(This note is not part of the Order)

This Order sets out the transitional provisions relating to the expiry, on 2nd July 2002, of the transitional exemption of credit unions from the general prohibition imposed by section 19 of the Financial Services and Markets Act 2000 ("the Act") (see article 6 of the Financial Services and Markets Act 2000 (Exemption) Order 2001 (S.I. 2001/1201)). Article 2 provides that all unauthorised credit unions are to be treated, at 2nd July 2002 ("commencement"), as having permission to accept deposits by way of subscription for their shares. Article 3 enables the Authority to require credit unions of a specified description to reapply for permission. If a credit union which falls within a specified description fails to reapply for permission by the date specified in the direction, its permission ceases to have effect. The Authority may impose such a requirement before commencement but the requirement does not have the effect until commencement. Article 4 sets out procedural provisions that relate to the requirement to reapply for permission.

Article 5 provides that restrictions imposed under section 19 of the Credit Unions Act 1979 have effect from commencement as if they were requirements imposed under section 43 of the Act. Article 5 also makes transitional provisions in relation to the lending powers of credit unions.