The Association of Financial Mutuals (AFM) has welcomed the Law Commission’s final report on friendly society legislation and called on the government to move quickly to implement its recommendations.

The report follows a two-and-a-half-year review that included a public consultation and engagement with the financial mutual sector.

AFM said the proposed reforms would modernise legislation governing friendly societies and bring requirements more closely into line with company law, helping mutual organisations compete on a more level footing with proprietary companies.

The Law Commission’s final report recommends several changes supported by AFM during the review, including the repeal of the 1974 Act, measures to streamline the process for transfers and an expansion of the business activities available to friendly societies.

AFM also welcomed the report’s support for government reviews of the public interest entity (PIE) audit regime and the mechanisms available to friendly societies for raising capital, although these issues fell outside the scope of the Law Commission’s project.

The trade body urged HM Treasury to respond quickly and make parliamentary time available for the accompanying draft bill.

It said the Law Commission’s engagement with the industry, together with the preparation of draft legislation, meant the reforms could provide the government with an opportunity to introduce changes relatively quickly.

Andrew Whyte, chief executive of AFM, comsaidented: “Friendly society legislation has not been updated for many decades, and it is no longer fit-for-purpose for the modern firm.

“Friendly societies have a unique contribution to make towards Government objectives to improve financial resilience and promote regional growth.

“Speedy implementation of these reforms will be imperative to making good on these ambitions and the ambition to double the size of the mutual and co-operative sector.”