The Building Societies (Non-Retail Funds and Deposits) Order 1990

Amendment of section 7 of the Building Societies Act 1986

3.—(1) This article amends section 7 of the Building Societies Act 1986((1)) (which empowers building societies to raise funds and borrow money) as follows.

(2) In subsection (4)—

(a) paragraph (b) shall be deleted;

(b) the letter “(b)” shall be deleted from paragraphs (c) and (d) where it appears between “(aa)” and “(bb)”

and in subsection (19) the definition of “qualifying time deposit” shall be deleted.

(3) In subsection (4)—

(a) there shall be inserted in paragraph (bb) after the words “excepting circumstances” the words “or in furtherance of a savings scheme”;

(b) there shall be inserted in paragraph (c)(ii) after the figures “1970” the words “otherwise than in furtherance of a savings scheme”.

(4) In subsection (19)—

(a) there shall be inserted between the definitions of “excepting circumstances” and “personal equity plan”, the following definition:

• “intermediary” means—

  (i)

  as regards the interpretation of a savings scheme in connection with paragraph (bb) of subsection (4), an institution which is within the ambit of that paragraph; or

  (ii)

  as regards the interpretation of a savings scheme in connection with subparagraph (ii) of paragraph (c) of subsection (4), a friendly society which is within the ambit of that subparagraph.

  (b)

  there shall be inserted between the definitions of “retirement benefits scheme” and “transferable bearer instrument” the following definition:

  • ““savings scheme” means a scheme under which—

    (a)

    shares in or rights of a depositor with the society represent sums of money placed with an intermediary by an individual under a contract under which—

    (i)

    those sums were to be invested by the intermediary in shares of or deposited with the society, and no other society; and

    (ii)

    those sums were not to be withdrawn from the society by the intermediary except, either—

    (aa)

    on maturity of the contract by reason of the death of the individual, or the effluxion of a period of time specified in the contract, or

    (bb)

    at the written request of the individual or any assignee of that individual’s rights under the contract and within one month of the receipt by the intermediary of such request, or within a maximum of six months of such receipt if under the contract the intermediary has the right to defer for that period the withdrawal of funds placed with the intermediary for investment in or deposit with the society, or

    (cc)

    where the intermediary has the right to deduct an amount from the investment with the society to cover charges specified in the contract and amounts surplus to the requirements of the contract;

    (b)

    the intermediary is obliged to produce, when requested to do so by the society, and on a date nominated by the society,

    (i)

    a statement of the total sums invested or deposited with that society by the intermediary in furtherance of contracts made under the terms of the scheme set out in subparagraphs (i) and (ii) of paragraph (a) above, together with a certificate signed by the auditor of the intermediary confirming that the statement constitutes a true account;

    (ii)

    any written request mentioned in subparagraph (ii) of paragraph (a) above;”

(1)

Section 7 of the Building Societies Act 1986 was amended by S.I. 1987/378 and S.I. 1987/1670.