ASIC has released Consultation Paper 210 Demutualisation approval procedure rules: Minimum member participation requirement (CP 210) seeking feedback on its approach to considering requests from credit unions to revoke demutualisation approval procedure rules.

Demutualisation approval procedure rules giving ASIC the power of revocation are contained in some credit unions’ constitutions and apply when the credit union is seeking member approval of certain types of transactions that will affect the mutuality of the credit union. However in certain circumstances the rules have proved over-restrictive.

The rules apply in addition to RG 147 requirements and the demutualisation disclosure procedures set out in Part 5 of Schedule 4 of the Corporations Act.

ASIC is considering whether a requirement for 25% of all members of a credit union to vote in a preliminary postal ballot on specified proposals is set at an appropriate level.

ASIC is also considering whether there are any circumstances in which it would be appropriate for ASIC to consider removing or changing the required percentage.