The Community Shares Unit provides good practice guidance and promotes high standards of voluntary regulation among societies issuing community shares. It does this through the publication of this Handbook, an activity overseen by a technical committee, originally established by the FCA, and that now includes representation from HM Treasury, the Charity Commission, HMRC and the Department for Communities and Local Government.
In order to further promote good practice the Community Shares Unit has introduced a Standard Mark for share offer documents that comply with the guidance contained in this Handbook. The Mark is awarded by licensed practitioners to the offer documents of societies that are assessed to be compliant with established criteria of good practice.
In developing these arrangements, the Community Shares Unit is mindful of the following underlying principles of voluntary regulation:
- Proportionate and low cost: The demands placed on a society making a community share offer should be proportionate to the scale of the offer, and not be overly burdensome. Small offers of less than £50,000 are not expected to engage with the Compliance Mark. The cost of compliance should be kept as low as possible, and be proportionate with the amount of capital to be raised.
- Simple: Community share offers are targeted at local communities, mostly made up of unsophisticated investors who are unlikely ever to have directly purchased shares before, or to have used the services of an independent financial adviser. All documentation aimed at the general public should be simple, accessible and comprehensible without expert advice.
- Open: Societies should be fully transparent about all aspects of their business and share commercial data with other societies operating in the same sector in order to learn from one another. The sharing of business data and market intelligence should underpin the open appraisal of offer documents.
- Practical and developmental: Guidance should be easy to understand and to implement. It should be based on evidence of what works for other societies and communities. The guidance should enable societies to become more resilient and sustainable as enterprises.
- Practitioner support: Responsibility for community share offers rests with the management committee of the society making the offer, supported by practitioners who have been assessed as competent. Practitioners should be encouraged to develop their competencies in supporting community share offers.
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]