It is proposing firms selling the investments to ordinary retail investors will need to ensure they have read specified risk warnings and committed not to invest more than 5% of their net assets.
This is because it says most investors are unaware of the risks associated with share instruments issued by mutual societies.
These include a lack of liquidity, the fact dividend payments are not guaranteed and that there is a risk of partial or complete loss of capital if the issuer gets into financial difficulty, the regulator said.
FCA director of policy, risk and research Christopher Woolard said: “One of our objectives is to ensure that consumers have the right degree of protection.
“That is why the new rules we are proposing will make sure that there are appropriate safeguards in place so these complex instruments are offered only to investors who are able to make informed decisions about them.”
The FCA is also proposing to make temporary restrictions on sales of contingent convertible instruments – otherwise known as CoCos – permanent.
In August, the regulator announced temporary rules imposing a restriction on the retail distribution of CoCos, which will run for a year from 1 October 2014.
The consultation on the proposed new rules for mutual share societies and CoCos will run until 29 January 2015.