What is Withdrawable Share Capital?

Withdrawable Share Capital is the form of capital used by co-operatives like CI Coop. Unlike a bank deposit, it’s not protected by a deposit protection scheme. It represents your investment in the Coop, giving you certain rights, such as voting, earning interest, and accessing member benefits, but it is not a loan or traditional savings account.

The “withdrawable” part means that members can request to take their money out, subject to the rules of the Coop. This is different from ordinary shares in a company, which usually can’t be redeemed on demand.

How it works at CI Coop:

A Class Shares: Every member has at least one A Class Share. These give you core member rights, including voting, access to member pricing, earning dividends (when declared), and the ability to invest more.

B Class Shares: These are an additional type of share that members can invest in for a return. B Class Shares are also withdrawable, with a specific notice period of 90 days. Interest is earned on these shares, and the terms are set by your Coop to balance member rewards with your coop’s stability and sustainability.

What is the reason for calling the SMMs and why are we holding them now?

Your engagement with us as members helps us shape your Coop, making us future ready. We know many of you are already invested in us and we want to make sure you can engage with us and  in a way that works for you.

The proposed changes are all about giving members more choice t in how they invest with us and reward you for doing so. We also want to recognise those who have  invested with us for many years by offering better rates for long-term investments. Longer-term investments are good for you and for us too, they give us greater stability and certainty, helping us plan for the future.

At the same time, we also want to make sure every member is getting the most out of their investment with us.

By holding these meetings now, we can set the stage for the next steps in our member engagement journey.

Why are you issuing new share classes now?

We are asking members permission to allow us to issue new share class/(es) at the right time in the future. From talking to members we know many of you want more choice in share class types and terms that better fit your personal investment choices.

A positive vote allows us to be able to shape this future offering as we continue to improve our member rewards  and benefits.

This isn’t about raising new member capital, it’s about giving more choice to you as members, supporting your Coop with greater certainty to help plan for the future.

What will the money be used for?

The new share classes aren’t  about raising more member capital. Any investment by members goes straight towards the growth and development of your Coop.

So far, member capital has been used to invest and expand our services, opening new stores, updating stores, introducing new services such as Coop Pharmacy and Coop Mobile, upgrading our technology platforms and supporting our people.

Your support through investment allows us to continue this journey. Will the new share accounts effect the limit I can hold with the Society?

In accordance with society law, and our Member Rules, you can only hold up to a maximum of £100,000 in withdrawable share capital across all share accounts.

Will the higher interest rate paid impact my future dividend?

Your Coop keeps a close eye on  the rates of interest it applies to its share classes, to make sure that members are fairly rewarded while supporting the growth of your Coop.

When new share classes are introduced, we will review the interest rates across all share classes to ensure that they are fair, recognising both the value and duration of your commitment in us.

The amount of any dividend paid depends on  several factors, like the overall performance of the business and operating costs  with interest payable on member capital being one part of the equation.

Are the funds invested with CI Coop covered by the depositor protection scheme?

It is important to note that funds invested with your Coop are not protected by any depositor protection scheme in Jersey or Guernsey. Your Coop is not a bank, rather a retail co-operative society that raises capital through withdrawable share capital. Members can purchase withdrawable share capital in accordance with the terms of our Member Rules.

Withdrawable share capital is common among co-operatives across the UK, not just in the Channel Islands and across all societies.

While issuing withdrawable share capital is an exempt transaction under the Banking Business (General Provisions) (Jersey) Order, 2002, CI Coop still meets specific liquidity requirements, which are reported quarterly to the Jersey Financial Services Commission and assessed annually by our auditor.

Why are you changing how interest is paid on the B class share account?

When the B class was first launched members did not earn interest during the 90-day withdrawal notice period. We’ve reviewed this and feel its only fair that members earn interest during this time too.  

To allow us to do this we need members to approve an update to the rules.

Why are the dormancy provisions being changed?

When joining the society every member receives an initial A share class share, which gives you rights like  voting in Board elections,  access to member pricing,  earning  dividends on qualifying purchases (subject to dividend being declared and approved) and to invest more with us and receive a return on that.

It is not possible to be a member without an A class share.

We’ve update  the dormancy provisions so that it is only those who are A share class holders and who have not been active on their share account in terms of purchase history for a period of time that are considered under these provisions.

We know that circumstances change for our members and we will always endeavour to contact members  as much as we can prior to closing share accounts.

If accounts are closed under these provisions, a member can always contact us in the future and we would assist them in re-opening the accounts subject to completion of our standard processes.

Why does it matter what the legal form of any charitable, social or non-profit organisation is?

Supporting our charities is a key part of our values. We know our charitable partners take many legal forms so all we are doing is amending the wording so that this is clear that there is no restriction on what forms of charitable partner could be a member.

We know that for many charities the ability of members and customers to support them through their share accounts is important.

If the motions get carried, when is the Society looking to make these changes?

Our intention is to make these changes by the end of this financial year to support our member initiatives through 2026.