4.6.2 Structure

An open offer is not time limited or linked to a specific investment plan, which means it is not subject to the same information requirements as a time-bound offer. An open offer should normally be restricted to societies that can demonstrate that their share capital is fully withdrawable. Any initial period when withdrawals were suspended should be over, and withdrawal notice periods should be no longer than six months. If there is a restriction on the proportion of total share capital that can be withdrawn it should not be greater than the anticipated inflow of share capital resulting from the open offer. The rules of many societies have set this restriction at 10% of share capital in any one financial year.

If a society has suspended the withdrawal of shares, then an open offer to invest should be restricted to existing members, and the open offer should not be promoted to the general public. This practice can be justified where a society is, or might become, reliant on expensive external sources of capital, and members are willing to provide a cheaper source of capital.

If you have any questions or suggestions for new information you would like to find in the Handbook, contact the team by email at [email protected]