Before you commit to purchasing shares/Fixed Term Investments please note that The Midcounties Co-operative Limited (‘the Society’) complies with the Code of Best Practice developed by Co-operatives UK with the agreement of HM Treasury.
The Code sets out the minimum standards of good practice that a consumer retail co-operative society should observe in its use of Withdrawable Share Capital. In this context, it is concerned with shares/Fixed Term Investments given these are withdrawable but not transferable.
The Code obliges the Society to provide a statement to its members of the nature of their financial interest in the Society and any change affecting it, as set out below:
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As a member of the Society, you are the owner of one or more shares in the Society. If the Society is unable to meet its debts and other liabilities, you risk losing the amount you hold in shares / Fixed Term Investments in the Society. Hence they are known as risk capital. This may make it inappropriate for you as a place to keep your savings.
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Owning Withdrawable Share Capital (‘WSC’) is not the same as investing in the shares of a company. It is primarily for the purpose of supporting the Society in furthering its purpose and objects. There are various important differences between WSC and company shares. For example, WSC held in shares/Fixed Term investments receives interest but will not increase in value.
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The Financial Services Compensation Scheme, which covers bank, building society and credit union accounts, does not apply to your Share Account/Fixed Term Investments with the Society, so you cannot claim compensation under the Scheme in the event of the Society not being able to meet requests for withdrawal of shares. This is because the Society does not require authorisation under the Financial Services and Markets Act 2000 to operate WSC. Societies are therefore not subject to supervision either by the Prudential Regulation Authority or by the Financial Conduct Authority in relation to WSC.
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You may withdraw money from your Share Account or from your Fixed Term Investments at any time unless the Society’s board of directors has removed this facility under the Society’s rules. Note that interest is not payable on early withdrawal of Fixed Term investments.
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The Financial Ombudsman Service does not apply to your Share Account/Fixed Term Investments or your relationship with the Society but under the Society’s rules any dispute is to be submitted to an arbitrator agreed by the parties or in the absence of agreement to be nominated by the Chief Executive of Co-operatives UK Limited. The arbitrator’s decision will be binding and conclusive on all parties.
If you have any questions regarding the Code please address them to The Secretary, The Midcounties Co-operative Limited, Co-operative House, Warwick Technology Park, Warwick CV34 6DA.