7.6.2 The Community Shares Standard Mark
The purpose of the Community Shares Standard Mark is to create and maintain public confidence in community share offers, by ensuring a consistent approach to standards by all participating societies and practitioners. The Mark is awarded to share offers that comply with the guidance in the Community Shares Handbook and satisfy the assessment criteria for the Mark. These criteria address the offer document, application forms, rules and business plan of a society, where relevant. The assessment is carried out by a licensed practitioner, using an assessment template devised and maintained by the Community Shares Unit.
From a consumer protection perspective, the aim of the Standard Mark is to ensure that community share offers meet the following standard:
- The offer document and application form are easy to understand.
- Consumers are provided with all the facts they need to make an informed decision.
- The facts are supported by the annual accounts and/or business plan for the society.
- Nothing in these documents is purposefully incorrect, confusing or misleading.
Societies are asked to sign a Code of Practice requiring them, among other things, to give the public a right of complaint to the Community Shares Unit. The Community Shares Unit will remove the Mark from offers where the society is shown not to be complying with the Code of Practice.
Community Shares Standard Mark assessments are conducted by independent licenced practitioners, who are licenced by the Community Shares Unit to award the Mark. The Community Shares Unit website includes a directory of licenced practitioners, and societies can commission a licenced practitioner of their choosing, as long as that licenced practitioner has no conflict of interest with the society, such as being a board director, or having been involved in writing the share offer document or business plan.
The Mark is not a guarantee that the business will be a success. Nor is it intended to be a form of due diligence or investment advice. Consumers should still be warned that they could lose some or all of the money they invest, and that they have no rights to statutory compensation or complaint.
The Mark is the property of the Community Shares Unit, which is responsible for licensing practitioners and monitoring their assessments. There is a code of conduct for community share offers carrying the Standard Mark that includes a public right of complaint overseen by the Community Shares Unit. The code of conduct sets standards for the promotion and administration of community share offers by societies. The Community Shares Unit has the ultimate sanction of removing the Mark from a society’s offer document, and cancelling a practitioner’s licence.
The Community Shares Standard Mark is promoted to the public in the publication, Investing in Community Shares, which participating societies are encouraged to list on their websites and refer to in their offer documents. The Money Advice Service website has a section devoted to community shares, which includes a description of the Community Shares Standard Mark.
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]