Mutuals in the banking sector may be able to raise new capital more readily under amendments to the Corporations Act released yesterday for consultation.The first of two draft bills released by Treasury deals with a legal definition of a mutual company.The proposed new laws are in line with recommendations devised by lawyer and mutual bank director Greg Hammond in his Report on Reforms for Cooperatives, Mutuals and Member-owned Firms released in July 2017.A second draft bill, to be published soon, will clarify the scope of mutual capital instruments and assure that mutual entities maintain their corporate status.Melina Morrison, CEO of the Business Council for Co-operatives and Mutuals said the second bill was expected to follow within a month, and expected to pass Parliament by March 2019.The amendments in the first tranche introduce a definition of a mutual entity "and remove the uncertainty for transferring financial institutions and friendly societies in respect of the demutualisation provisions in Part 5 of the Corporations Act" the explanatory memorandum explains. This new definition of a mutual entity is said to "address the lack of recognition and understanding of the mutual sector [and] also make it simpler to determine when an entity demutualises."Entities affected by these demutualisation provisions have submitted that these provisions in their current form are too broad and give ASIC too broad a discretion which has resulted in uncertainty for the sector in being able to raise capital."Treasury conclude that "together, these amendments will provide the mutual sector with greater certainty and confidence to be able to raise capital without the risk of demutualisation."Morrison said this "corrects a longstanding omission which is the key to opening up a range of new opportunities for mutuals."The current law is not always a barrier to capital raising exercises by a mutual ADI.Warwick Credit Union last year placed A$6 million Additional Tier One capital notes akin to a Basel 3 compliant hybrid capital instruments issued by banks.The capital raising was the first of its type.