Withdrawable Share Capital ("WSC")

At the 2006 Annual General Meeting, members approved the transition of MUST's Phoenix Fund accounts from ordinary deposits to withdrawable share capital ("WSC"), a change that was required by Financial Services Authority (FSA) regulations. While it sounds complex, WSC is pretty easy to understand.

Any money you put into the Phoenix Fund remains in your name. You can withdraw it, and you earn interest on it.

The key wrinkle with WSC is that we as an organisation can decide, where prudent, to invest it for worthy projects. What do we mean by "invest it for worthy projects"? Keep reading below...


Withdrawable share capital (WSC) is a special kind of capital allowed only for Industrial & Provident Societies like MUST. It allows MUST to take deposits from members without being something called 'an authorised person' under the FSA rules. As we mentioned above it’s YOUR money under YOUR ownership.

The main difference between WSC and, say, a current account is that as Share Capital, we can invest our funds in select MUST projects designed to significantly boost the Phoenix Fund.

Now of course we must remain prudent. We envisage that most of the WSC funds will remain in secure deposit accounts. And there are both laws and MUST Rules, approved by members, that forbid us from taking undue risks with the Phoenix Fund. The Board and Committee take this matter very seriously, especially since we have our own money in the Fund as well.

As future projects arise, the Board will consult and inform members, and ask for their approval where possible. But of course if you don't like what's being proposed and would prefer your funds not be committed, you can simply withdraw your funds (hence 'withdrawable' share capital).

Here are some other key details of the new Rules relating to WSC:

One pound (£1) out of the annual membership fee of each new or renewing member goes towards his or her WSC account
Each full member must keep a minimum of £1.00 in that account while a full member
No member can hold more than £20,000 in his or her WSC account (by Law)
Only individual persons can hold WSC, not companies
However much WSC you have in your account, you still only have one vote at AGMs
You can keep your WSC account even if you have not renewed your full membership
Members can increase the size of their WSC account at any time – subject to the maximum limit stated above
Interest is payable annually on your WSC, at the rate which is declared after the end of each year by the Trust Board, subject to a maximum of whichever is the higher of 5% or 2% above the Co-op Bank base rate for the time being WSC is not transferable except upon death of a member

Withdrawals carry a withdrawal administration fee of (currently) £5.00

Members wishing to withdraw all or part of their capital have to give 3 months notice.  This is a change from before, but necessary in order to preserve capital, prevent a ‘run’ and ensure orderly withdrawals. So you should consider your account as a 90-day postal account with a building society, rather than an instant access account. However, the Trust Board has discretion to shorten the notice period and will generally exercise this discretion, for example, in cases of individual need or hardship

Where a member has not renewed for over two years and still has capital in his or her WSC account, the Trust Board has discretion to cancel that member’s shares on giving at least 2 months notice to the member, and if no objection is raised by the member.  In this case, the sums standing to the account of that member can be forfeited to the Trust’s general funds.  This discretion will only be exercised in special circumstances and can be reversed

The Trust Board is limited by law in the investments in which it can invest your WSC. The possible ways in which this can happen are set out in Para. 25 of the new Rules, but does include shares and in the capital of joint ventures, for example

The Trust Board will draw up some more detailed rules on the operation of the WSC accounts so that members have the full picture on all of the above issue

If you have any questions about Withdrawable Share Capital, please open a ticket on our Help Desk (response within 24-48 hours usually), or visit our online forum.