The Building Societies (Financial Assistance) Order 2008

Memorandum and rules

8.—(1) Schedule 2 to the 1986 Act (establishment, incorporation and constitution of building societies) applies in relation to a relevant building society with the following modifications.

(2) Paragraph 2 (the memorandum)(1) shall have effect as if, after sub-paragraph (4), there were inserted—

“(4A) However, no provision of the memorandum of a building society shall be binding on any member or officer of the society, or on any person claiming on account of a member or under the rules, to the extent that it would prevent the society (whether acting through its officers or otherwise) from—

(a) receiving any relevant financial assistance from the Bank of England, or

(b) entering into any transaction connected with the receipt of such financial assistance,

and sub-paragraph (4) shall be construed accordingly.”.

(3) Paragraph 3 (the rules)(2) shall have effect as if, after sub-paragraph (2), there were inserted—

“(2A) However, nothing in the rules of a building society shall be binding on any member or officer of the society, or on any person claiming on account of a member or under the rules, to the extent that it would prevent the society (whether acting through its officers or otherwise) from—

(a) receiving any relevant financial assistance from the Bank of England, or

(b) entering into any transaction connected with the receipt of such financial assistance,

and sub-paragraph (2) shall be construed accordingly.”.

(4) References to the Bank of England in paragraphs 2(4A) and 3(2A) as inserted by paragraphs (2) and (3) above include—

(a) any person acting for or on behalf of the Bank of England, and

(b) any person providing, offering, or entering into an agreement for the provision of, relevant financial assistance to a building society, who does so on the basis of relevant financial assistance that person receives from the Bank of England for that purpose.

(5) No member of a building society may bring proceedings under paragraph 16(2) (capacity of society not limited by its memorandum)(3) to restrain the doing of any act by a building society for or in connection with the receipt of relevant financial assistance from the Bank of England.

(6) Paragraph 16(3) shall not operate so as to—

(a) require the directors to observe any limitations on their powers flowing from the society’s memorandum which would, apart from this article, prevent them entering into any transaction for or in connection with the receipt of relevant financial assistance by the society from the Bank of England, or

(b) require any such action by the directors which, but for paragraph 16(1), would be beyond the society’s capacity, to be ratified by the society by special resolution.

(1)

Paragraph 2(1) and (2) of Schedule 2 were substituted, for paragraphs (1) to (3) as originally enacted, by the Building Societies Act 1997, section 43 and Schedule 7, paragraph 56(3). Paragraph 2(5) was repealed by the Building Societies Act 1997, sections 43 and 46(2), Schedule 7 paragraph 56(4), and Schedule 9.

(2)

Paragraph 3(3) was amended by S.I. 2001/2617. Paragraph 3(4) was amended by the Building Societies Act 1997, section 43 and Schedule 7, paragraph 56(5). Paragraph 3(5) was inserted by S.I. 2003/404.

(3)

Paragraph 16 was substituted by the Building Societies Act 1997, section 3(2) and Schedule 1.