The Financial Regulator has published the Registrar of Credit Unions (RCU) newsletter.
A draft Guidance Note on Matters relating to Accounting for Investments and Distribution Policy has been prepared to remind credit unions to ensure that the accounting treatment which they adopt for investments complies with the relevant requirements of the Credit Union Act, 1997 (as amended) and that their distribution policy is appropriate and prudent for the particular circumstances of the credit union. The draft Guidance Note is the subject of consultation with credit union sector stakeholders and it is planned to finalise it during 2009.
On 9 October the Registrar issued a circular to credit unions drawing attention to the provisions of Section 30 of the Credit Union Act 1997 (as amended) which sets out the requirements in relation to "Dividends on Shares". In particular, Section 30(5) of the Act which states that: No dividend on shares shall be paid otherwise than out of:
- Surplus funds in respect of the year in question after the requirements of Section 45 on transfer to Statutory Reserve have been met; or
- A reserve set aside in previous years to provide for dividends.
Credit unions not in a position to pay a dividend out of the surplus arising for the year ended 30 September 2008 in accordance with the provisions referred to at (1) above, were requested to contact the Financial Regulator to discuss the matter prior to finalising their year-end accounts.