of the firm. (4) Where more than one person is appointed as auditor, the report must be signed by all those appointed.

74A Senior statutory auditor

(1) The senior statutory auditor means the individual identified by the firm as senior statutory auditor in relation to the audit in accordance with the standards or guidance mentioned in section 504(1) of the Companies Act 2006. (2) The person identified as senior statutory auditor must be eligible for appointment as auditor of the society in question in accordance with— (a) in the case of a friendly society subject to special requirements, Chapter 2 of Part 42 of the Companies Act 2006; (b) in any other case, Schedule 14 to this Act. (3) The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his having signed the auditor’s report, subject to any civil liability to which he would not otherwise be subject.

74B Names to be stated in copies of auditor’s report filed or published

(1) The copies of the auditor’s report sent ... under section 78(1) or (2) below, and every copy of the auditor’s report that is published by or on behalf of the friendly society or registered branch, must— (a) state the name of the auditor and (where the auditor is a firm and the report is signed by a senior statutory auditor) the name of the person who signed it as senior statutory auditor, or (b) if the conditions in section 74C (circumstances in which names may be omitted) are met, state that a resolution has been passed and notified ... in accordance with that section. (1A) If more than one person is appointed as auditor, the reference in subsection (1)(a) to the name of the auditor is to be read as a reference to the names of all the auditors. (2) For the purposes of this section a society or branch is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it. (3) If a copy of the auditor’s report is sent ... or published without the statement required by this section, an offence is committed by— (a) the society or branch, and (b) every officer of the society or branch who is in default. (4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

74C Circumstances in which names may be omitted

(1) An auditor’s name, and (where applicable) the name of the person who signed the report as senior statutory auditor, may be omitted from— (a) the copies of the report sent to the FCA and, if the society is a PRA-authorised person, the PRA under section 78(1) or (2) below, and (b) published copies of the report, if the following conditions are met. (2) The conditions are that the friendly society or registered branch— (a) considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or senior statutory auditor, or any other person, would be subject to violence or intimidation, has resolved in general meeting that the name should not be stated, and (b) has given notice of the resolution to the FCA and, if the society is a PRA-authorised person, the PRA, stating— (i) the name of the society or branch, (ii) the financial year of the society to which the report relates, and (iii) the name of the auditor and (where applicable) the name of the person who signed the report as senior statutory auditor.

75 Auditor’s rights to information and to attend meetings.

(1) The auditor of a friendly society is entitled— (a) to access at all times to the books, accounts and vouchers of the society; (b) to require from the officers of the society such information and explanations as he thinks necessary for the performance of his duties as auditor; (c) to receive from the society— (i) notice of any general meeting of the society and of any matter relating to the business of such a meeting of which notice is given (by whatever means) to the society’s members; and (ii) copies of any communications sent to the society’s members with respect to any such meeting; and (d) to attend any general meeting of the society and to be heard on any part of the business of the meeting which concerns him as auditor; and the auditor of a registered branch has the corresponding rights to those specified in paragraphs (a) to (d) above, with the substitution for references to the society of references to the branch. (2) The right to attend or be heard at a meeting is exercisable in the case of a body corporate or partnership by an individual authorised by it in writing to act as its representative at the meeting. (3) An officer of a friendly society is guilty of an offence if he knowingly or recklessly makes to the society’s auditor a statement (whether written or oral) which— (a) conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, as auditor of the society; and (b) is misleading, false or deceptive in a material particular. (4) An officer of a registered branch is guilty of an offence if he knowingly or recklessly makes to the auditor of the branch a statement (whether written or oral) which— (a) conveys or purports to convey any information or explanations which the auditor requires, or is entitled to require, as auditor of the branch; and (b) is misleading, false or deceptive in a material particular. (5) A person guilty of an offence under subsection (3) or (4) above is liable — (a) on conviction on indictment, to imprisonment for a term not exceeding 2 years, or to a fine, or to both; and (b) on summary conviction, to imprisonment for a term not exceeding 6 months or to a fine not exceeding the statutory maximum, or to both. (6) Where a subsidiary of a friendly society is a company (as defined in section 1(1) of the Companies Act 2006), the subsidiary and its auditors must give to the auditors of the friendly society such information and explanations as they may reasonably require for the purposes of their duties as auditors of the society. (7) If— (a) a subsidiary to which subsection (6) above applies fails to comply with that subsection; or (b) an auditor of such a subsidiary fails without reasonable excuse to comply with that subsection, the subsidiary or auditor is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale. (8) An incorporated friendly society having a subsidiary to which subsection (6) above does not apply shall, if required by its auditor to do so, take all such steps as are reasonably open to it to obtain from the subsidiary such information and explanations as he may reasonably require for the purposes of his duties as auditor of that society. (9) If an incorporated friendly society fails to comply with subsection (8) above, it is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale.

76 Approval and signing of accounts.

(1) The annual accounts of a friendly society or a registered branch shall be approved by the committee of management. (2) The accounts so approved shall be signed by the secretary of the society or branch; and the signature shall be on the balance sheet. (3) Every copy of the balance sheet which is laid before the society or branch in general meeting, or is otherwise circulated, published or issued, shall state the name of the secretary of the society or branch. (4) The copy of the balance sheet of a friendly society or a registered branch which is sent ... under section 78 below shall be signed by the secretary of the society or branch. (5) If annual accounts of a society or branch are approved which do not comply with the requirements of this Act, every member of the committee of management who is party to their approval and who knows that they do not comply or is reckless as to whether they comply is guilty of an offence and liable on summary conviction to a fine not exceeding level 5 on the standard scale. For this purpose every member of the committee at the time the accounts are approved shall be taken to be a party to their approval unless he shows that he took all reasonable steps to prevent their being approved. (6) If a copy of the balance sheet of a society or branch— (a) is laid before the society or branch, or otherwise circulated, published or issued, without the balance sheet having been signed as required by this section or without the required statement of the signatory’s name being included; or (b) is sent ... without being signed as required by this section, the society or branch and every officer of it who is in default is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

77 Information on appointed actuary to be annexed to balance sheet.

(1) This section applies to any copy of a friendly society’s balance sheet which— (a) is furnished under section 78 to the FCA and, if the society is a PRA-authorised person, the PRA; (aa) is furnished to either the FCA or the PRA at its request; (b) is laid before the society at its annual general meeting; or (c) is furnished to a member at his request. (2) Subject to the provisions of this section, a friendly society shall annex to each copy of its balance sheet to which this section applies as respects every person who, at any time during the financial year to which the balance sheet relates, was its appointed actuary, a statement of the following information— (a) whether the actuary was a member of the society or any subsidiary of the society at any time during that year; (b) particulars of any pecuniary interest of the actuary in any transaction between the actuary and the society or any subsidiary of the society and subsisting at any time during that year or, in the case of transactions of a minor character, a general description of such interests; (c) the aggregate amount of any remuneration and the value of any other benefits other than a pension or other future or contingent benefit under any contract of service of the actuary with, or contract for services by the actuary to, the society or any subsidiary of the society, receivable by the actuary in respect of any period in that year; and (d) a general description of any other pecuniary benefit (including any pension and other future contingent benefit) received by the actuary from the society or any subsidiary of the society in that year or receivable by him from the society or any such subsidiary, together with a statement that the society has made a request to the actuary to furnish to it the particulars specified in this subsection and identifying any particulars furnished pursuant to the request. (3) Subsection (2) above applies in relation— (a) to the actuary’s spouse or civil partner; (b) to a partner of the actuary; (c) to any child or step-child of the actuary who is under 18; (d) to any person (other than the society concerned or any subsidiary of that society) of whom the actuary is an employee; and (e) to any body corporate (other than the society concerned or any subsidiary of that society) of which the actuary is a director or which is controlled by him, as it applies in relation to the actuary. (4) For the purposes of subsection (3) above, an actuary shall be taken to control a body corporate if he is a person— (a) in accordance with whose directions or instructions the directors of that body corporate or of a body corporate of which it is a subsidiary are accustomed to act; or (b) who, either alone or with any other person falling within that subsection, is entitled to exercise or controls the exercise of, one-third or more of the voting power at any general meeting of the body corporate or of a body corporate of which it is a subsidiary. (5) If a friendly society fails to annex the statement required by subsection (2) above to a copy of its balance sheet to which this section applies, the society concerned shall be guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.

78 Laying and furnishing of accounts and reports.

(1) The committee of management of a friendly society shall in each year— (a) lay before the society, at the annual general meeting, copies of the annual accounts for the last financial year, the report of the committee of management for that year and the auditor’s report on those accounts; and (b) send to the FCA and, if the society is a PRA-authorised person, the PRA, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and reports. (2) The committee of management of a registered branch shall in each year— (a) lay before the branch, at the annual general meeting, copies of the annual accounts for the last financial year and the auditor’s report on those accounts; and (b) send to the FCA and, if the society is a PRA-authorised person, the PRA, not later than 30th June or 14 days before the annual general meeting, whichever is earlier, two copies of those accounts and that report. (3) Every friendly society shall, as from the date by which at the latest its committee of management is required by subsection (1) above to send them to the FCA and, if the society is a PRA-authorised person, the PRA— (a) make copies of the annual accounts, the report of the committee of management and the auditor’s report available free of charge to members of the society at every office of the society; and (b) send, free of charge, copies of those documents to any member of the society who demands them; and that duty shall cease, as respects those accounts, when the society comes to be under the same duty in respect of the accounts for the next financial year. (4) Every registered branch shall, as from the date by which at the latest its committee of management is required by subsection (2) above to send them to the FCA and, if the society is a PRA-authorised person, the PRA— (a) make copies of the annual accounts and the auditor’s report available free of charge to members of the branch at every office of the branch; and (b) send, free of charge, copies of those documents to any member of the branch who demands them; and that duty shall cease, as respects those accounts, when the branch comes to be under the same duty in respect of the accounts for the next financial year. (4A) A friendly society or registered branch is to be regarded as sending a copy of a document to a member for the purposes of subsection (3)(b) or (4)(b) if it makes the document available to the member on a website; and the end date for the purposes of section 119AB(4)(b) is the date when the duty ceases. (5) If default is made in complying with subsection (1) or (2) above, every person who was a member of the committee of management of the society or, as the case may be, the branch, at any time during the relevant period shall be guilty of an offence and liable on summary conviction— (a) to a fine not exceeding level 5 on the standard scale; and (b) in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level one-tenth of the greater of £5,000 or level 4 on the standard scale for every day during which the offence continues. (6) If, on demand made of it under subsection (3) or (4) above, a friendly society or registered branch fails, in accordance with that subsection, to make available or, as the case may be, within 7 days of the demand, to send to a person a copy of the annual accounts, the society or branch shall be guilty of an offence and liable on summary conviction— (a) to a fine not exceeding level 3 on the standard scale; and (b) in the case of a continuing offence, to an additional fine not exceeding one-tenth of that level for every day during which the offence continues. (7) In subsection (5) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year. (8) The FCA shall keep one of the copies of documents received by it from a friendly society under subsection (1) above in the public file of the society.

78A Interpretation of Part 6

(1) In this Part— “annual accounts”, in relation to a friendly society or registered branch, means— the individual accounts required by section 69A, and any group accounts required by section 69E, together with the notes to those accounts; ... “firm” means any entity, whether or not a legal person, that is not an individual and includes a body corporate, a corporation sole, and a partnership or other unincorporated association; “IAS accounts” means IAS individual accounts or IAS group accounts; ... “income and expenditure account”, in relation to a friendly society or registered branch which prepares IAS accounts, includes an income statement or other equivalent financial statement required to be prepared by UK-adopted international accounting standards; ... “non-directive friendly society” means a registered friendly society — to which subsections (2) and (3) of section 37 (restriction of combinations of business do not apply; and which does not carry on reinsurance business; “parent undertaking” and “subsidiary undertaking” shall be construed in accordance with the provisions of section 1162 of the Companies Act 2006, read in conjunction with section 1161(1) of and Schedule 7 to that Act. “senior statutory auditor” has meaning given by section 74A(1) above; “UK-adopted international accounting standards” has the meaning given by section 474(1) of the Companies Act 2006; (2) References in this Part to accounts giving a “true and fair view” are references— (a) in the case of Friendly Societies Act individual accounts, to the requirement under section 69B that such accounts give a true and fair view; (b) in the case of Friendly Societies Act group accounts, to the requirement under section 69F that such accounts give a true and fair view; and (c) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation. (3) References in this Part to a friendly society subject to special requirements are to a friendly society that ... — (a) would be an insurance undertaking within the meaning given by Article 2.1 of Council Directive 1991/674/EEC on the annual accounts and consolidated accounts of insurance undertakings were the United Kingdom a member State, or (b) is an issuer whose transferable securities are admitted to trading on a regulated market. (4) In subsection (3)— (a) “issuer” and “regulated market” have the same meaning as in Part 6 of the Financial Services and Markets Act 2000; and (b) “transferable securities” means anything which is a transferable security for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments.

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80 Determination of certain disputes by arbitration.

(1) Subject to the following provisions of this section, any dispute between— (a) a member or person claiming through a member or under the rules of a friendly society or registered branch and the society or branch; (b) a person aggrieved who has ceased to be a member of a friendly society or registered branch, or a person claiming through such a person, and the society or branch or an officer of the society or branch; (c) a registered branch and the society of which it is a registered branch; (d) an officer of a registered branch and the society of which it is a registered branch; or (e) two or more registered branches, or any of their officers, shall be determined by arbitration in the manner directed by the rules of the society or branch. (1A) Nothing in subsection (1) above or in rules of a kind mentioned in that subsection prevents any person, in accordance with the scheme for which Part XVI of the Financial Services and Markets Act 2000 provides (the ombudsman scheme), from having a complaint dealt with under such a scheme before, or instead of, arbitration. (2) An application for the enforcement of an award on an arbitration under this section may be made to the county court. (3) An award made in such an arbitration shall, in Scotland— (a) subject to subsection (4) below, be final; and (b) be enforceable as if it were an extract registered decree arbitral bearing a warrant for execution issued by the sheriff. (4) An arbiter who has made an award in an arbitration under this section shall, on the application of a party to such arbitration, state a case for the opinion of the Court of Session on any question of law. (5) If the parties to a dispute of a description specified in subsection (1) above agree that it shall be determined by the county court or, in Scotland, the sheriff, it may be so determined instead of being determined by arbitration under this section. (6) If— (a) a party to a dispute of a description specified in subsection (1) above applies to the society or branch in accordance with the rules for determination of the dispute by arbitration; (b) no such determination has been made within the period of 40 days beginning with the day on which the application was made; and (c) either party applies for determination of the dispute by the county court or, in Scotland, the sheriff, the dispute may be so determined. (7) If the society has registered branches— (a) the period of 40 days shall not begin to run until application has been made in succession to all the bodies entitled to determine the dispute by arbitration in accordance with the rules; but (b) the rules may not require a greater delay than 3 months between each successive determination by such a body. (8) In this section “dispute”— (a) includes any dispute arising on the question whether a member or person aggrieved is entitled to be, or to continue to be, a member or to be reinstated as a member; but (b) in the case of a person who has ceased to be a member does not (except as provided in paragraph (a) above) include any dispute other than one on a question which arose while he was a member, or arises out of his membership; and (c) does not include a dispute between parties mentioned in subsection (1)(a) or (b) above which has arisen as a result of and incidentally to a dispute between a member, or person aggrieved who has ceased to be a member and a person claiming through him or under the rules of a society or branch.

81 Complaints by members of friendly societies.

(1) Nothing in section 80 above shall affect the power of a friendly society or registered branch— (a) to establish internal procedures for the resolution of complaints; or (b) to make, to join with any other persons in making, or to accede to, schemes for the investigation and settlement by an adjudicator of complaints; but a society or branch may not prevent a member from referring any dispute to arbitration under that section by purporting to require instead the making of a complaint or the acceptance of any determination of a complaint. (2) The FCA shall have the function of promoting the establishment by friendly societies and registered branches of— (a) internal complaints procedures; and (b) schemes for the investigation and settlement of complaints; and, in particular, the FCA may issue such guidance on those matters to friendly societies and registered branches as it thinks fit. (3) In this section— “accede”, in relation to a scheme, means assume the obligations and rights of membership of the scheme; “complaint” includes any complaint made by a member about action of a friendly society or branch which constitutes (in relation to that member) unfair treatment, maladministration or breach of any contractual or other duty and causes him pecuniary loss or inconvenience; “member” in relation to a friendly society or branch includes any person who is or was a member of the society or branch or is claiming through a member or under the rules; and “action” includes omissions.

82 Disputes arising out of loans of surplus funds to societies of different description.

(1) Where— (a) a registered friendly society or a registered branch (“the lender”) has made or agreed to make advances under section 50 of the 1974 Act to another society or branch (“the borrower”); and (b) the lender is by reason of this empowered by the rules of the borrower to take part in the government or control of the borrower, subject to subsection (3) below, section 80 above shall apply in relation to the determination of a dispute between the lender and the borrower relating to such an advance or agreement or to the rights of the lender or an officer of the lender under the rules of the borrower, as if the borrower were a branch of the lender. (2) In the application of section 80 above to any such dispute, references in that section to the rules of the society are references to the rules of the borrower. (3) Section 80 above shall not prevent the bringing of legal proceedings for the determination of any such dispute unless, before the commencement of the proceedings, application has been made for a reference under the rules of the borrower. (4) Proceedings for the determination of any such dispute may be brought in England and Wales in the county court or, in Northern Ireland, in a county court or, in Scotland, before the sheriff, whether or not the court would apart from this subsection have jurisdiction to entertain them. (5) The reference in subsection (1) above to advances under section 50 of the 1974 Act includes, in the case of a society formerly registered in Northern Ireland, a reference to advances made under section 42 of the Friendly Societies Act (Northern Ireland) 1970.

83 Disputes relating to industrial and provident societies.

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84 Disputes under the National Savings Bank Act 1971 and National Debt Act 1972.

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85 Amalgamation of friendly societies.

(1) Any two or more friendly societies may, in accordance with this Part of this Act, amalgamate by establishing an incorporated friendly society as their successor. (2) In order to establish a society as their successor, friendly societies proposing to amalgamate must— (a) comply with the applicable requirements of Part I of Schedule 15 to this Act; (b) take the steps required by paragraph 1(2) of Schedule 3 to this Act; (c) each approve the proposed amalgamation and the terms on which it is to take place by special resolution; and (d) obtain the confirmation of the appropriate authority of the amalgamation; and, on obtaining that confirmation, the successor may be registered and incorporated under this Act. (3) If the FCA or the PRA confirms the amalgamation and the successor society is registered under this Act, the certificate of incorporation issued by the FCA shall specify a date as the transfer date for that amalgamation. (4) On the transfer date— (a) all the property, rights and liabilities of each society participating in the amalgamation shall become by virtue of this subsection the property, rights and liabilities of the successor society; and (b) each such society shall be dissolved; but the transfer from each such society effected by paragraph (a) above shall be deemed to have been effected immediately before the dissolution of that society. (4A) If, on the transfer date, each of the societies whose amalgamation was confirmed has permission under Part 4A of the Financial Services and Markets Act 2000, the appropriate regulator (within the meaning of section 55A of that Act) must, with effect from that date, give their successor such permission under that Part as it considers appropriate, subject to such requirements as it considers appropriate, and must notify the successor of the permission by giving the successor a decision notice under that Act. (4B) Part XXVI of the Financial Services and Markets Act 2000 applies to a decision notice given under this section as it applies to a decision notice given under subsection (5) of section 55V of that Act by virtue of paragraph (a) or (b) of that subsection, except that— (a) section 390 (final notices) does not apply, and (b) for the purposes of section 391 (publication) the decision notice is to be treated as if it were a final notice rather than a decision notice. (4C) The giving of permission pursuant to subsection (4A) above is to be treated for the purposes of section 55Z1 of the Financial Services and Markets Act 2000 (right to refer matters to the Upper Tribunal) as if it were the determination of an application made by the successor under Part 4A of that Act, and Part IX of that Act (hearings and appeals) applies accordingly (but subject to subsection (4D) below). (4D) In the application of Part IX of that Act by virtue of subsection (4C) above, section 133A(4) (which prevents the action specified in a decision notice from being taken until after any reference and appeal) is omitted. (5) Where a friendly society is dissolved by subsection (4)(b) above, its registration under this Act or the 1974 Act shall be cancelled by the FCA. (6) Schedule 15 to this Act has effect for supplementing this section.

86 Transfer of engagements by or to friendly society.

(1) A friendly society may, in accordance with this Part of this Act, transfer its engagements to any extent to any of the following persons, that is to say— (a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (b) to an industrial and provident society; (c) to a company registered under the Companies Act 2006; (d) in relation to engagements the fulfilment of which will constitute the carrying on of insurance business, to any other person who is an insurer; (e) in relation to engagements the fulfilment of which will not constitute the carrying on of insurance business, to a person (or body of persons) who is not of a description specified in paragraph (b), (c) or (d) above. (2) A friendly society, in order to transfer any of its engagements, must— (a) comply with the applicable requirements of Part I of Schedule 15 to this Act; (b) resolve to transfer the engagements by special resolution; (c) if the transfer is of some but not all of its engagements, resolve to do so by an affected members’ resolution; (d) record the extent of the transfer as so resolved in an instrument of transfer of engagements; and (e) obtain the confirmation of the appropriate authority of the transfer; and, on obtaining that confirmation, the instrument of transfer of engagements may be registered under subsection (4) below. (3) Where it is proposed to transfer the engagements of one friendly society to another friendly society, the proposed transferee, in order to undertake to fulfil them, must— (a) comply with the applicable requirements of Part I of Schedule 15 to this Act and, if required, with sections 87 and 88 below; and (b) resolve to undertake to fulfil the engagements by special resolution or, if the appropriate authority consents to that mode of proceeding, by resolution of the committee of management. (3A) The PRA must consult the FCA before giving its consent under subsection (3)(b). (4) Where the appropriate authority confirms a transfer of engagements, the FCA shall, on the application of the society proposing to transfer them and the proposed transferee— (a) register a copy of the instrument of transfer of engagements; and (b) issue a registration certificate to the transferee, and a registration certificate shall specify a date as the transfer date for that transfer. (5) On the transfer date— (a) the property, rights and liabilities of the society transferring its engagements shall by virtue of this subsection become, to the extent provided in the instrument of transfer of engagements, the property, rights and liabilities of the transferee; and (b) if the transfer is of all the society’s engagements, the society shall be dissolved; but the transfer shall be deemed to have been effected immediately before any such dissolution. (6) The FCA shall keep a copy of the instrument and of the registration certificate issued under subsection (4) above— (a) where the transferee is a friendly society, in the public file of that society; (b) in any other case, in the public file of the society transferring the engagements. (7) Where a friendly society is dissolved by subsection (5)(b) above, its registration under this Act or the 1974 Act shall be cancelled by the FCA. (8) Where it is proposed that any engagements of a person other than a friendly society should be transferred to a friendly society, the proposed transferee, in order to undertake to fulfil them, must resolve to do so by special resolution. (9) For the purposes of this section— (a) an “affected members’ resolution” is a resolution approving a transfer of engagements which is passed by the appropriate majority of those members whose contracts with the society are included in the transfer and who are entitled to vote on the resolution; and (b) the “appropriate majority” means a majority consisting of not less than three quarters of those who vote on the resolution (in person or by proxy) at a meeting of the society or in a ... ballot; and sub-paragraphs (1)(b) and (c), (4), (5) and (6) of paragraph 7 of Schedule 12 to this Act shall apply to an affected members’ resolution as they apply to a special resolution. (10) Delegate voting may not take place on an affected members’ resolution; and where the rules of a friendly society provide for delegate voting on any matter, they must provide for voting by individual members on such resolutions. (11) Schedule 15 to this Act has effect for supplementing this section. (12) In this section “insurer" means— (a) a person who has permission under Part 4A of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, ... (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) Subsection (12) must be read with— (a) section 22 of the Financial Services and Markets Act 2000; (b) any relevant order under that section; and (c) Schedule 2 to that Act.