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Building Societies Act 1986

1986 CHAPTER 53

An Act to make fresh provision with respect to building societies and further provision with respect to conveyancing services.

[25th July 1986]

Be it enacted by the Queen’s most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—

Modifications etc. (not altering text)

C1Act modified (temp.) by S.I. 1986/2168, art. 3(1)(2)(a)(b)

C3Act applied (with modifications) and modified by S.I. 1988/1394, arts. 2, 7, Schs. 1, 2

Act applied (N.I.) (1.10.1991) by S.I. 1989/2404, art. 12, Sch. 1 Pt. I para. 6; S.R. 1991/410, art. 1(2)

Act applied (N.I.) (1.10.1991) by S.I. 1990/1504, art. 111; S.R. 1991/438, art. 2(d)

Act applied (with modifications) (1.7.1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

C4Act: definition applied (N.I.) (1.6.1992) by Northern Ireland (Emergency Provisions) Act 1991 (c. 24, SIF 39:1), ss. 55, 69(1)(2), Sch. 4 para. 7(4); S.I. 1992/1181, art. 2 (which 1991 Act was repealed (25.8.1996) by 1996 c. 22, ss. 59, 62(1), 63(3)(7), Sch. 7 Pt. I)

C6Power to amend Act conferred (N.I.) (27.3.2006) by The Insolvency (Northern Ireland) Order 2005 (S.I. 2005/1455), arts. 1(3), 4(b); S.R. 2006/21, art. 2 (subject to S.R. 2006/22, arts. 2-7)

C7Power to modify Act conferred (21.2.2008) by Banking (Special Provisions) Act 2008 (c. 2), s. 11

C8Power to amend Act conferred (17.2.2009 for specified purposes, 21.2.2009 in so far as not already in force) by Banking Act 2009 (c. 1), ss. 158(2)(a), 251, 263(1) (with s. 247); S.I. 2009/296, arts. 2, 3, Sch. para. 3

C9Power to amend Act conferred (24.1.2013) by Financial Services Act 2012 (c. 21), ss. 50(2)(h), 122(3) (with Sch. 20); S.I. 2013/113, art. 2(1)(a), Sch. Pt. 1

[F1PART I]U.K. FUNCTIONS OF THE [F2Financial Conduct Authority and the Prudential Regulation Authority]

Textual Amendments

F1Pt. I (s. 1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for Pt. I (ss. 1-4) by S.I. 2001/2617, arts. 2, 13(1), Sch. 3 Pt. II, para. 132 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

[F31 Functions of the [F4Financial Conduct Authority and the Prudential Regulation Authority] in relation to building societies.U.K.

(1)[F5The FCA] has the following functions under this Act in relation to building socities—

F6(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)to administer the system of regulation of building societies provided for by or under this Act; and

(c)to advise and make recommendations to the Treasury and other government departments on any matter relating to building societies.

[F7(1A)The PRA has the following functions under this Act in relation to building societies—

(a)to secure that the principal purpose of building societies remains that of making loans which are secured on residential property and are funded substantially by their members;

(b)to administer the system of regulation of building societies provided by or under this Act, but only in so far as sections 5, 6, 7 [F8and 9A ] confer functions on the PRA; and

(c)to advise and make recommendations to the Treasury and other government departments on any matter relating to building societies.]

(2)The [F9FCA and the PRA also have] , in relation to such societies, the other functions conferred on [F10them respectively] by or under this Act or any other enactment.]

Textual Amendments

F3Pt. I (s. 1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for Pt. I (ss. 1-4) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 132 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IIU.K. Constitution of Building Societies

EstablishmentU.K.

5 Establishment, constitution and powers.U.K.

[F12(1)A society may be established under this Act if (and only if) it complies with the following requirements, namely—

(a)its purpose or principal purpose is that of making loans which are secured on residential property and are funded substantially by its members; and

(b)its principal office is in the United Kingdom.]

(2)A society is established under this Act on compliance by the persons establishing it with the scheduled requirements and is incorporated under this Act as from the date of registration by the [F13FCA] .

(3)A society incorporated under this Act is referred to in this Act as a “building society”.

(4)A society incorporated under the repealed enactments whose principal office, as registered with the central office immediately before the commencement of this section, was in the United Kingdom, shall be deemed to be registered (and accordingly as incorporated) under this Act.

[F14(4A)If, after its establishment, a building society fails to comply with the requirements imposed by subsection (1)(a) or (b) above—

(a)the powers conferred on the [F15appropriate authority] by section 36 or 37 shall become exercisable in relation to the society; but

(b)the failure shall not affect the validity of any transaction or other act.]

[F16(5)Subject to the provisions of this Act, a building society shall have the powers conferred on it by its memorandum.]

(8)Schedule 2 to this Act has effect as respects the constitution, powers, and regulation of building societies and in that Schedule—

(a)Part I makes provision with respect to the constitution, memorandum, rules and certain incidents of membership;

[F17(b)Part II makes provision with respect to the capacity of a society and the powers of its directors to bind it; and]

(c)Part III makes provision with respect to meetings, postal ballots and resolutions;

[F18and in this section “scheduled”, with reference to requirements for establishment, means contained in that Schedule]

(9)Any obligation imposed by this Act or the rules of a building society to give or send notices or other documents to members is subject to paragraph 14 of that Schedule.

[F19(10)In this Act “residential property” means land at least 40 per cent of which—

(a)is normally used as, or in connection with, one or more dwellings; or

(b)has been, is being or is to be developed or adapted for such use;

and for the purposes of this subsection, the area of any land which comprises a building or other structure containing two or more storeys shall be taken to be the aggregate of the floor areas of each of those storeys.]

Textual Amendments

F12S. 5(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)-(5) of S.I. 1997/2668) by 1997 c. 32, ss. 1(1), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(a)

F14S. 5(4A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)-(5) of S.I. 1997/2668) by 1997 c. 32, ss. 1(2), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(a)

F16S. 5(5) substituted for s. 5(5)-(7) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)-(5) of S.I. 1997/2668) by 1997 c. 32, ss. 1(3), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(a)

F17S. 5(8)(b) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(1)(a), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(c)

F18Words in s. 5(8) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(1)(b), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(c)

F19S. 5(10) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)-(5) of S.I. 1997/2668) by 1997 c. 32, ss. 1(4), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(a)

Modifications etc. (not altering text)

C12S. 5(8)(c) excluded (temp.) by S.I. 1986/2168, art. 3(1)(2)

F20 [Making loans]U.K.

Textual Amendments

F20S. 6 and cross-heading substituted for s. 6 (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 4, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(d)

6F21[The lending limit.]U.K.

(1)A building society shall secure that the difference between—

(a)the value of X on any quarter day; and

(b)the value of Y on that day or the value of Y on the immediately preceding quarter day, whichever is the greater,

does not exceed 25 per cent of that value of X.

(2)For the purposes of subsection (1) above—

X = the difference between the total assets of the society and any subsidiary undertakings of the society as shown in the society’s accounts and the aggregate of—

(a)the liquid assets of the society and any such undertakings as shown in those accounts F22...;

(b)the fixed assets of the society and any such undertakings as so shown; and

(c)where any such undertakings are [F23effecting or carrying out contracts of insurance], such of their assets as shown in those accounts as represent long term insurance funds; and

Y = the principal of, and interest accrued on, loans which are owed to the society or any subsidiary undertaking of the society and are fully secured on residential property;

and for the purposes of this subsection the total assets of a society and any subsidiary undertakings of the society shall be taken to be increased by the amount of any provision made for bad or doubtful debts of the society or any such undertaking.

(3)Any loans owed to the society or any subsidiary undertaking of the society shall be disregarded for the purposes of the definition of “Y” in subsection (2) above to the extent that they are not included in the total assets of the society and any such undertakings as shown in the society’s accounts.

(4)Any reference in subsection (2) or (3) above to anything being shown in a society’s accounts shall be construed—

(a)in relation to a quarter day on which a financial year of the society ends, as a reference to its being shown in the accounts prepared by the society for that year;

(b)in relation to any other quarter day, as a reference to its being shown in the accounts which would have been prepared by the society for the year ending on that day if that year were a financial year of the society.

(5)If a building society fails to comply with the requirement imposed by subsection (1) above—

(a)the powers conferred on the [F24appropriate authority] by section 36 shall become exercisable in relation to the society; but

(b)the failure shall not affect the validity of any transaction or other act.

(6)The Treasury may by order substitute for the percentage specified in subsection (1) above such greater percentage (not greater than 40 per cent) as appears to them to be appropriate; and an order under this subsection may make such supplementary, transitional and saving provision as appears to the Treasury to be necessary or expedient.

(7)The [F25Treasury may], by order—

(a)modify subsections (2) and (3) above in their application to assets of subsidiary undertakings;

(b)apply those subsections to corresponding assets of associated undertakings; or

(c)modify those subsections in their application to such assets.

(8)An order under subsection (7) above may make—

(a)different provision for different circumstances;

(b)provision for particular assets of undertakings to be disregarded; and

(c)such supplementary, transitional and saving provision as appears to the [F26Treasury] to be necessary or expedient.

(9)The power to make an order under subsection (6) or (7) above is exercisable by statutory instrument.

(10)No order shall be made under subsection (6) above unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.

(11)A statutory instrument containing an order under subsection (7) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

[F27(12)In this section “long term insurance funds", in relation to an undertaking effecting or carrying out contracts of insurance, means funds maintained by it—

[F28(a)in respect of its business in effecting or carrying out contracts of long term insurance in accordance with rules made by—

(i)the FCA under section 137A of the Financial Services and Markets Act 2000, or

(ii)the PRA under section 137G of that Act,

which require an authorised person who has permission to effect or carry out contracts of insurance to identify assets which belong to that person and which are maintained in respect of a particular aspect of that person’s business; or]

(b)where it is incorporated in a country or territory outside the United Kingdom, under the corresponding provisions of the law of that country or territory.]

F29[(12A)The definition of X in subsection (2) and subsection (12) must be read with—

(a)section 22 of the Financial Services and Markets Act 2000;

(b)any relevant order under that section; and

(c)Schedule 2 to that Act.]

(13)Where a loan is owed to a lending syndicate of which a building society or connected undertaking of a building society is a member, so much of the loan as is referable to the society’s or undertaking’s participation in the syndicate shall be treated for the purposes of this section and sections 6A and 6B as a loan owed to the society or undertaking.

(14)In this section and section 7—

and references to any value on a quarter day are references to that value at the close of business on that day.

(15)If an agreement between the [F31appropriate authority] and a building society so provides, the definition of “quarter day” in subsection (14) above shall have effect in relation to the society as if for any reference to a number of months there were substituted a reference to a number of days specified in the agreement.

[F32(16)In this section, in the case of societies which produce IAS individual accounts or IAS group accounts;

Textual Amendments

F21S. 6 and cross-heading substituted for s. 6 (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 4, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(d)

F22Words in s. 6(2) omitted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 2(2)

F23S. 6(2): Words in para. (c) of the definition of “X" substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 194(2)

F25Words in s. 6(7) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 134(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F26Word in s. 6(8)(c) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para 134(c) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F27S. 6(12) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 194(3)

F29S. 6(12A) inserted (1.12.2001) by S.I. 2001/3649, arts. 1, 194(4)

F30Words in s. 6(14) omitted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 2(3)

F32S. 6(16) inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 2(4)

Modifications etc. (not altering text)

C15S. 6(7)(8): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(a)

[F336A Loans secured on land.U.K.

(1)For the purposes of this Act a loan is secured on land if it is secured by—

(a)a mortgage of a legal estate in land in England and Wales or Northern Ireland;

(b)a heritable security over land in Scotland; or

(c)a qualifying security over land in an EEA country or territory other than the United Kingdom.

(2)For the purposes of this Act a loan is also secured on land if—

(a)it is secured by a mortgage of an equitable interest in land in England and Wales or Northern Ireland;

(b)the equitable interest is an equitable interest in land of a description, and is created in circumstances, prescribed in an order made by the F34. . . Treasury; and

(c)any conditions prescribed in the order are complied with;

and an order under this subsection may apply in relation to securities held by or on behalf of building societies or connected undertakings of a description specified in the order, or securities held by or on behalf of all such societies or undertakings other than those of a description so specified.

(3)For the purposes of this Act—

(a)a loan shall be treated as secured by a mortgage of a legal estate in registered land in England and Wales or Northern Ireland notwithstanding that the loan is made before the mortgagor is registered as proprietor of the estate; and

(b)a loan shall be treated as secured by a heritable security over land in Scotland notwithstanding that the loan is made before title to that land has been transferred to the debtor in the heritable security.

(4)The [F35Treasury may], by order provide for any provisions of this Act to have effect in relation to loans secured on land outside the European Economic Area with such modifications as appear to [F36them] to be appropriate.

(5)An order under subsection (2) or (4) above may make such incidental, supplementary and transitional provision as appears to the [F37Treasury] to be necessary or expedient.

(6)The power to make an order under subsection (2) or (4) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7)In this section and section 6B—

(8)In this Act “land”, in the expression “loan secured on land”, means—

(a)land in an EEA country or territory; and

(b)in so far as land in any other country or territory is, under any provision of this Act, land on which loans may be secured, land in that other country or territory.]

Textual Amendments

F33S. 6A inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 5, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(e)

F34Words in s. 6A(2)(b) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5 and with saving in S.I. 2001/2967, arts. 1(2), 9(1)(c)); S.I. 2001/3538, art. 2(1)

F35Words in s. 6A(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 135(b)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F36Word in s. 6(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 135(b)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F37Word in s. 6(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 135(c) (with art. 13(3), Sch. 5; S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C16S. 6A(2)(b)(4)(5): Functions of Building Societies Commission transferred (1.12.2001) by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(a)

[F386B Loans fully secured on land.U.K.

(1)For the purposes of this Act a loan which is owed to a building society or a subsidiary undertaking of a building society and is secured on residential property or other land is fully secured on the land if—

(a)the principal of, and interest accrued on, the loan does not exceed the value of the requisite security; and

(b)no, or no more than one, mortgage of the land which has priority over the society’s or undertaking’s mortgage is outstanding in favour of an outside person.

(2)Where a mortgage of the residential property or other land which has priority over the society’s or undertaking’s mortgage is outstanding, the principal of the loan secured or, in the case of a loan by instalments, intended to be secured by that mortgage shall be deducted from the value of the requisite security for the purposes of subsection (1)(a) above.

(3)Where the loan is secured on residential property or other land in the United Kingdom, any outstanding charge over the land which—

(a)in the case of land in England and Wales, is registered in the appropriate local land charges register;

(b)in the case of land in Scotland, is recorded in the Register of Sasines, or registered in the Land Register, under section 108 of the M1Civic Government (Scotland) Act 1982 or Schedule 9 to the M2Housing (Scotland) Act 1987;

(c)in the case of land in Northern Ireland, is registered in the statutory charges register under section 87 of, and Schedule 11 to, the M3Land Registration Act (Northern Ireland) 1970,

shall be disregarded for the purposes of subsections (1)(b) and (2) above.

(4)Where, on the occasion on which a building society or a subsidiary undertaking of a building society makes or acquires a loan which is secured on land, the society or undertaking is satisfied that the loan is—

(a)a loan which is fully secured on residential property;

(b)a loan which is not so secured but is fully secured on land; or

(c)a loan which is not fully secured on land,

the loan shall be treated as such a loan for the purposes of this Act until such time (if any) as subsection (7) below applies.

(5)Subsection (4) above shall have effect in relation to a loan which the society or undertaking makes by two or more payments on different dates as if—

(a)the reference to the occasion on which the society or undertaking makes the loan were a reference to the occasion on which it makes the first of the payments;

(b)other references to the loan were references to it in its intended maximum amount; and

(c)the value of any security for the loan were its expected maximum value.

(6)Where a building society or a subsidiary undertaking of a building society makes or acquires a loan which is secured on land, the society or undertaking shall be deemed to be satisfied as mentioned in paragraph (c) of subsection (4) above until such time (if any) as it is satisfied as mentioned in paragraph (a) or (b) of that subsection.

(7)Where at any time, in the case of a loan treated as falling within paragraph (a), (b) or (c) of subsection (4) above, the society or undertaking—

(a)is satisfied—

(i)on a revaluation that the value of the requisite security has changed;

(ii)on notice given to it by the borrower that there has been a change in the use of the land;

(iii)that so much of the mortgage debt as represents the principal of the loan has changed;

(iv)that the principal of the loan secured by a prior mortgage has changed or has been repaid; or

(v)that the relative priority of the mortgage of the land on which the loan is secured has changed;

(b)is also satisfied that the change or repayment is such that, if it were to make a loan equal to the mortgage debt at that time, the loan would instead be a loan falling within another of those paragraphs; and

(c)in a case falling within paragraph (a)(i) above, elects that this subsection shall apply,

the loan shall be treated as such a loan for the purposes of this Act until such time (if any) as this subsection again applies.

(8)In this section—

(9)In the application of subsections (1), (2) and (7) above to residential property or other land in Scotland or an EEA country or territory other than the United Kingdom, references to a mortgage of the land shall be construed as references to a heritable or, as the case may require, qualifying security over the land.]

Textual Amendments

F38S. 6B inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 6, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(f)

Modifications etc. (not altering text)

C17S. 6B(4)(a) modified (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 46(1), 47(3), Sch. 8 para. 6(1)(a)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(y)(aa)(iii)

C18S. 6B(4)(b) modified (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 46(1), 47(3), Sch. 8 para. 6(1)(c); S.I. 1997/2668, art. 2, Sch. Pt. II(y)(aa)(iii)

C19S. 6B(4)(c) modified (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 46(1), 47(3), Sch. 8 para. 6(1)(d); S.I. 1997/2668, art. 2, Sch. Pt. II(y)(aa)(iii)

Marginal Citations

[F396C Discharge of mortgages.U.K.

Schedule 2A to this Act, which contains supplementary provisions as to the discharge of mortgages, shall have effect.]

Textual Amendments

F39S. 6C inserted (1.12.1997) by 1997 c. 32, s. 7(1); S.I. 1997/2668, art. 2, Sch. Pt. I(a)

Raising funds and borrowingU.K.

[F407 The funding limit.U.K.

(1)A building society shall secure that the difference between—

(a)the value of X on any quarter day; and

(b)the value of Y on that day or the value of Y on the immediately preceding quarter day, whichever is the greater,

does not exceed 50 per cent of that value of X.

(2)For the purposes of subsection (1) above—

X = the aggregate of the following, namely—

(a)the principal value of, and interest accrued on, shares in the society;

(b)the principal of, and interest accrued on, sums deposited with the society or any subsidiary undertaking of the society; and

(c)the principal value of, and interest accrued under, bills of exchange, instruments or agreements creating or acknowledging indebtedness and accepted, made, issued or entered into by the society or any such undertaking; and

Y = the principal value of, and interest accrued on, shares in the society held by individuals otherwise than as bare trustees (or, in Scotland, simple trustees) for bodies corporate or for persons who include bodies corporate.

(3)The following shall be disregarded for the purposes of subsection (2) above, namely—

(a)any sums or amounts which are own funds; F41...

[F42(aa)subject to subsection (3A), the principal of, and interest accrued on, sums deposited with the society or any subsidiary undertaking of the society by a small business (see subsection (10));]

(b)to the extent that they are not included in the total liabilities of the society and any subsidiary undertakings of the society as shown in the society’s accounts—

(i)any sums deposited with the society or any such undertaking; and

(ii)any indebtedness created or acknowledged by bills of exchange, instruments or agreements accepted, made, issued or entered into by the society or any such undertaking.

[F43(3A)In respect of any day by reference to which the value of X falls to be calculated for the purposes of subsection (1) in relation to the society, the total amount to be disregarded under subsection (3)(aa) may not exceed 10% of the amount that would, in the absence of subsection (3)(aa), be the value of X on that day.]

(4)The reference in subsection (3) above to anything being shown in a society’s accounts shall be construed—

(a)in relation to a quarter day on which a financial year of the society ends, as a reference to its being shown in the accounts prepared by the society for that year;

(b)in relation to any other quarter day, as a reference to its being shown in the accounts which would have been prepared by the society for the year ending on that day if that year were a financial year of the society.

(5)If a building society fails to comply with the requirement imposed by subsection (1) above—

(a)the powers conferred on the [F44appropriate authority] by section 36 shall become exercisable in relation to the society; but

(b)the failure shall not affect the validity of any transaction or other act.

(6)Where an individual declares that he is acquiring any shares in a building society otherwise than as a bare trustee (or, in Scotland, a simple trustee) for a body corporate, or for persons who include a body corporate, he shall, unless the contrary is shown, be conclusively presumed for the purposes of this section to hold the shares otherwise than as such a trustee.

[F45(6ZA)Where a person declares that the person is a small business, the person shall, unless the contrary is shown, be conclusively presumed for the purposes of this section to be a small business.]

(7)The [F46Treasury may], by order—

(a)modify subsections (2) and (3) above in their application to liabilities of subsidiary undertakings;

(b)apply those subsections to corresponding liabilities of associated undertakings; or

(c)modify those subsections in their application to such liabilities.

(8)An order under subsection (7) above may make—

(a)different provision for different circumstances;

(b)provision for particular liabilities of undertakings to be disregarded; and

(c)such supplementary, transitional and saving provision as appears to the [F47Treasury] to be necessary or expedient.

(9)The power to make an order under subsection (7) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

[F48(10)In this section “small business” means any person (other than an individual acting as a sole trader) carrying on a business which had a turnover in the relevant financial year of less than £1,000,000.

(11)For the purposes of subsection (10)—

(a)the “relevant financial year”, in relation to any day by reference to which the value of X falls to be calculated for the purposes of subsection (1) in relation to a building society, means the last financial year ending before that day;

(b)“turnover”, in relation to a small business, means the amount derived from the provision of goods and services falling within the business's ordinary activities, after deduction of trade discounts, value added tax and any other taxes based on the amounts so derived;

(c)in respect of any relevant financial year, the reference to £1,000,000 includes the equivalent amount in any other currency, calculated as at the last day of that year.

(12)The Treasury may, by order made by statutory instrument, amend the figure for the time being specified in subsections (10) and (11)(c).

(13)A statutory instrument containing an order under subsection (12) is subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F40S. 7 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 8, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(g)

F41Word in s. 7(3)(a) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 2(2)

F46Words in s. 7(7) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. I para. 136(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F47Word in s. 7(8)(c) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 136(c) (with art. 13(3), Sch. 4); S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C25S. 7(7)(8): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, art. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(a)

[F498 Raising funds and borrowing.U.K.

(1)Subject to subsection (2) below, a building society shall not do any of the following things, namely—

(a)accept a deposit from an individual;

(b)raise funds from an individual otherwise than by the issue of shares; and

(c)raise funds from a body corporate, or from a bare trustee (or, in Scotland, a simple trustee) for a body corporate or for persons who include a body corporate, otherwise than by the issue of deferred shares.

(2)Nothing in subsection (1)(a) above shall apply in relation to—

(a)the maintenance on behalf of an individual of a current account, or a deposit account which contains in its title the word “client” or the word “trust” or “trustee”;

(b)the issue to an individual of a transferable instrument;

(c)the acceptance from an individual of a qualifying time deposit or an overseas deposit; or

(d)in the case of a building society which has announced publicly that it intends, in accordance with section 97 and the other applicable provisions of this Act, to transfer the whole of its business to a company, anything done by the society during the period of two years beginning with the date of the announcement.

(3)The [F50appropriate authority] may, if it thinks fit, extend or further extend the period mentioned in subsection (2)(d) above if written application is made to it before the expiry of that period or that period as extended; and a direction under this subsection—

(a)shall be in writing;

(b)may be given subject to such limitations or conditions as the [F50appropriate authority] may think fit.

(4)A contravention of subsection (1) above shall not invalidate any transaction or other act.

(5)The power of a building society to raise funds by the issue of shares is a power—

(a)to issue shares of one or more denominations, whether in sterling or another currency; and

(b)to issue them either as shares paid up in full or as shares to be paid by periodical or other payments, and (in either case) with accumulating or other interest;

and funds so raised may be repaid when they are no longer required for the purposes of the society.

(6)In the case of deferred shares, the power of a building society to raise funds by the issue of shares includes the issue of shares at a premium.

(7)If a building society issues deferred shares at a premium, whether for cash or otherwise, a sum equal to the aggregate amount or value of the premiums on those shares shall be transferred to the society’s reserves.

(8)For the purposes of this section the acceptance of deposits (including the issue of debt securities) shall not constitute the raising of funds.

(9)In this section, in relation to a building society—

(10)A right is transferable for the purposes of the definition of “transferable instrument” in subsection (9) above if it is transferable by delivery of the instrument, or it is a right—

(a)which may, under the terms of the instrument, be held by any person, or by any person other than a person of a description specified in the instrument;

(b)express provision for the transfer of which is included in the instrument; and

(c)the transfer of which, under the terms of the instrument, does not require the consent of any person.

(11)Where an individual declares that he is acquiring any shares in a building society otherwise than as a bare trustee (or, in Scotland, a simple trustee) for a body corporate, or for persons who include a body corporate, he shall, unless the contrary is shown, be conclusively presumed for the purposes of this section to hold the shares otherwise than as such a trustee.

(12)The [F52Treasury may] by order vary subsections (2), (9) and (10) above by adding to or deleting from them any provision or by varying any provision contained in them; and an order under this subsection may make such supplementary, transitional and saving provision as appears to the [F52Treasury] to be necessary or expedient.

(13)The power to make an order under subsection (12) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F49S. 8 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 9, 47(3) (with s. 46(1), Sch. 8 para. 9); S.I. 1997/2668, art. 2, Sch. Pt. II(h)

F51Words in s. 8(9) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 273 (with Sch. 2)

F52Words in s. 8(12) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 137(b)(i)(ii), (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C28S. 8(12): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 1(2)(b), 4(1),Sch. 1 Pt. III; S.I. 2001/3538, art. 2(a)

F539. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F54[Restrictions on powers]U.K.

Textual Amendments

F54S. 9A and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 10, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(i)

[F559ARestrictions on certain transactions.U.K.

(1)Subject to subsections (2) to (4) below, a building society shall not do, and shall secure that each of its subsidiary undertakings does not do, any of the following things, namely—

(a)act as a market maker in securities, commodities or currencies;

(b)trade in commodities or currencies; and

(c)enter into any transaction involving derivative investments;

but a contravention of this subsection shall not invalidate any transaction or other act.

(2)No transaction entered into by a building society, or a subsidiary undertaking of a building society, shall be taken into account for the purposes of subsection (1)(a) above if—

(a)it relates only to securities or currencies or both and the amount or value of the consideration given by the society or undertaking does not exceed £100,000; or

(b)it is entered into in the society’s or undertaking’s capacity as the manager of a collective investment scheme.

(3)No transaction so entered into shall be taken into account for the purposes of subsection (1)(b) above if—

(a)it relates only to currencies and the amount or value of the consideration given by the society or undertaking does not exceed £100,000; or

(b)it is ancillary or incidental to another transaction entered into by the society or undertaking.

(4)Nothing in subsection (1)(c) above shall apply in relation to any transaction entered into by a building society, or a subsidiary undertaking of a building society, if—

(a)it is entered into in the society’s or undertaking’s capacity as the manager of a collective investment scheme;

(b)it is entered into for the purpose of limiting the extent to which the society, or a connected undertaking of the society, will be affected by changes in any of the following factors, namely—

(i)interest rates;

(ii)exchange rates;

(iii)any index of retail prices;

(iv)any index of residential property prices; F56 . . .

(v)any index of the prices of securities; [F57and

(vi)the ability or willingness of one or more persons to pay or repay a sum or sums owing at law or in equity to the society or a connected undertaking of the society;or]

(c)it involves a derivative investment falling within paragraph (d) of the definition in subsection (9) below and it is entered into for the purpose of limiting the extent to which any person will be affected by changes in any interest or exchange rate applicable to—

(i)a loan owed by him to;

(ii)shares held by him in; or

(iii)a deposit of his with,

the society, or a connected undertaking of the society.

(5)Nothing in subsection (1)(c) above shall apply in relation to any transaction entered into by a subsidiary undertaking of a building society, if it is entered into in the undertaking’s capacity—

[F58(a)as a person who has permission under [F59Part 4A] of the Financial Services and Markets Act 2000 to effect or carry out contracts of long-term insurance, or

(b)an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act, which has permission under paragraph 15 of that Schedule (as a result of qualifying for authorisation under paragraph 12 of that Schedule) to effect or carry out contracts of long-term insurance.]

. . .

(6)A building society shall also do all that is reasonably practicable to secure that neither it nor any of its subsidiary undertakings (either alone or with any or any others of those undertakings)—

(a)holds at any time more than 5 per cent of the issued share capital; or

(b)is at any time entitled to exercise, or to control the exercise of, more than 5 per cent of the voting power at any general meeting,

of an undertaking which is, at that time, doing any of the things which the society is prohibited from doing by subsection (1) above, or an undertaking whose subsidiary undertaking is, at that time, doing any of those things.

(7)The monetary limit in subsection (2) or (3) above refers to the time when the transaction is entered into; and where the amount or value of the consideration there referred to is not in sterling, it shall be converted at the rate of exchange prevailing at that time.

(8)For the purposes of subsection (2) or (3) above, two or more transactions which form part of a larger transaction or series of transactions shall be treated as a single transaction.

(9)In this section—

[F62(9A)Subsection (5) and the definition of “derivative investment” in subsection (9) must be read with—

(a)section 22 of the Financial Services and Markets Act 2000;

(b)any relevant order under that section; and

(c)Schedule 2 to that Act;]

(10)A building society, or subsidiary undertaking of a building society, shall not by reason of holding itself out as willing to issue its own securities be regarded for the purposes of this section as acting as a market maker in such securities.

(11)The Treasury may by order vary subsections (1) to (10) above by adding to or deleting from them any provision or by varying any provision contained in them.

(12)[F63The Treasury may] by order—

(a)substitute for the amount specified in subsection (2) or (3) above, or for the percentage specified in subsection (6) above, such other amount or percentage as they think appropriate; or

(b)vary subsection (4)(b) above by adding to or deleting from it any reference to a factor or by varying any reference to a factor contained in it.

(13)An order under subsection (11) or (12) above may make—

(a)different provision for different cases or purposes; and

(b)such supplementary, transitional and saving provision as appears to the Treasury F64 . . .to be necessary or expedient;

and the power to make such an order is exercisable by statutory instrument.

(14)No order shall be made under subsection (11) above unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.

(15)A statutory instrument containing an order under subsection (12) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F55S. 9A and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 10, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(i)

F56Word in s. 9A(4) omitted (1.7.2001) by virtue of S.I. 2001/1826, art. 2(a)

F57S. 9A(4)(b)(vi) and the word "and" immediately preceding inserted (1.7.2001) by S.I. 2001/1826, art. 2(b)

F58. 9A(5)(a)(b) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 195(2)(a)

F60Words in the definition of "collective investment scheme" in s. 9A(9) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 195(3)(a)

F61Definition of "derivative investment" in s. 9A(9) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 195(3)(b)

F62S. 9A(9A) inserted (1.12.2001) by S.I. 2001/3649, arts. 1, 195(4)

F63Words in s. 9A(12) substituted (17.8.2001 for certain purposes and otherwise prosp. ) by S.I. 2001/2617, arts. 2(a), 8, 13(1), Sch. 3 Pt. II, para. 138 (a)(i)(ii) (with art. 13(3), Sch. 5)

F64Words in s. 9A(13)(b) repealed (1.12.2001) by S.I. 2001/2617, arts. 2, 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I2001/3538, art. 2(a)

Modifications etc. (not altering text)

C29S. 9A(12): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(a)

F659BRestriction on creation of floating charges.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F66[Part IIIU.K. Advances, Loans and Other Assets]

Textual Amendments

F66Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Class 1 advances and class 2 advances secured on landU.K.

[F6710 Advances secured on land.U.K.

(1)A building society may make advances to members (in this Act referred to as “advances secured on land”) secured by—

(a)a mortgage of a legal estate or, as provided under subsection (6) below, an equitable interest in land in England and Wales or Northern Ireland, or

(b)a heritable security over land in Scotland,

and for that purpose may (in England and Wales or Northern Ireland) hold land with the right of foreclosure.

(2)Advances secured on land may, in accordance with sections 11 and 12—

(a)be fully or partly secured by a mortgage of the legal estate or equitable interest in land in England and Wales or Northern Ireland, or

(b)be fully secured by a heritable security over land in Scotland,

and in this Part “the basic security” means the security constituted by the legal estate in or heritable security over the land or, in a case where an equitable interest in land in England and Wales or Northern Ireland is or is also taken as security by virtue of this section, that constituted by that security or, as the case may be, the combined securities; and a reference to the land which is to secure an advance or on which an advance is secured is a reference to the estate or interest or the heritable security which constitutes or will constitute the basic security.

(3)The power to make an advance secured on land includes power, subject to the restriction imposed by subsection (4) below, to make, as a separate advance, an advance which is to be applied in or towards payment of the deposit for the purchase of the land (in this Part referred to as “an advance for a deposit for the purchase of land.”)

(4)The restriction referred to is that an advance for a deposit for the purchase of land must not exceed 10 per cent. of the total amount to be paid for the purchase of the land.

F68[(4A)The power to make an advance secured on land includes power to make an advance which is secured as mentioned in subsection (1) above by virtue of security granted otherwise than by the borrower (in this Act referred to as “an advance secured on third party land”).]

(5)An advance shall be treated for the purposes of this Act as secured by a mortgage of a legal estate in registered land in England and Wales or Northern Ireland notwithstanding that the advance is made before the [F69mortgagor] is registered as proprietor of the estate.

(6)A building society may advance money on the security of an equitable interest in land in England and Wales or Northern Ireland if the equitable interest is an equitable interest in land of a description and is created in circumstances prescribed in an order made by the Commission with the consent of the Treasury under this subsection and any conditions prescribed in the order are complied with.

(7)Any powers conferred on building societies by an order under subsection (6) above may be conferred on building societies of a description specified in the order or all building societies other than those of a description so specified.

(8)The power to make an order under subsection (6) above includes power—

(a)to prescribe the circumstances in which the power conferred by section 17(10) on building societies of the description specified therein is to be available to them; and

(b)to make such incidental, supplementary and transitional provision as the Commission considers necessary or expedient.

(9)An instrument containing an order under subsection (6) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10)The power to make advances secured on land includes power to make them on terms that include provision as respects the capital element in the mortgage debt (with or without similar provision as respects the interest element)—

(a)that the amount due to the society may be adjusted from time to time by reference to such public index of prices other than housing prices as is specified in the mortgage;

(b)that the amount due to the society may be adjusted from time to time by reference to such public index of housing prices as is specified in the mortgage;

(c)that the amount due to the society at any time shall be determined by reference to a share, specified or referred to in the mortgage, in the open market value of the property at that time;

and, in cases where the amount due to the society in respect of capital exceeds the amount advanced, references in this Act to the repayment of an advance include references to payment of the excess.

(11)Advances secured on land shallbe classified for the purposes of the requirements of this Part for the structure of commercial assets into—

(a)class 1 advances, and

(b)class 2 advances;

and in this Act “advances fully secured on land” means advances which are class 1 or class 2 advances, and any reference to “fully secured” shall be construed accordingly.

(12)Nothing in this section or section 11 or 12 is to be taken as precluding a society from taking other security for an advance secured on land than such security as is required for an advance to be a class 1 or class 2 advance under those sections; but the value of the other security shall be disregarded for the purpose of classifying the advance as a class 1 or class 2 advance.]

Textual Amendments

F67Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F68S. 10(4A) inserted (3.1.1995) by 1994 c. 40, ss. 16(2), 82(2)(a)

F69Word in s. 10(5) substituted (3.1.1995) by 1994 c. 40, ss. 39, 82(2)(e), Sch. 11 para. 7(2)

Modifications etc. (not altering text)

C30S. 10 restricted (1. 7. 1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

C31S. 10 excluded by S.I. 1987/1498, art. 7, Sch. 2 para. 1

[F7011 Class 1 and class 2 advancesU.K.

(1)The provisions of this section and section 12 define what is a class 1 advance and what is a class 2 advance for the purpose of the requirements of this Part for the structure of commercial assets and when an advance may, for those purposes, be treated partly as a class 1 advance and partly as a class 2 advance.

(2)Class 1 advances are advances as to which the society when it makes the advance is satisfied that the advance is an advance secured on land and that—

(a)the borrower is an individual;

(b)[F71where the advance is not an advance secured on third party land,]the land is for the residential use of the borrower or a dependant of his of a prescribed description;

F72[(ba)where the advance is an advance secured on third party land—

(i)the borrower intends that the advance will be used for the purpose of acquiring land for the residential use of himself or a dependant of his of a prescribed description; and

(ii)the land on which the advance is secured is for the residential use of the mortgagor or a dependant of his of a prescribed description;]

(c)the amount advanced will not exceed the value of the basic security (after deducting from that value any [F73outstanding amount secured by a mortgage of the land in favour of the society)]; and

(d)subject to subsection (5) below, no other mortgage of the land which is to secure the advance is outstanding in favour of a person other than the society;

and which are not made on terms as respects the capital element of the mortgage debt authorised by section 10(10)(b) or (c).

(3)Subject to any order made under section 12(1),

[F74(a)]the requirement in subsection (2)(b) above shall be treated as satisfied if no less than 40 per cent. of the area of the land is used for the residential purposes by the borrower or a dependant of his of a prescribed description;

[F75(b)the requirement in subsection (2)(ba)(i) above shall be treated as satisfied if the borrower intends that no less than 40 per cent. of the area of the land will be for the residential use of himself or a dependant of his of a prescribed description; and

(c)the requirement in subsection (2)(ba)(ii) above shall be treated as satisfied if no less than 40 per cent. of the area of the land is used for residential purposes by the mortgagor or a dependant of his of a prescribed description.]

(4)Class 2 advances are advances as to which the society when it makes the advance—

(a)either is not satisfied that the requirements for the time being of subsection (2) above are fulfilled or is satisfied that any of them is not fulfilled, but

(b)is satisfied that the advance is an advance secured on land, and

(c)is satisfied, where the amount advanced will exceed the value of the basic security (after deducting from that value any [F76outstanding amount secured by a mortgage of the land)], that the excess will be secured by the taking of security of a prescribed description in addition to the basic security, and

(d)is satisfied that no, or no more than one, other mortgage of the land which is to secure the advance is outstanding in favour of a person other than the society.

(5)The requirement in subsection (2)(d) and (4)(d) above shall be treated as satisfied if the advance is made on terms that the other mortgage is redeemed or postponed to the basic security.

(6)An advance for a deposit for the purchase of land is also a class 1 or class 2 advance according as it is made with a view to the making of a class 1 or class 2 advance secured on the land.

(7)Advances which would be class 2, and not class 1, advances by reason only that the extent of the residential use of the land is not such as to satisfy the requirement in subsection (2)(b) [F77or (2)(ba)(i) or (ii)] above shall be treated as class 1 advances if and to the extent prescribed by an order under section 12(5).

(8)For the purposes of the requirements of this Part for the structure of commercial assets—

(a)class 1 advances constitute class 1 assets, and

(b)class 2 advances constitute class 2 assets,

and accordingly the aggregate amount of mortgage debts outstanding in respect of class 2 advances counts in accordance with section 20 towards the limit applicable to class 2 assets under that section.

(9)For the purposes of subsections (2) and (4) above, where a building society makes an advance by instalments, any reference to the time when the society makes the advance is a reference to the time when it pays the first of the instalments, disregarding for this purpose any instalment which is to be applied towards payment of the deposit in respect of the purchase of the land which is to secure the advance.

(10)Subject to subsection (11) below, any land to which a building society becomes absolutely entitled by foreclosure or by release or other extinguishment of a right of redemption—

(a)shall as soon as may be conveniently practicable be sold or converted into money; and

(b)shall, until the sale or conversion, constitute a class 1 asset if the advance secured on the land was a class 1 advance and a class 2 asset if it was a class 2 advance.

(11)Where a building society which has for the time being adopted the powers conferred by section 17 becomes entitled to land as mentioned in subsection (10) above, and the land is land that may be held under that section, then, if the society—

(a)elects to hold the land under that section, or

(b)without such an election, retains the land after the expiry of the period of twelve months immediately following the date on which it so becomes entitled to the land.

the society shall be taken to hold the land under that section.

(12)An election under subsection (11) above shall be made by resolution of the board of directors and shall be irrevocable.

(13)If a building society contravenes subsection (10) above the society shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale and so shall any officer who is also guilty of the offence.

(14)For the purposes of this Act, the mortgage debt at any time, in relation to an advance secured on land, is the total amount outstanding at that time in respect of—

(a)the principal of the advance;

(b)interest on the advance; and

(c)any other sum which the borrower is obliged to pay the society under the terms of the advance.

(15)The reference in subsection (10) above to land to which a building society becomes absolutely entitled by foreclosure includes a reference to land which a building society has acquired by virtue of a decree of foreclosure under section 28 of the M4Conveyancing and Feudal Reform (Scotland) Act 1970.]

Textual Amendments

F70Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F71Words in s. 11(2)(b) inserted (3.1.1995) by 1994 c. 40, ss. 16(3)(a), 82(2)(a)

F72S. 11(2)(ba) inserted (3.1.1995) by 1994 c. 40, ss. 16(3)(b), 82(2)(a)

F73Words in s. 11(2)(c) substituted (3.1.1995) by 1994 c. 40, ss. 16(3)(c), 82(2)(a)

F74Words in s. 11(3) renumbered as s. 11(3)(a) (3.1.1995) by 1994 c. 40, ss. 16(4), 82(2)(a)

F75S. 11(3)(b)(c) inserted (3.1.1995) by 1994 c. 40, ss. 16(4), 82(2)(a)

F76Words in s. 11(4)(c) substituted (3.1.1995) by 1994 c. 40, ss. 16(5), 82(2)(a)

F77Words in s. 11(7) inserted (3.1.1995) by 1994 c. 40, ss. 39, 82(2)(e), Sch. 11 para. 7(3)

Modifications etc. (not altering text)

C32S. 11(1)(2)(4)–(7)(9)–(13)(15) excluded by S.I. 1987/1498, art. 7, Sch. 2 para. 2

C33S. 11(1)-(7), (9)-(13)(15) restricted (1. 7. 1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

C34S. 11(2)(b) extended by S.I. 1986/2169, art. 5(2)

C35S. 11(3) excluded by S.I. 1986/2169, art. 5(2) and by S.I. 1987/1498, art. 7, Sch. 2 para. 2

Marginal Citations

[F7812 Class 1 and class 2 advances: supplementary provisions.U.K.

(1)The Commission, by order in a statutory instrument, may as respects class 1 advances—

(a)specify the circumstances in which land is for a person’s residential use,

(b)specify who are to be a person’s dependants, and

(c)make such other incidental and supplementary and such transitional provision as the Commission considers necessary or expedient,

for the purposes of section 11(2); and in that subsection “prescribed” means prescribed in an order under this subsection.

(2)Without prejudice to the generality of subsection (1)(c) above, an order may prescribe evidence on which a building society is to be entitled to be satisfied (in the absence of evidence to the contrary) that the requirements of section 11(2) are fulfilled as respects an advance secured on land.

(3)The Commission, by order in a statutory instrument, may as respects class 2 advances—

(a)specify descriptions of security falling within this subsection which, for the purposes of paragraph (c) of section 11(4), may be taken for class 2 advances in addition to the basic security; and

(b)make such other incidental or supplementary and such transitional provision as it considers necessary or expedient for the purposes of paragraph (c) or (d) of that subsection;

and in that subsection “prescribed” means prescribed in an order under this subsection.

(4)The descriptions of additional security which fall within subsection (3)(a) above are guarantees, indemnities or other contractual promises made by virtue of, or by a public body established by or under, any enactment for the time being in force.

(5)The Commission, by order in a statutory instrument, may, as respects advances to be secured on land which is to any extent to be used for the residential use of borrowers or persons who are dependants of theirs for the purposes of section 11(2)—

(a)require so much of the amount to be advanced as is determined by or under the order to be treated as a class 1 advance;

(b)specify the circumstances in which and the conditions subject to which advances are to be so treated; and

(c)make such incidental, supplementary and transitional provision as the Commission considers necessary or expedient.

F79[(5A)Subsection (5) above shall also apply as respects advances secured on third party land which is to any extent used for the residential use of mortgagors or persons who are dependants of theirs for the purposes of section 11(2).]

(6)The Commission shall not make an order under this section, except with the consent of the Treasury.

(7)An instrument containing an order under this section shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8)For the purpose of facilitating the repayment to a building society of a class 1 advance or a class 2 advance, the society may make to the borrower, by way of addition to the advance, a further advance of or towards the cost of a single premium payable in respect of an appropriate policy of life assurance; and a sum added to an advance under this subsection shall be treated as not forming part of the advance for the purpose of determining whether the requirements of section 11(2) or (4) are satisfied with respect to the advance.

(9)Where an advance secured on land in England and Wales or Northern Ireland is made, then, for the purpose of determining whether the land is subject to a prior mortgage for the purposes of section 11(2)(d) or (4)(d) above, any outstanding charge over the land which is registered—

(a)in the case of land in England and Wales, in the appropriate local land charges register, and

(b)in the case of land in Northern Ireland, in the statutory charges register under section 87 of, and Schedule 11 to, the M5Land Registration Act (Northern Ireland) 1970,

shall be disregarded.

(10)If at any time when a class 1 advance or a class 2 advance secured on land is outstanding the building society—

(a)is satisfied on a revaluation that the value of the basic security has changed,

(b)is satisfied that so much of the mortgage debt as represents the principal of the advance has changed,

(c)[F80 in the case of an advance which is not an advance secured on third party land]is satisfied on notice given to it by the borrower that there has been a change in the use of the land,

F81[(ca)in the case of an advance which is an advance secured on third party land—

(i)is satisfied on notice given to it by the borrower that there has been a change in the use of the land acquired with the advance, or

(ii)is satisfied on notice given to it by the mortgagor that there has been a change in the use of the land on which the advance is secured, or]

(d)agrees to a change in the relative priority of the mortgage on which the advance is secured,

and is satisfied that the change is such that, if it were to make an advance equal to the mortgage debt at that time, the advance would instead be a class 2 advance or a class 1 advance, as the case may be, the advance shall be reclassified as from that time.

(11)Nothing in subsection (10) above requires a building society to revalue its securities from time to time.

(12)Every building society shall establish and maintain a system to ensure the safe custody of all documents relating to property mortgaged to the society.

(13)In this section “appropriate policy of life assurance”, with reference to an advance, means a policy of insurance which satisfies the following requirements, that is to say—

(a)the life assured is that of the person to whom the advance is made or his spouse, his son or his daughter, and

(b)it provides, in the event of the death, before the advance has been repaid, of the person on whose life the policy is effected, for payment of a sum not exceeding the amount sufficient to defray the sums which are, at and after the time of the death, payable to the society in respect of the advance and any addition made in respect of the premium.]

Textual Amendments

F78Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F79S. 12(5A) inserted (3.1.1995) by 1994 c. 40, ss. 16(6), 82(2)(a)

F80Words in s. 12(10)(c) inserted (3.1.1995) by 1994 c. 40, ss. 16(7)(a), 82(2)(a)

F81S. 12(1)(ca) substituted for word in s. 12(1)(c) (3.1.1995) by 1994 c. 40, ss. 16(7)(b), 82(2)(a)

Modifications etc. (not altering text)

C36S. 12(1)–(11)(13) excluded by S.I. 1987/1498, art. 7, Sch. 2 para. 3

C37S. 12(1)-(11)(13) restricted (1. 7. 1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

C38S. 12(12) excluded (temp) by S.I. 1986/2168, art. 12(2)(a)

C39S. 12(12) excluded by S.I. 1986/2168, art. 12(1)(a)

Marginal Citations

[F8213 Security for advances: valuation and supplementary and related provisions.U.K.

(1)It shall be the duty of every director of a building society to satisfy himself that the arrangements made for assessing the adequacy of the security for any advance to be fully secured on land which is to be made by the society are such as may reasonably be expected to ensure that—

(a)an assessment will be made on the occasion of each advance whether or not any previous assessment was made with a view to further advances or re-advances;

(b)each assessment will be made by a person holding office in or employed by the society who is competent to make the assessment and is not disqualified under this section from making it;

(c)each person making the assessment will have furnished to him a written report on the value of the land and any factors likely materially to affect its value made by a person who is competent to value, and is not disqualified under this section from making a report on, the land in question;

but the arrangements need not require each report to be made with a view to a particular assessment so long as it is adequate for the purpose of making the assessment.

(2)In relation to any land which is to secure an advance, the following persons are disqualified from making a report on its value, that is to say—

(a)the directors and any other officer or employee of the society who makes assessments of the adequacy of securities for advances secured on land or who authorises the making of such advances;

(b)where the society has made, or undertaken to make, to any person a payment for introducing to it an applicant for the advance, that person;

(c)where the advance is to be made following a disposition of the land, any person having a financial interest in the disposition of the land and any director, other officer or employee of his or of an associated employer; F83. . .

(d)where the advance is to be made following a disposition of the land, any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.

F84[(e)where the advance is to be made in connection with a disposition of other land to the borrower, any person having a financial interest in the disposition of the other land and any director, other officer or employee of his or of an associated employer; and

(f)where the advance is to be made in connection with a disposition of other land to the borrower, any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.]

(3)In relation to any land which is to secure an advance where the advance is to be made following a disposition of the land [F85or in connection with a disposition of other land to the borrower], the following persons are disqualified from making an assessment of the security or authorising the making of the advance, that is to say—

(a)any person, other than the building society making the advance, having a financial interest in the disposition F86. . . and any director, other officer or employee of his or of an associated employer; and

(b)any person receiving a commission for introducing the parties to the transaction involving the disposition and any director, other officer or employee of his.

(4)Any person who, being disqualified from doing so—

(a)makes a report on any land which is to secure an advance,

(b)makes an assessment of the adequacy of the security for an advance, or

(c)authorises the making of an advance,

and in the case of a person making a report does so knowing or having reason to believe that the report will be used or is likely to be used for the purposes of the advance, shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(5)For the purposes of this section, any two employers are associated if one is a body corporate of which the other (directly or indirectly) has control or if both are bodies corporate of which a third person directly or indirectly has control; and the expression “associated employer” shall be construed accordingly.

(6)In this section “commission” includes any gift, bonus or benefit and, for its purposes, a person shall be taken to have a financial interest in the disposition of any land if, but only if, he would, on a disposition of that land, be entitled (whether directly or indirectly, and whether in possession or not) to the whole or part of the proceeds of the disposition.

F82(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F82Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b)(o)(i), II(j)

F83Word immediately preceding s. 13(2)(d) repealed (3.1.1995) by 1994 c. 40, ss. 81, 82(2)(g), Sch. 17

F84S. 13(2)(e)(f) inserted (3.1.1995) by 1994 c. 40, ss. 39, 82(2)(e), Sch. 11 para. 7(4)

F85Words in s. 13(3) inserted (3.1.1995) by 1994 c. 40, ss. 39, 82(2)(e), Sch. 11 para. 7(5)(a)

F86Words in s. 13(3)(a) repealed (3.1.1995) by 1994 c. 40, ss. 39, 81, 82(2)(e)(g), Sch. 11 para. 7(5)(b), Sch. 17

Modifications etc. (not altering text)

C40S. 13 modified by S.I. 1986/2169, art. 6

C41S. 13(7) excluded by S.I. 1987/1498, art. 7, Sch. 2 para. 4

C42S. 13(7) restricted (1. 7. 1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

Other advances secured on landU.K.

[F8714 Power to make advances secured on land overseas.U.K.

(1)The appropriate authority may, with a view to conferring on building societies or building societies of particular descriptions powers to make advances to members secured on land outside the United Kingdom corresponding to the powers to make advances secured on land within the United Kingdom, by order—

(a)designate countries or territories outside the United Kingdom as countries or territories as respects which advances under this section may be made secured on the land;

(b)specify, or provide for the specification by direction of the Commission under the order of, the forms of security on land which may be taken for advances under this section, in any prescribed circumstances and subject to any prescribed conditions;

(c)determine, or provide for the determination under the order of, the classification of the advances (and accordingly of the mortgage debts) as class 1 advances or class 2 advances for the purposes of the requirements of this Part for the structure of commercial assets;

(d)provide for the application of the provisions of this Part applicable to advances secured on land to advances under this section with such modifications as appear to be appropriate;

(e)provide for any other provisions of this Act to have effect in relation to advances under this section with such modifications as appear to be appropriate; and

(f)make such incidental, supplemental or transitional provision as appears to be necessary or expedient.

(2)Any powers conferred on building societies under this section may be conferred on building societies of a specified description or all building societies other than those of a specified description.

(3)Where, by virtue of an order under subsection (1) above, advances are made by a building society on the security of land outside the United Kingdom, the aggregate amount of mortgage debts outstanding in respect of such of those advances as are class 2 advances under the order shall count in accordance with section 20 towards the limit applicable to class 2 assets under that section.

(4)Subsection (3) above is subject to any provision contained in the order.

(5)The “appropriate authority” for making an order under subsection (1) above is—

(a)as regards the relevant British overseas territories, the Commission acting with the consent of the Treasury, and

(b)as regards other countries or territories, the Treasury.

(6)An order under this section made as regards any of the relevant British overseas territories may make all or any of the powers conferred thereby exercisable by building societies without the need for adoption, but, in the absence of such a provision any power conferred under this section must, in order to be exercisable by a building society, be adopted by the society.

(7)The power to make an order under subsection (1) above is exercisable by statutory instrument and, as regards the procedure applicable to such an order,—

(a)if the instrument designates other countries or territories than any of the relevant British overseas territories, the order shall not be made unless a draft of it has been laid before and approved by resolution of each House of Parliament, and

(b)if the instrument designates any relevant British overseas territory and no other country or territory, the instrument shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8)In this section—

and any reference to a provision of this Part is a reference to that provision as applied to advances under this section.]

Textual Amendments

F87Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F88[F8914A Power to participate in secured syndicated lending.U.K.

(1)Subject to subsection (2) below, a building society may participate in syndicated lending—

(a)as a member of the lending syndicate, or

(b)as a person whose rights as a participant arise under an arrangement with a member of the lending syndicate (“a sub-participant”).

(2)Subsection (1) above only applies if—

(a)the syndicated lending is appropriately secured, and

(b)where the society’s participation is as a sub-participant, the society’s rights as such a participant are appropriately secured.

(3)The Commission may, with the consent of the Treasury, by order—

(a)make provision with respect to what constitutes appropriate security for the purposes of subsection (2)(a) or (b) above;

(b)make provision with respect to the classification, for the purposes of the requirements of this Part for the structure of commercial assets, of a society’s participation under this section in syndicated lending; and

(c)provide for the application of the provisions of this Part, with such modifications as appear to the Commission to be appropriate, to a society’s participation under this section in syndicated lending.

(4)The power conferred by subsection (3) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(5)A building society may only exercise the power conferred by this section if it has adopted it.]

Textual Amendments

F88Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F89S. 14A inserted (3.1.1995) by 1994 c. 40, ss. 17(1), 82(2)(a)

Other commercial assetsU.K.

[F9015 Loans for mobile homes.U.K.

(1)Subject to the provisions of this section, a building society may make mobile home loans to individuals, whether or not they are members of the society.

(2)A mobile home loan is a loan made for the purchase of a mobile home and secured by such security as the Commission may, with the consent of the Treasury, prescribe by order in a statutory instrument.

(3)No such loan shall be made unless the building society, when it makes the loan, is satisfied that—

(a)the borrower or a dependant of his of a prescribed description is or will be entitled under an agreement to which the M6Mobile Homes Act 1983 applies to station the mobile home on land forming part of a protected site;

(b)the mobile home is for the residential use of the borrower or a dependent of his of a prescribed description;

(c)the amount lent will not exceed the amount likely to be realised on a sale of the mobile home on the open market; and

(d)subject to subsection (4) below, no other security prescribed under subsection (2) above which is to secure the loan is outstanding in favour of a person other than the society.

(4)The requirement in subsection (3)(d) above shall be treated as satisfied if the loan is made on terms that the other loan is redeemed or postponed to it.

(5)A building society shall not make a mobile home loan to an individual if the principal exceeds—

(a)the limit for the time being imposed by or under subsection (7) below; or

(b)the balance remaining after deducting from that limit the aggregate of any other sums outstanding in respect of loans made under this section or section 16 by the society to that individual [F91and any facility limits agreed for the time being between the society and that individual][F92and also the cost of leasable chattels bailed under any current leasing agreement between the society and that individual];

and if two or more loans under this section or this section and section 16 are made simultaneously by the society to the same individual they shall be treated for the purposes of this subsection as a single loan of an amount equal to the aggregate of the principal of each of those loans.

(6)Joint borrowers under this section shall be treated, for the purpose of the limit on loans under this section, as a single individual and any sums outstanding in respect of loans made under this section or section 16 by the society to any one of the joint borrowers [F93and also the cost of leasable chattels bailed under any current leasing agreement between the society and any one of the joint borrowers are] to be taken into account in determining the balance available for any further loan to him or to him and any joint borrower with him [F94, and so is any facility limit which is agreed for the time being between the society and any one of the joint borrowers].

(7)The limit on loans to any one individual under this section is £10,000 or such sum as the Commission may, with the consent of the Treasury, specify by order in a statutory instrument.

(8)Loans under this section constitute class 3 assets for the purposes of the requirements of this Part for the structure of commercial assets and accordingly the aggregate of the amounts outstanding in respect of—

(a)the principal of loans under this section,

(b)the interest on those loans, and

(c)any other sums which borrowers are obliged to pay the society under the terms of those loans,

counts in accordance with section 20 towards the limits applicable to class 3 assets under that section.

(9)The power conferred by this section is not available to a building society which does not for the time being have a qualitying asset holding, but the cessation of its availability does not require the disposal of any property or rights.

(10)The power conferred by this section on a building society, if available to it, must in order to be exercisable, be adopted by the society.

(11)An instrument containing an order under subsection (2) or (7) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(12)In this section—

Textual Amendments

F90Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F95Definition inserted by S.I. 1987/1975, art. 8(1), Sch. 1 para. 3

F96Definitions inserted by S.I. 1988/1141, art. 4(1), Sch. 2 para. 3

Marginal Citations

[F9716 Power to lend to individuals otherwise than by class 1 or class 2 advances etc.U.K.

(1)Subject to the provisions of this section, a building society may, with or without security and whether or not at interest, lend money to individuals, whether or not they are members of the society.

(2)Advances fully secured on land do not constitute loans under this section except that an advance for a deposit for the purchase of land shall, if the purchase is not completed within the period of six months beginning with the date of the advance, be treated after the end of that period as a loan under this section and shall accordingly cease to be a class 1 or class 2 advance.

(3)Mobile home loans do not constitute loans under this section [F98and neither do bridging loans made under Part IV of Schedule 1 to the Building Societies (Commercial Assets and Services) Order 1988].

(4)The power to lend money under this section includes power, as regards members of and depositors with the society, to lend on overdraft on such terms as the society thinks fit.

(5)Subject to subsection (9) below a building society shall not make a loan to an individual under this section if the principal exceeds—

(a)the limit for the time being imposed by or under subsection (8) below; or

(b)the balance remaining after deducting from that limit the aggregate of any other sums outstanding in respect of loans made under this section by the society to that individual [F99and any facility limits agreed for the time being between the society and that individual][F100and also the cost of leasable chattels bailed under any current leasing agreement between the society and that individual];

and if two or more loans under thissection or this section and section 15 are made simultaneously by the society to the same individual they shall be treated for the purposes of this subsection as, in the case of loans under this section, a single loan of an amount equal to the aggregate of the principal of each of those loans and, in the case of loans under this section and section 15, as made on different occasions such that loans under section precede those made under that section.

(6)Subsection (5) above shall have effect (subject to subsection (9) below) in a case where a building society has made a loan under section 15 as if it precluded a building society from making a loan to an individual under this section if the principal exceeds—

(a)the limit referred to in paragraph (a) of it; or

(b)the balance referred to in paragraph (b) of it; or

(c)the balance remaining after deducting from the limit imposed by or under subsection (7) of that section the aggregate of any sums outstanding in respect of loans made under that section and under this section by the society to that individual [F101and any facility limits agreed for the time being between the society and that individual][F102and also the cost of leasable chattels bailed under any current leasing agreement between the society and that individual].

(7)Joint borrowers under this section shall be treated, for the purpose of the limit on loans under this section, as a single individual and any sums outstanding in respect of loans made under this section or section 15 by the society to any one of the joint borrowers [F103and also the cost of leasable chattels bailed under any current leasing agreement between the society and any one of the joint borrowers are] to be taken into account in determining the balance available for any further loan to him or to him and any joint borrower with him [F104, and so is any facility limit which is agreed for the time being between the society and any one of the joint borrowers].

(8)The limit on loans to any one individual under this section is £5,000 or such other sum as the Commission may, with the consent of the Treasury, specify by order in a statutory instrument.

(9)The limit on loans to any one individual under this section does not apply to an advance for a deposit for the purchase of land which has come to be treated as a loan under this section and accordingly no account shall be taken of it for the purposes of subsection (5) above.

(10)An order under subsection (8) above may specify different sums as the limit in relation to individuals in different circumstances.

(11)Loans under this section constitute class 3 assets for the purposes of the requirements of this Part for the structure of commercial assets and accordingly the aggregate of the amounts outstanding in respect of—

(a)the principal of loans under this section,

(b)the interest on those loans,and

(c)any other sums which borrowers are obliged to pay the society under the terms of those loans,

counts in accordance with section 20 towards the limits applicable to class 3 assets under that section.

(12)The power conferred by this section is not available to a building society which does not for the time being have a qualifying asset holding, but the cessation of its availability does not require the disposal of any property or rights.

(13)The powers conferred by this section on a building society, if available to it, must, in order to be exercisable, be adopted by the society.

(14)An instrument containing an order under subsection (8) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(15)If at any time when a loan under this section which is secured by a mortgage of any land is outstanding, the building society is satisfied—

(a)on a revaluation, that the value of the security has changed,

(b)[F105where the mortgage is granted by the borrower,] on notice given to it by the borrower that there has been a change in the use of the land,

F106[(c)where the mortgage is granted otherwise than by the borrower and the loan has been used to purchase land—

(i)on notice given to it by the borrower that there has been a change in the use of the land purchased, or

(ii)on notice given to it by the mortgagor that there has been a change in the use of the mortgaged land, or

(d)on notice given to it—

(i)where the mortgage is granted by the borrower, by him, and

(ii)where the mortgage is granted otherwise than by the borrower, by the mortgagor,]

that there has been a change in the relative priority of the mortgage and that the change is such that, if it were to make a loan equal to the mortgage debt at that time and on that security, the loan would be a class 1 advance or, as the case may be, a class 2 advance, then the outstanding loan shall be reclassified as from that time.

(16)Nothing in subsection (15) above requires a building society to revalue its securities from time to time.

[F107(17)In this section—

Textual Amendments

F97Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

F105Words in s. 16(15)(b) inserted (3.1.1995) by 1994 c. 40, ss. 16(8)(a), 82(2)(a)

F106S. 16(15)(c)(d) substituted for words in s. 16(15) (3.1.1995) by 1994 c. 40, ss. 16(8)(b), 82(2)(a)

[F10817 Power to hold and develop land as commercial asset.U.K.

(1)Subject to subsections (2), (9) and (11) below, a building society may acquire, hold and dispose of land in the United Kingdom for purposes other than those for which it may acquire, hold or dispose of land under section 6 or 10.

(2)Land may not be acquired or held or disposed of by way of lease under this section except where the land is or is to be used—

(a)primarily for residential purposes, or

(b)for purposes incidental to the use of adjoining land held or to be held by the society which is or is to be used primarily for residential purposes.

(3)A building society may develop or participate in developing for use for residential purposes or purposes connected with the residential use of land any land it holds under this section.

(4)If land acquired under this section ceases to be used for the purposes authorised by subsection (2) above the society shall sell its estate or interest in the land as soon as it is conveniently practicable without undue loss to the society.

(5)Land held under this section constitutes a class 3 asset for the purposes of the requirements of this Part for the structure of commercial assets and accordingly the aggregate value of all land so held counts in accordance with section 20 towards the limits applicable to class 3 assets under that section.

(6)Premises held under section 6, by virtue of subsection (5) of that section, shall, in prescribed circumstances, be treated in their entirety (and regardless of their use) as land held under this section for the purposes of the requirements of this Part for the structure of commercial assets and subsection (5) above applies accordingly.

(7)The Commission, with the consent of the Treasury, may by order made by statutory instrument make such provision for the purposes of subsection (6) above as it thinks fit and in that subsection “prescribed” means prescribed in an order under this subsection.

(8)An instrument containingan order under subsection (7) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(9)Except as provided in subsection (10) below, the powers conferred by this section are not available to a building society which does not for the time being have a qualifying asset holding, but the cessation of their availability does not require the disposal of any property or rights.

(10)A building society which does not for the time being have a qualifying asset holding may acquire, hold and dispose of land which is or is to be used for residential purposes if the purpose of the acquisition and holding of the land is to enable the society to make advances on the security of equitable interests in the land in the circumstances authorised by an order under section 10(6).

(11)The powers conferred by this section on a building society, if available to it, must in order to be exercisable, be adopted by the society.]

Textual Amendments

F108Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Modifications etc. (not altering text)

C43S. 17 extended by S.I. 1987/1942, art. 3

C44S. 17(10) excluded by S.I. 1986/2099, art. 8

F109[18 Power to invest in subsidiaries and other associated bodies.U.K.

(1)Subject to the following provisions of this section, a building society may—

(a)acquire and hold shares or corresponding membership rights in bodies corporate and form or take part in forming bodies corporate, and

(b)provide bodies corporate in which it holds shares or such rights or to which it is, for the purpose of any power under this section, linked by resolution with any of the following supporting services—

(i)loans of money, with or without security and whether or not at interest,

(ii)grants of money, whether or not repayable,

(iii)guarantees of the discharge of their liabilities, and

(iv)the use of services or property, whether or not for payment;

and in this section “invest” means the exercise of any of the powers conferred by paragraph (a) and “support” means the exercise of any of the powers conferred by paragraph (b) above.

(2)A building society may invest in or support the following bodies corporate (referred to as “qualifying bodies”) but no others, that is to say—

(a)companies or industrial and provident societies;

(b)bodies formed in another member State for the purpose of carrying on in another member State businesses which consist wholly or mainly in lending money on the security of land and do not (where that is not the whole business) include lending on land in the United Kingdom (referred to as “corresponding European bodies”), and

(c)bodies corporate (whether or not falling within paragraph (a) or (b) above) designated as suitable for investment and support or for support for the purposes of this section by an order (referred to as “a designation order”) made by the Commission with the consent of the Treasury.

(3)A designation order may—

(a)designate a particular body or designate descriptions of bodies corporate,

(b)make different provision for different descriptions of building society,

(c)determine, or provide for the determination under the order of, the extent to which, the purposes for which, and the conditions subject to which, investment or support is permitted, and

(d)make such transitional and consequential provision as the Commission considers necessary or expedient.

(4)Subject to subsection (5) below, a building society shall not invest in or support a qualifying body so as to enable that body on its own account, in the United Kingdom, to—

(a)lend money to members of the public on the security of land by loans corresponding to advances secured on land,

(b)accept deposits of money otherwise than in such circumstances that their acceptance would not constitute its business a deposit-taking business or in the course of or for the purposes of providing a service for the time being specified in Part I of Schedule 8 to this Act;

but, subject to that, it may invest in or support a qualifying body so as to enable that body to carry on any activity which it is within the powers of the society to carry on, but, subject to subsection (5) below, no others.

(5)In the case of a qualifying body designated, or included in a description of bodies designated, by a designation order a building society may also invest in or support it for such purposes as are permitted by or under the designation order.

(6)Subject to subsection (7) and (8) below, a building society shall not invest in or support a qualifying body whose objects enable it—

(a)to carry on activities which are outside the powers of the society,

(b)to invest in other bodies corporate, or

(c)to support other bodies corporate;

but this does not imply that it is unlawful for the society to complete the performance of any contractual obligations lawfully incurred in providing a supporting service.

(7)Subsection (6) above shall not operate so as to restrict a building society’s powers under this section in relation to a corresponding European body.

(8)Subsection (6) above shall not prevent a building society from investing in or supporting a qualifying body—

(a)if that body is, in relation to the society, a designated body and the investment or support is made in accordance with the designation order,

(b)if, not being a body whose objects enable it to carry on activities outside the powers of the society, the investment or support is made or given with the consent of the Commission and subject to any conditions specified in the instrument giving the consent, or

(c)for a period of three months, pending the alteration of the objects of that body.

and that subsection shall not prevent a building society from investing in a qualifying body if the shares or corresponding membership rights in that body would, by virtue of an order under section 19, constitute class 3 assets in the hands of the society.]

(9)For the purposes of any power conferred by this section a body corporate is “linked by resolution” to a building society if the board of directors of the society has passed a resolution making that power exercisable in relation to that body and the resolution is in force.

(10)No power to invest in or support a corresponding European body is available to a building society which does not for the time being have a qualifying asset holding, but the cessation of its availability by virtue of this subsection does not require the disposal of any property or rights.

(11)The powers conferred by this section on a building society, if available to it, must, in order to be exercisable, be adopted by the society and must be adopted in their entirety without any restriction except a restriction with reference to the description of body corporate in relation to which the powers to invest in or support are to be exercisable.

(12)A building society whose board of directors has passed a resolution in pursuance of subsection (9) above shall send three copies of a record of the resolution signed by the secretary of the society to the central office and paragraph 4(3), (4) and (5) of Schedule 2 to this Act shall apply as it applies to a record of the alteration of a building society’s powers.

(13)Where the board of directors of a building society passes a resolution rescinding a resolution passed in pursuance of subsection (9) above the society shall send three copies of a record of the rescinding resolution signed by the secretary of the society to the central office and paragraph 4(3), (4) and (5) of Schedule 2 to this Act shall apply as it applies to a record of the alteration of a building society’s powers, but subject to subsection (14) below.

(14)No rescinding resolution shall be registered without the consent of the Commission.

(15)Where, by virtue of this section, property is held by a building society the property shall constitute class 3 assets for the purposes of the requirements of this Part for the structure of commercial assets and"accordingly the aggregate value of the property shall count in accordance with section 20 towards the limits applicable to class 3 assets under that section.

(16)The power to make an order under subsection (2)(c) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(17)In this section—

and in this Act “associated body”, in relation to a building society, means a body as respects which any of the following conditions is satisfied, that is to say—

(i)the body is one in which the society holds shares or corresponding membership rights, or

(ii)the body is one to which the society is linked by resolution, or

(iii)the body is one in which, by virtue of subsection (8)(b) above, shares or corresponding membership rights are held by a body which falls within (i) or (ii) above;

and “associated” shall be construed accordingly.

Textual Amendments

F109Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Modifications etc. (not altering text)

C45S. 18 modified by S.I. 1987/1498, art. 7, Sch. 2 para. 5

C46S. 18 modified (1.7.1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

Marginal Citations

[F11119 Power for Treasury to add powers to hold other descriptions of class 3 assets.U.K.

(1)The Treasury may, with a view to extending or altering, or extending to other descriptions of building societies, the forms of property which are to constitute class 3 assets in the hands of building societies or building societies of particular descriptions, by order—

(a)specify forms of property which a building society is to have power to acquire, hold and dispose of as assets of that class, subject to any specified conditions or restrictions;

(b)without prejudice to paragraph (a) above, specify descriptions of bodies corporate shares or other interests or rights in which a building society is to have power to acquire, hold and dispose of as assets of that class, subject to any specified conditions or restrictions;

(c)make any amendments of or repeals in this Act which are consequential on the exercise of its powers under paragraph (a) or (b) above;

(d)make such incidental, supplemental or transitional provision as it considers necessary or expedient.

(2)The powers conferred by subsection (1) above may be exercised so as to apply in relation to property situated or bodies incorporated within the United Kingdom or any other member State or other country or territory and so as to be exercisable for purposes other than the purposes of building societies under the powers conferred on them for the time being by or under this Act.

(3)Any powers conferred on building societies under this section may be conferred on building societies of a specified description or all building societies other than those of a specified description.

(4)Any power conferred on a building society under this section, if available to it, must, in order to be exercisable, be adopted by the society.

(5)Where, by virtue of an order under subsection (1)(a) or (b) above, property is held by a building society the property shall constitute class 3 assets for the purposes of the requirements of this Part for the structure of commercial assets and accordingly the aggregate value of the property, as determined in accordance with the order, shall count in accordance with section 20 towards the limits applicable to class 3 assets under that section.

(6)Subsection (5) above is subject to any provision contained in the order.

(7)The power to make an order under subsection (1) above is exercisable by statutory instrument but no such order shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.

(8)In this section—

Textual Amendments

F111Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Commercial asset structure requirementsU.K.

[F11220 Commercial asset structure requirements for building societies.U.K.

(1)The requirements for the structure of commercial assets applicable to building societies are the following.

(2)The class 2 assets or, if it has class 3 assets, the aggregate of the class 2 and class 3 assets held by a building society at the end of a financial year shall not exceed whichever is the greater of—

(a)10 per cent. of the total commercial assets held by the society at that time, or

(b)an amount corresponding to that percentage of the total commercial assets held by the society at the end of the preceding financial year.

(3)The class 3 assets (if any) held by a building society at the end of a financial year shall not exceed whichever is the greater of—

(a)5 per cent. of the total commercial assets held by the society at that time, or

(b)an amount corresponding to that percentage of the total commercial assets held by the society at the end of the preceding financial year.

(4)The Treasury may by order made by statutory instrument direct that subsection (2) or (3) above shall have effect during the currency of the order as if such percentage as is specified in the order were substituted for the percentage specified in that subsection, not being a percentage greater than 25 per cent. in the case of subsection (2) and 15 per cent. in the case of subsection (3) above.

(5)An order under subsection (4) above may—

(a)divide class 3 assets into sub-classes for the purposes of the order by reference to the provision of or made under this Part from which they arise;

(b)subject to subsection (6) below, prescribe different limits for different sub-classes; and

(c)make such transitional provision as appears to the Treasury to be necessary or expedient;

and any reference in this Act to a limit for a class of commercial assets shall, if a limit is in force under subsection (4) above for any sub-class of class 3 assets, be construed as including a reference to the limit for that sub-class.

(6)No order under subsection (4) above shall prescribe as a limit for a sub-class of class 3 assets a percentage of total commercial assets less than the percentage in force immediately before the making of the order for that sub-class or, if the subclass is created by the order, for class 3 assets generally

(7)An order under subsection (4) above shall not be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(8)The amount or value of the assets of any class of a building society for the purposes of this section is the amount or value as shown in the latest balance sheet or such other amount or value as the Commission determines to be the correct or, as the case requires, appropriate amount or value; and where the Commission determines an amount or value under this subsection the appropriate alterations shall be noted against the annual accounts of the society kept in the public file of the society.

(9)In determining for the purposes of this section the asset holding of a building society with which another body corporate is associated there shall, subject to subsection (12) below, be attributed to the society, in accordance with aggregation rules made by the Commission with the consent of the Treasury under this subsection, the whole or part of the assets of whatever description of the associated body, as provided in the rules and subject to any exceptions provided in the rules.

(10)The power to make aggregation rules under subsection (9) above includes power to make—

(a)different rules for different circumstances,

(b)provision for assets of societies to be disregarded,

(c)provision for assets to be attributed to any class of assets of societies, and

(d)such supplementary, transitional and saving provisions as appear to the Commission to be necessary or expedient.

(11)The power to make aggregation rules under subsection (9) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(12)The Commission may, on the application of a building society, approve rules to be applied for the purposes of this section for the attribution to the society of assets of bodies associated with the society; and so long as the rules continue to be approved by the Commission they, and not the aggregation rules in force under subsection (9) above, shall apply for the attribution of assets for the purposes of this section.

(13)If the commercial assets of any class of a building society exceed the limits in force under this section the powers conferred on the Commission by section 36 shall become exercisable in relation to the society, but exceeding the limit shall not affect the validity of transactions effected in excess of it nor require the disposal of any assets.]

Textual Amendments

F112Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Modifications etc. (not altering text)

C47S. 20 modified (temp.) by S.I. 1986/2168, art. 8(3)

C48S. 20 modified by S.I. 1986/2168, art. 4(2)(a)(i)(3)

C49S. 20 amended (temp.) by Building Societies (Limits on Commercial Assets) Order 1988, S.I. 1988/1142, art. 2

C50S. 20(2)(3) excluded by S.I. 1986/2168, art 5

Liquid assetsU.K.

[F11321 Liquid assets.U.K.

(1)Subject to the following provisions of this section, a building society shall secure that, of its total assets, it keeps such a proportion of them having such a composition as will at all times enable the society to meet its liabilities as they arise.

(2)A building society may keep assets of an authorised character beyond those required for the purpose of complying with subsection (1) above.

(3)Subject to subsections (5) and (6) below, the assets held by a building society under subsection (1) or (2) above—

(a)shall not exceed in the aggregate a proportion of its total assets greater than 33 per cent., and

(b)shall be composed of assets of an authorised character and no others;

but, subject to that, a building society, in deciding on the composition and proportion appropriate for the purpose of complying with subsection (1) above, shall have regard to the range and scale of its business and the composition and character of its assets and liabilities.

(4)Subsection (3) above, in its application to a building society with which other bodies corporate are associated, is to be read as requiring the society to have regard to the range and scale of the business, and the composition and character of the assets and liabilities, of the society and the associated bodies.

(5)The Commission may, by order made with the consent of the Treasury, direct that this section shall have effect during the currency of the order as if such percentage as if specified in the order were substituted for the percentage specified in subsection (3) above; but any order under this subsection shall expire (unless previously revoked) at the end of the period of twelve months beginning with the day on which the order came into operation.

(6)The Commission may, at any time, by notice to a building society, direct that the limit in force under this section shall not, subject to any conditions specified in the notice, apply to the society during such period as the Commission specifies in the notice.

(7)Regulations to be known as liquid asset regulations shall be made by the Commission, with the consent of the Treasury, for the purposes of this section and such regulations—

(a)shall prescribe descriptions of assets as assets of a character which societies may, in any prescribed circumstances and subject to any prescribed conditions, hold under this section for the purpose of meeting their liabilities as they arise,

(b)may make different provision for different descriptions of building societies, and

(c)may make such supplementary or incidental provision and such transitional provision as appears to the Commission to be necessary or expedient.

(8)The power to make an order or regulations under subsection (5) or (7) above is exercisable by statutory instrument which shall be subject to annulmentin pursuance of a resolution of either House of Parliament.

(9)If the assets of a building society which are kept in the form directed by subsection (1) above exceed at any time the percentage in force under this section at that time the powers conferred on the Commission by section 36 shall become exercisable in relation to the society, but exceeding the limit shall not affect the validity of transactions effected in excess of it.

(10)In this section—

Textual Amendments

F113Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Liabilities of associated bodiesU.K.

F11422. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F114S. 22 repealed (11.6.1996) by S.I. 1995/3233, art. 5(1) (with art. 5(2))

Other powersU.K.

[F11523 Power to hedge.U.K.

(1)Subject to subsections (3) and (4) below, a building society may effect contracts of a prescribed description for the purpose of reducing the risk of loss arising from changes in interest rates, currency rates or other factors of a prescribed description which affect its business.

(2)The Commission, with the consent of the Treasury, may by order—

(a)specify as contracts which building societies have power to effect under this section descriptions of contract whose purpose or one of whose purposes is the reduction of the risk to businesses of loss arising from the factors specified in subsection (1) above or other similar factors, and

(b)regulate, or provide for the regulation of, the terms on which, the persons or descriptions of persons with whom, and the circumstances in which, contracts of a description specified under paragraph (a) above, may be effected by building societies.

(3)Except as provided under subsection (4) below, the powers conferred by this section are not available to a building society which does not for the time being have a qualifying asset holding, but the cessation of their availability does not require the disposal of any property or rights.

(4)The Commission, with the consent of the Treasury, may by order provide that subsection (3) above shall not have effect, as regards prescribed powers, in relation to prescribed descriptions of building societies.

(5)The powers conferred by this section on a building society, if available to it, must, in order to be exercisable, be adopted by the society.

(6)The power to make an order under subsection (2) or (4) above—

(a)includes power to make such transitional provision as the Commission considers necessary or expedient, and

(b)is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7)In this section “prescribed” means prescribed in an order under subsection (2) or (4) above, as the case may be.]

Textual Amendments

F115Pt. III (ss. 10-23) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)

Part IVU.K. Protection of Investors

Modifications etc. (not altering text)

C51Pt. IV (ss. 24-33) modified (1.7.1995) (temp. until 31.12.1999) by S.I. 1995/1442, reg. 54(2)

Investor Protection SchemeU.K.

F11624. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F116Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C52Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F11725. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F117Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4, (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C53Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F11825A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F118S. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C54Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F11926. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F119Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538,art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C55Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F12027. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F120Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C56Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F12127A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F121Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C57Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F12228. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F122Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C58Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F12329. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F123Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C59Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F12429A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F124Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C60Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

F12530. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F125Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C61Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

Other provisionsU.K.

F12631. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F126Ss. 24-31 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1). Ss. 24-31 continued (with modifications) (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. I; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C62Ss. 24-31: amendment to earlier affecting provision SI 2001/2967, arts. 1(2), 9(c), Sch. 1 Pt. 1 (1.4.2013) by The Financial Services Act 2012 (Consequential Amendments and Transitional Provisions) Order 2013 (S.I. 2013/472), Sch. 2 para. 56(h)(ii)

32 Special provisions as regards investors.U.K.

The Provisions of Schedule 7 to this Act relating to shareholders in and depositors with a building society shall have effect.

[F12733 Assistance by building societies to other building societies.U.K.

Where it appears to the Commission that a building society is in financial difficulties it may authorise a building society to lend money to that society, and a building society shall have power to do so accordingly.]

Textual Amendments

F127S. 33 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(b), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(j)(y)(cc)(iii)

[F128Part VU.K. Powers to Provide Services]

Textual Amendments

F128Pt. V (ss. 34-35) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(c), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(j)(y)(cc)(iv)

[F12934 Powers to provide financial services or services relating to land.U.K.

(1)A building society may provide services of the descriptions for the time being specified in Part I of Schedule 8 to this Act subject to the restrictions (if any) for the time being specified in Part II or III of that Schedule.

(2)The appropriate authority may by order vary Schedule 8 by adding to or deleting from it any description of service or any provision or by varying any description of service or any provision for the time being specified or contained in it but not so as to confer any power to provide services other than services that appear to the authority making the order to be financial services or services relating to land or to be services similar to any such services.

(3)Any power conferred on building societies under subsection (2) above may be conferred on building societies of a specified description or all building societies other than those of a specified description.

(4)Where a provision of Part III of that Schedule states that a power to provide a specified service is available only to a subsidiary or other associated body of a building society the power to provide that service is to be treated as a power of the society for the purposes of section 18 only.

(5)Any power to provide a specified service, if available to a building society or any subsidiary or other associated body, must, in order to be exercisable, be adopted by the society.

(6)Subject to any specified restriction, any power to provide a specified service shall be exercisable in relation to members of the building society or other persons.

(7)Part IV of Schedule 8 has effect for supplementing Parts I, II and III of that Schedule and the power under subsection (2) above to vary that Schedule includes, without prejudice to the generality of that subsection, power to make such provision as appears to the authority making the order to be appropriate by way of a sanction for contravention of any restriction for the time being contained in Part III.

(8)The “appropriate authority” for the purpose of exercising the powers conferred by this section is the Treasury as regards any variation of Part I of Schedule 8 with or without other provision and the Commission in any other case.

(9)The power to make an order under subsection (2) above is exercisable by statutory instrument and—

(a)in the case of an order varying Part I of Schedule 8 with or without other provision no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament, and

(b)in the case of any other order, the instrument containing it shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10)An order under subsection (2) above may make such incidental and transitional provision as appears to the authority making the order to be necessary or expedient.

(11)In this section—

Textual Amendments

F129Pt. V (ss. 34-35) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)(y)(cc)(iv)

F130[F13135Prohibition on linking services.U.K.

(1)A building society which, or a subsidiary of which, provides services of any description specified in Part I of Schedule 8 to this Act shall not offer to make a class 1 advance to any person subject to a condition that any services of that description which are or may be required by that person in connection with the making of the advance shall be provided by the society or its subsidiary.

(2)Where, in connection with a class 1 advance by a building society, several services are made available by a building society or by a building society and one or more of its subsidiaries the society shall not, and shall secure that each of its subsidiaries does not,make the services available on terms other than terms which distinguish the consideration payable for each service so made available; nor shall any of its subsidiaries make the services available on terms other than terms which make that distinction.

(3)Nothing in subsection (2) above prevents a service from being provided free of charge in particular circumstances.

(4)If a building society contravenes subsection (1) or (2) above the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(5)If a body corporate which is a subsidiary of a building society contravenes subsection (2) above the body corporate shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.]

Textual Amendments

F131Pt. V (ss. 34-35) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(a), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(b), II(j)(y)(cc)(iv)

Part VIU.K. Powers of Control of the [F132appropriate authority]

Textual Amendments

F133[Powers in relation to principal purpose and nature limits]U.K.

Textual Amendments

F133S. 36 and cross-heading substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 13(1), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(k)

[F13436 Power to direct restructuring of business etc.U.K.

(1)The provisions of this section have effect where, by reason of a building society’s failure to comply with—

(a)the requirement imposed by section 5(1)(a) or (b) (purpose or principal purpose and principal office);

(b)the requirement imposed by section 6(1) (the lending limit); or

(c)the requirement imposed by section 7(1) (the funding limit),

the powers conferred by this section become exercisable by the [F135appropriate authority] in relation to the society (the requirements referred to in paragraphs (a), (b) and (c) above being referred to in this section as “the relevant statutory requirements”).

(2)The [F135appropriate authority] may give the society a direction under subsection (3), (5) or (6) below.

(3)A direction by the [F135appropriate authority] under this subsection is a direction requiring the society, within a specified period, to submit for its approval a plan (in this section referred to as a “restructuring plan”) designed to secure the following purposes, that is to say—

(a)that the society will, by the end of a specified period, comply with the relevant statutory requirements as applied at the last day of that period, and

(b)that it will not thereafter fail to comply with those requirements.

(4)For the purpose of applying the relevant statutory requirements as directed by subsection (3)(a) above—

(a)in the case of a requirement which operates by reference to a quarter day, the day as at which the requirements are to be applied shall be treated as such a day; and

(b)the assets and liabilities of the society shall be determined by reference to a balance sheet prepared by the directors by reference to that day and sent to the [F135appropriate authority] within the period of three months beginning with that day;

and subsection (4) of section 81 shall apply in the event of a default in complying with this provision as it applies in the event of a default in complying with subsection (2) of that section.

(5)A direction by the [F135appropriate authority] under this subsection is a direction requiring the society—

(a)within a specified period, to submit to its members for their approval at a meeting the requisite transfer resolutions for a transfer of the business of the society to a company under section 97; and

(b)to notify the [F135appropriate authority] [F136and, if the appropriate authority is the PRA, the FCA] of the result of the meeting.

(6)A direction by the [F135appropriate authority] under this subsection is a direction requiring the society, at its option, either—

(a)within a specified period, to submit for approval a restructuring plan; or

(b)within a specified period, to submit to its members for their approval at a meeting the requisite transfer resolutions for a transfer of the business of the society to a company under section 97;

and, within a specified period, to notify the [F135appropriate authority] [F137and, if the appropriate authority is the PRA, the FCA] of the option it has decided to pursue.

(7)Where the [F135appropriate authority] gives a direction under subsection (3), (5) or (6) above, it may also give a direction under this subsection—

(a)imposing limitations on the issue of shares, the acceptance of deposits or the making of loans;

(b)requiring the society within a specified period to take certain steps, or to refrain from adopting or pursuing a particular course of action, or to restrict the scope of its business in a particular way;

(c)requiring the society within a specified period to take steps with regard to the conduct of the business of any connected undertaking of the society;

(d)requiring within a specified period the removal of any director or other officer.

(8)Where a restructuring plan is submitted by a society to the [F135appropriate authority] under subsection (3) or (6) above then—

(a)if it appears to the [F135appropriate authority] that the plan is reasonably likely to secure its purposes, the [F135appropriate authority] shall approve it and direct the society to carry it out;

(b)if it appears to it that the plan is, with modifications, likely to secure its purposes and the [F135appropriate authority] and the society agree on appropriate modifications within the period of 21 days from the date on which the [F135appropriate authority] notifies the society of the modifications it proposes for the society’s agreement, the [F135appropriate authority] shall approve the plan as modified and direct the society to carry it out;

but otherwise it shall reject the plan.

(9)Where a meeting is held, in pursuance of a direction under subsection (5) or (6) above, for the purpose of voting on the requisite transfer resolutions, then—

(a)if the resolutions are agreed to and the confirmation of the transfer by the [F135appropriate authority] is obtained, the society shall proceed under section 97 to transfer its business to a successor company;

(b)if either resolution is disagreed to, the society shall notify the [F135appropriate authority] of that fact as soon as it is practicable to do so.

(10)In the event of the [F135appropriate authority] receiving a notice from a society under subsection (9)(b) above, it may, if it thinks fit, serve on the society a direction requiring it, within a specified period, to submit to the [F135appropriate authority] for its approval a restructuring plan; and if the [F135appropriate authority] does so, subsection (8) above shall apply as if the plan had been submitted under subsection (3) above.

(11)The [F135appropriate authority] may, if it thinks fit, extend or further extend any period during which a building society is to take any steps required of it under any of the foregoing provisions of this section and may do so whether or not application is made to it before the expiry of the period in question.

(12)If a building society which has been directed under subsection (8) above to carry out a restructuring plan fails, within the period allowed to it under the foregoing provisions of this section, to secure the purpose of the plan specified in subsection (3)(a) above, the powers conferred on the [F135appropriate authority] by section 36A shall become exercisable in relation to the society.

(13)If a building society fails, within the period allowed to it under the foregoing provisions of this section—

(a)where it has been given a direction under subsection (3) or (10) above, to submit a restructuring plan;

(b)where it has been given a direction under subsection (5) above, to submit to members the requisite transfer resolutions;

(c)where it has been given a direction under subsection (6) above, to either submit a restructuring plan or submit to members the requisite transfer resolutions;

(d)where it has been given a direction under subsection (7) above, to comply with any requirement imposed by the direction;

(e)where it has been directed under subsection (8) above to carry out a restructuring plan, to secure the purpose of the plan specified in subsection (3)(a) above;

(f)to agree to the requisite transfer resolutions submitted to the members in pursuance of subsection (5) or (6) above; or

(g)where it has agreed to the requisite transfer resolutions, to proceed under section 97 to transfer its business to the successor company,

or if the [F135appropriate authority] rejects a restructuring plan under subsection (8) above, the powers conferred on the [F135appropriate authority] by section 37 shall become exercisable in relation to the society.

F138(14). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(15)In this section—

(16)Nothing in this section implies that it is improper for the [F135appropriate authority] to give to a building society or building societies generally an indication of the action it might or might not take in relation to any proposed activity of theirs.]

[F139(17)The PRA must consult the FCA before issuing a direction under this section.]

Textual Amendments

F134S. 36 and cross-heading substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 13(1), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(k)

F138S. 36(14) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

[F14036A Power to make prohibition orders.U.K.

(1)Where by virtue of section 36(12) the powers conferred by this section become exercisable in relation to a building society, the [F141[F142appropriate authority] may] issue a prohibition order directed to the society.

(2)A prohibition order under this section is an order—

(a)prohibiting, subject to the saving or transitional provisions of the order, the continuance or, as the case may be, the carrying on of the activity specified in the order after a date so specified, either absolutely or unless conditions so specified are complied with; and

(b)requiring, subject to the saving or transitional provisions of the order, the disposal within a period specified in the order of all assets acquired or otherwise in its possession by virtue of the activity.

(3)A disposal of assets in pursuance of a prohibition order shall vest the assets in the transferee but without prejudice to any claim against the society by a person who had an interest in the assets.

(4)The saving or transitional provisions which may be included in a prohibition order shall be such as appear to the [F142appropriate authority] to be just having regard to—

(a)the interests of shareholders of and depositors with the society; and

(b)the interests of other persons who will be affected by the order.

[F143(5)If the [F142appropriate authority] proposes to issue a prohibition order under this section it must give the society a warning notice.

(5A)If the [F142appropriate authority] decides to issue a prohibition order under this section it must give the society a decision notice, and may issue the order at the same time as or after giving the decision notice.

(5B)A warning notice or decision notice about a prohibition order under this section must set out the terms of the order which the [F142appropriate authority] proposes (or has decided) to make, including any saving or transitional provisions to be included in it.

(5C)Part XXVI of the Financial Services and Markets Act 2000 (notices) is to be treated as applying in respect of warning notices and decision notices given under this section as it applies in respect of warning notices and decision notices given under that Act, subject to subsection (5D) below.

(5D)In the application of Part XXVI of that Act in respect of warning notices and decision notices given under this section—

(a)section 388(1)(e) is to be omitted,

(b)section 388(2) (which makes provision for the type of action to which a decision notice may relate if it was preceded by a warning notice) is to be read as if, for the word “Part”, there were substituted the word “ section ”,

(c)section 390 (final notices) is to be omitted, and

(d)for the purposes of section 391 (publication) a decision notice given under this section is to be treated as if it were a final notice rather than a decision notice.]

[F144(5E)The PRA must consult the FCA about the terms of the prohibition order in question before giving a warning notice or a decision notice under this section.]

F145[(6)If the [F142appropriate authority] issues a prohibition order under this section it shall serve the order on the societyF146....]

(7)A prohibition order so F147. . . issued shall, subject to subsection (11) below, take effect on the date specified in the order.

(8)A copy of any order issued under subsection (6) above shall also be served on each director and on the chief executive of the society.

(9)The requirement of subsection (8) above, so far as it relates to directors, is satisfied by serving a copy on each director whose appointment has been officially notified and the non-receipt of a copy by a director or the chief executive does not affect the validity of the order.

[F148(9A)The PRA must give the FCA a copy of any order issued under this section.

(9B)The FCA must keep a copy of any order issued under this section in the public file of the society.]

(10)Subject to subsection (11) below, a prohibition order shall remain in force until revoked by the [F142appropriate authority] .

(11)The [F142appropriate authority] may suspend or revoke a prohibition order so far as it relates to an asset the disposal of which appears to it, on the application of the society, to be impracticable.

(12)If a society contravenes a prohibition order issued against it under this section—

(a)the power conferred on the [F142appropriate authority] by section 37(1) shall become exercisable in relation to the society; and

(b)the [F142appropriate authority] may exercise that power or certify the contravention in writing to the High Court, or do both of those things;

but the contravention shall not invalidate any transaction or other act.

(13)On receiving such a certification, the High Court—

(a)may inquire into the case; and

(b)after hearing any witnesses who may be produced against or on behalf of the society and after hearing any statement which may be offered in defence, may punish the society in like manner as if it had been guilty of contempt of the court.

(14)Where a contravention of a prohibition order which is so certified is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any officer of the society he, as well as the society, may be punished in like manner as if he had been guilty of contempt of the court.

(15)In the application of this section to a building society whose principal office is in Scotland, references to the High Court shall be read as references to the Court of Session.]

Textual Amendments

F140S. 36A inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 14, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(l)

F141Words in s. 36A(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II, para. 142(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F143S. 36A(5)-(5D) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for s. 36A(5) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II, para. 142(c) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F145S. 36A(6) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II, para. 142(d) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F147Words in s. 36A(7) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C65S. 36A(5) extended (1.12.2001) by S.I. 2001/3592, art. 37(1)(b) (with art. 23(2))

[F14937 Powers to petition for winding up etc.U.K.

(1)Where—

(a)by virtue of section 36(13) the powers conferred by this section become exercisable in relation to a building society;

(b)by virtue of section 36A(12) the power conferred by this subsection becomes so exercisable; or

(c)the [F150appropriate authority] has reason to believe that a building society has ceased to comply with the requirement imposed by section 5(1)(a) (purpose or principal purpose),

the [F150appropriate authority] may present a petition to the High Court for the winding up of the society under the applicable winding up legislation; and the power conferred by this subsection is available to the [F150appropriate authority] whether or not it has previously presented a petition.

(2)Where by virtue of section 36(13) the powers conferred by this section become exercisable in relation to a building society, the [F150appropriate authority] may make an application to the High Court for an order giving directions to the society under subsection (3) below; and the power conferred by this subsection is available to the [F150appropriate authority] whether or not it has previously made an application for such an order.

(3)An order under this subsection is an order directing the society to comply with a direction under subsection (3), (5), (6), (7) or (10) of section 36 as directed in the order, or to carry out a restructuring plan as so directed.

[F151(4) Where the High Court makes an order under subsection (3)—

(a)if the appropriate authority is the PRA, it must give a copy of the order to the FCA; and

(b)in any case, the FCA must keep a copy of the order in the public file of the society.]

(5)The High Court shall not make an order winding up the society on an application under subsection (1)(c) above unless it is satisfied that the society has ceased to comply with the requirement imposed by section 5(1)(a).

(6)In the application of this section to a building society whose principal office is in Scotland, references to the High Court shall be read as references to the Court of Session.]

Textual Amendments

F149S. 37 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 15, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(m)

Modifications etc. (not altering text)

Power to determine extent of building society powersU.K.

[F15238 Power to determine building society’s powers.U.K.

(1)The Commission shall have power to determine whether a particular activity of a building society or its subsidiary is or is not within the existing powers of the society and may, if it thinks fit, take such professional advice as it considers it needs to enable it to make the determination.

(2)A determination may be made under this section in relation to an activity which is proposed to be carried on as well as in relation to one which is being carried on.

(3)The powers of the Commission in relation to a building society are exercisable—

(a)on an application made by the society, requesting the Commission to make the determination,

(b)on an application made by the society at the direction of the central office under Part II of Schedule 2 to this Act, or

(c)on the Commission’s own motion or on an application made by the society at its direction,

as provided in subsection (4), (5), (6) or (8) below.

(4)A building society may at any time, on complying with the following provisions of this section, make an application to the Commission for a determination under this section whether an activity specified in the application is or is not within its powers if the directors of the society are of the opinion that there is a doubt about the existence or extent of the powers to carry on the activity which requires to be resolved in the interests of the society.

(5)A building society which has been directed by the central office under Part II of Schedule 2 to this Act to make an application to the Commission under this section shall, in accordance with the direction, make an application to the Commission for a determination whether the activity specified in the application is or is not within its powers.

(6)If it appears to the Commission at any time that a building society or its subsidiary is carrying on or is about to carry on an activity which is or may be outside the existing powers of the society, the Commission may, by notice to the society specifying the activity and its opinion, direct it to make an application for a determination under this section whether the activity is or is not within its powers and it shall be the duty of the society to comply with the direction.

(7)A direction under subsection (6) shall require the application to be made within the period of 21 days beginning with the date on which the notice is given, but the Commission may extend or further extend the period within which the application is to be made.

(8)If a building society fails, within the time allowed by or under subsection (7) above, to make an application as directed under subsection (6) above, the Commission may, of its own motion, proceed to make a determination under this section as if an application had been made by the society.

(9)An application by a building society under subsection (4), (5) or (6) above shall be made in writing, signed by the secretary as such an application, and shall comprise—

(a)a statement of the question for determination, specifying the activity and the powers in question, the nature of the doubt and (except in the case of an application under subsection (6)) the arguments for and against the activity being within those powers, as they appear to the society, and

(b)such documents or draft documents and such other information as are necessary to enable the determination to be made.

(10)The statement of the question for determination may, with the agreement of the Commission, be amended at any time before the determination is made and in that event further documents and other information may be included in the application.

(11)The Commission may, by notice to the society, require a society making an application under subsection (4), (5) or (6) above to amend the statement of the question for determination or to furnish such further documents or other information or such explanations of the statement, documents or information as appear to it to be necessary to enable the determination of the question to be made; and the Commission may allow or require the explanations to be made orally instead of in writing.

(12)In this section and sections 39 and 40—

(a)in a case where the Commission decides to proceed of its own motion, the date when the Commission so decides;

(b)in a case where the society makes the application at the direction of the central office, the date specified in the direction; and

(c)in any other case, the date on which the society makes the application.

(13)Nothing in this section or section 39 or 40 implies that it is improper for the Commission to give to a building society or building societies generally an indication of the action it might or might not take in relation to any proposed activity of theirs; and if any determination comes to be made in relation to the activity the proceedings shall not be liable to be set aside by reason of the indication having been given.]

Textual Amendments

F152Ss. 38-40 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(d), 46(2), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(j)(y)(cc)(v)

[F15339 The determination: notification, effect, appeal.U.K.

(1)A determination of the Commission under section 38 shall be in writing and, as soon as practicable after it is made, the Commission shall notify the society of the determination and the reasons for it.

(2)On receiving notice of the determination the society shall, if it is a determination that the activity in question was outside its powers, forthwith send a copy of it to every person who the society has reason to believe will or may be affected by it other than a person whose only interest is as a shareholder in, or depositor with, the society.

(3)Subject to subsection (4) below, the Commission shall, within the period of one month beginning with the date of the notice to the society under subsection (1) above, publish the determination in such manner as it thinks appropriate.

(4)Where the determination is made on an application made by the society under section 38(4), the Commission may, on the application of the society, postpone the publication of the determination for such period as it thinks fit, not exceeding the period of six months beginning with the date of the notice to the society under subsection (1) above, if it appears to the Commission that it is just to do so.

(5)A determination under section 38 shall bind all persons, whether or not (in the case of an application) they were parties to it and, subject to any appeal under subsection (8) below, shall be final and conclusive for all purposes.

(6)Where the activity in question was at the relevant date being carried on by the society and the determination is that the activity is outside the powers of the society the directors of the society shall be personally liable, jointly and severally, for any loss or expense to the society consequent on the activity’s being outside its powers (including, if a prohibition order under section 40 is made, any loss or expense consequent on the order).

(7)If it appears to the Commission that proceedings under subsection (6) above have not been, but ought in the interests of the society to be, brought, the Commission may bring such proceedings in the name and on behalf of the society; and if it does so the Commission may indemnify the society against the costs or expenses incurred by the society in, or in connection with, proceedings brought by virtue of this subsection.

(8)Any person affected by a determination under section 38 shall be entitled within the period of six weeks beginning with the date of the notice under subsection (1) above or such further period as the Court may allow, to appeal to the High Court against the determination in accordance with rules of court on the ground that it is erroneous in law and the Commission shall be made respondent on the appeal.

(9)On any appeal to the High Court under subsection (8) above the High Court may confirm, reverse or vary the determination appealed from.

(10)In the application of this section to a building society whose principal office is in Scotland, references to the High Court shall be read as references to the Court of Session.

(11)The Commission may, if it thinks fit, require a building society in whose case it has made a determination under section 38 to pay such fee as the Commission directs.]

Textual Amendments

F153Ss. 38-40 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(d), 46(2), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(j)(y)(cc)(v)

[F15440 Power to make prohibition orders.U.K.

(1)On or at any time after making a determination under section 38 that a specified activity is outside the powers of a building society, the Commission shall, if it appears to it—

(a)that the activity is being carried on by the society, or

(b)that the activity has not been but, unless a prohibition order is made under this section, may be carried on by the society.

serve on the society a notice of the Commission’s intention to issue a prohibition order directed to the society.

(2)A prohibition order under this section is an order prohibiting, subject to the saving or transitional provisions of the order, the continuance or, as the case may be, the carrying on of the activity specified in the order, either absolutely or unless conditions specified in the order are complied with, after a date specified in the order and requiring, subject to the saving or transitional provisions of the order, the disposal within a specified period of all assets acquired or otherwise in its possession by virtue of the activity.

(3)A disposal of assets in pursuance of a prohibition order shall vest the assets in the transferee but without prejudice to any claim against the society by a person who had an interest in the assets.

(4)The saving or transitional provisions which may be included in a prohibition order shall be such as appear to the Commission to be just having regard to the interests of shareholders of and the depositors with the society and the interests of other persons who will be affected by the order; but the provisions shall not in any respect suspend the operation of the order beyond the period of one year.

(5)A prohibition order may include a direction for treating assets of any description as assets of the class specified in the direction for the purposes of the requirements of Part III for the structure of commercial assets.

(6)A notice under subsection (1) above of the Commission’s intention to issue a prohibition order shall—

(a)specify the date on which the order is to be issued, being a date not earlier than the end of the period of 21 days beginning with the date of the notice;

(b)specify the terms of the order, including any saving or transitional provisions proposed to be included in it;

(c)inform the society of its right to make representations to the Commission before the order is issued as to the saving or transitional provisions to be included in the order; and

(d)inform the society of its duty under subsection (7) below.

(7)On receiving a notice under subsection (1) above the society shall forthwith send a copy of it to every other person whom it has reason to believe will or may be affected by the determination under section 38 on which the order will be founded.

(8)Any person who may be affected by the determination under section 38 on which the order will be founded may, at any time before the order is made, make representations to the Commission as to the inclusion in it of saving or transitional provisions affecting his interests and they may be made orally or in writing.

(9)After considering any representations made under subsection (8) above the Commission shall make the prohibition order with such saving and transitionalprovisions (if any) as it thinks just, shall issue the order by causing it to be served on the society and shall direct the central office to keep a copy of it in the public file of the society.

(10)A prohibition order so made and issued shall, subject to subsection (15) below, take effect on the date specified in the order.

(11)A copy of any order issued under subsection (9) above shall also be served on each director and on the chief executive of the society.

(12)The requirement of subsection (11) above, so far as it relates to directors, is satisfied by serving a copy on each director whose appointment has been officially notified and the non-receipt of a copy by a director or the chief executive does not affect the validity of the direction.

(13)Subject to subsection (14) below, a prohibition order shall remain in force until revoked by the Commission.

(14)The Commission may suspend or revoke a prohibition order so far as it relates to an asset the disposal of which appears to it, on the application of the society, to be impracticable.

(15)If, when a prohibition order has been made, an appeal is pending before the High Court under section 39(8) against the determination on which the order is founded the High Court may, on application made to it, order that the operation of the prohibition order be stayed until the determination of the appeal; but it shall not do so unless it is satisfied that it is in the public interest that it be stayed.

(16)If a society contravenes a prohibition order issued against it under this section the Commission may certify the contravention in writing to the High Court; and the Court may thereupon inquire into the case and, after hearing any witnesses who may be produced against or on behalf of the society and after hearing any statement which may be offered in defence, may punish the society in like manner as if it had been guilty of contempt of the court.

(17)In the application of this section to a building society whose principal office is in Scotland, references to the High Court shall be read as references to the Court of Session and references to staying shall be read as references to sisting.]

Textual Amendments

F154Ss. 38-40 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 12(1)(d), 46(2), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(j)(y)(cc)(v)

Powers in relation to authorisationU.K.

F15541. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F155S. 41 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4, (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F15642. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F15742A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

[F15842B Power to direct transfers of engagements or business.U.K.

(1)If, with respect to a building society [F159which has a permission under [F160Part 4A] of the Financial Services and Markets Act 2000 to accept deposits, the [F161appropriate authority]] considers it expedient to do so in order to protect the investments of shareholders or depositors, it may either—

(a)direct the society, within a specified period, to transfer all its engagements to one or more other building societies under section 94;

[F162(aa)direct the society, within a specified period, to transfer its business under section 97 to an existing or specially formed company that is a subsidiary of another mutual society by a transfer to which provision made by order under section 3 of the 2007 Act (transfers to subsidiaries of other mutuals) applies;]or

(b)direct the society, within a specified period, to transfer its business [F163under section 97 to an existing company that is not a subsidiary of another mutual society] .

[F164(1A)In this section—

(a)“the 2007 Act” means the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007;

(b)“mutual society” has the same meaning as in section 3 of that Act.]

[F165(2)If it appears to the [F161appropriate authority] that a society has failed to comply with a direction under subsection (1), the [F161appropriate authority] may exercise its power under [F166section 55J (variation or cancellation on initiative of regulator), section 55L (imposition of requirements by FCA) or section 55M (imposition of requirements by PRA)] of the Financial Services and Markets Act 2000 in relation to the society F167....

(2A)Subsection (2) does not affect the [F161appropriate authority] ’s ability to exercise that power, in relation to the society, on any other ground.]

(3)Where the [F161appropriate authority] —

(a)gives a building society a direction under subsection (1)(a) above; or

(b)does not give a building society such a direction solely because the society is already seeking to transfer all its engagements to one or more other building societies under section 94,

the [F161appropriate authority] may, if it considers it expedient to do so in order to protect the investments of shareholders or depositors, direct that, instead of resolving to transfer its engagements by the two resolutions required by section 94(2) (with or without the additional resolution required by section 94(3)), the society may resolve to do so by a resolution of the board of directors.

(4)Where the [F161appropriate authority] —

(a)gives a building society a direction under subsection [F168(1)(aa) or (b) ] above; or

(b)does not give a building society such a direction solely because the society is already seeking to transfer its business to an existing company [F169, or to a specially formed company that is a subsidiary of another mutual society,] under section 97,

the [F161appropriate authority] may, if it considers it expedient to do so in order to protect the investments of shareholders or depositors, direct that, instead of approving the transfer and the terms of the transfer by the two resolutions required by section 97(4)(c), the society may approve the transfer and those terms by a resolution of the board of directors.

(5)A direction under subsection (3) or (4) above—

(a)shall be in writing;

(b)may be given subject to such limitations or conditions as the [F161appropriate authority] may think fit; and

(c)unless renewed by a further direction, shall cease to have effect at the end of the period of 90 days beginning with the day on which it is given.

[F170(5A)The PRA must consult the FCA before giving a direction under this section.]

F171(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)In Schedule 8A to this Act—

(a)Part I (which contains provisions modifying sections 94 to 96 and Schedule 16 to this Act) shall apply where a direction is given under subsection (3) above; and

(b)Part II (which contains provisions modifying sections 97 to 100 and Schedule 17 to this Act) shall apply where a direction is given under subsection (4) above.

(8)The [F172Treasury] may make regulations for the purpose of specifying, as prescribed matters—

(a)the matters of which statements under paragraph 3 of Schedule 8A to this Act are to give particulars; and

(b)the matters of which statements under paragraph 9 of that Schedule are to give particulars.

(9)The power to make regulations under this section is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F158S. 42B inserted (9.6.1997) by 1997 c. 32, s. 17(1); S.I. 1997/1427, art. 2(c)

F159Words in s. 42B(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 145(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F163Words in s. 42B(1)(b) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 56(2)(b), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F165S. 42B(2)(2A) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for s. 42B(2) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II, para. 145(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F168Words in s. 42B(4)(a) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 56(4)(a), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F169Words in s. 42B(4)(b) inserted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 56(4)(b), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F171S. 42B(6) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F172Word in s. 42B(8) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 145(e) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C68S. 42B(8): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(1)

[F17442C[F173Variation and revocation of transfer directions]U.K.

(1)A direction under section 42B(1) F175. . . may be varied by a further direction; and a direction may be revoked by the [F176appropriate authority] by a notice in writing to the building society concerned.

[F177(1A)If the appropriate authority is the PRA, it must consult the FCA before varying or revoking a direction.]

F178(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F178(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F173Side-note to s. 42C substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 2, 8, 13(1), Sch. 3 Pt. II para. 146(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F174S. 42C inserted (9.6.1997) by 1997 c. 32, s. 18; S.I. 1997/1427, art. 2(c)

F175Words in s. 42C(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F178S. 42C(2)(3) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F17943. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F179Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3) Sch. 5); S.I. 2001/3538, art. 2(1)

Ss. 43-45A continued (1.12.2001) by S.I. 2001/2657, art. 11 (which was revoked (8.10.2001) by S.I. 2001/3083, arts. 1(2), 23(1))

Ss. 43-45A continued (with modifications) (1.12.2001) by S.I. 2001/3083, arts. 1(2), 11; S.I. 2001/3538, art. 2(1)

F18043A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F180Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Ss. 43-45A continued (1.12.2001) by S.I. 2001/2657, art. 11 (which was revoked (8.10.2001) by S.I. 2001/3083, art. 23(1))

Ss. 43-45A continued (1.12.2001) by S.I. 2001/3083, arts. 1(2), 11; S.I. 2001/3538, art. 2(1)

F18143B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F181Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Ss. 43-45A continued (1.12.2001) by S.I. 2001/2657, art. 11 (which was revoked (8.10.2001) by S.I. 2001/3083, art. 23(1))

Ss. 43-45A continued (1.12.2001) by S.I. 2001/3083, arts. 1(2), 11; S.I. 2001/3538, art. 2(1)

F18244. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F182Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F18345. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F183Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F184General functions of Commission]U.K.

Textual Amendments

F184S. 45AA and cross-heading inserted (1.12.1997) by 1997 c. 32, s. 22; S.I. 1997/2668, art. 2, Sch. Pt. I(d)

F18545AA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F185Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F18645A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F186Ss. 43-45A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F187Notices, hearings and appeals]U.K.

Textual Amendments

F187S. 46A and cross-heading substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 46-49 and cross-heading by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 148 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F18846A Notices, hearings and appeals.U.K.

(1)If the [F189appropriate authority] proposes—

(a)to give a direction to a society under section 36(3), (5), (6), (7) or (10), or

(b)to give a direction to a society under section 42B(1), other than a direction varying a previous direction with the agreement of the society concerned,

it must give the society a warning notice.

(2)The warning notice must set out the terms of the direction which the [F189appropriate authority] proposes to give.

(3)If the [F189appropriate authority] decides—

(a)to give a direction to a society under section 36(3), (5), (6), (7) or (10), or

(b)to give a direction to a society under section 42B(1), other than a direction varying a previous direction with the agreement of the society concerned,

it must give the society a decision notice.

(4)The decision notice must set out the terms of the direction which the [F189appropriate authority] has decided to give.

(5)A society to whom a decision notice is given under this section may refer the matter to the [F190Upper Tribunal].

(6)Part XXVI of the Financial Services and Markets Act 2000 (notices) is to be treated as applying in respect of warning notices and decision notices given under this section as it applies in respect of warning notices and decision notices given under that Act, subject to subsection (8) below.

F191(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)In the application of Part XXVI of that Act in respect of warning notices and decision notices given under this section—

(a)section 388(1)(e)(i) (which requires a decision notice to indicate any right given under that Act to refer a decision to the Tribunal) is to be read as if, for the words “this Act”, there were substituted “ the Building Societies Act 1986 ”;

(b)section 388(2) (which makes provision for the type of action which may be proposed in a decision notice which was preceded by a warning notice) is to be read as if, for the word “Part”, there were substituted “ section ”;

(c)section 390(4) (which provides for the content of a final notice about an order) is to be read as if—

(i)for the words “an order” there were substituted “ a direction ”, and

(ii)for the words “the order”, in both places where they appear, there were substituted “ the direction ”; and

(d)section 392 (application of sections 393 (third party rights) and 394 (access to [F189appropriate authority] material)) is to be read—

(i)as if paragraph (a) of that section contained a reference to a warning notice given under subsection (1) above, and

(ii)as if paragraph (b) of that section contained a reference to a decision notice given under subsection (3) above.]

Textual Amendments

F188S. 46A substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) for ss. 46-49 by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 148 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C69S. 46A(1) extended (1.12.2001) by S.I. 2001/3592, arts. 36(2), 38(1) (with art. 23(2))

C70S. 46A(8)(d)(i) excluded (1.12.2001) by S.I. 2001/3592, arts. 36(3), 38(2) (with art. 23(2))

[F19246. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F19447. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F19948. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F20149. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Advertising etc.U.K.

F20250. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F202S. 50 repealed (1.12.2001) by S.I. 2001/2617, arts. 2, 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F20351 Powers to avoid apparent association with other bodies.U.K.

(1)If, as regards a building society and another body corporate which is not an associated body by virtue of section 18, it appears to the Commission that persons who might invest in or otherwise deal with that other body may be misled into believing that there is such a business relationship between the society and that body as indicates that the society has assumed an obligation to discharge that body’s liabilities in any event, the Commission may give the society a direction under subsection (2) below.

(2)A direction under this subsection is a direction requiring the society—

(a)if they are available to it, to assume and make exercisable, or to make exercisable, as regards a body specified in the direction, the powers conferred by section 18; or

(b)to take such steps as are agreed with the Commission for the purpose of removing the appearance of a business relationship with the specified body which indicates the assumption of an obligation of the description referred to in subsection (1) above;

and, within a specified period, to notify the Commission of the course it has decided to take.

(3)The steps that a building society may be required to take for the purpose of complying with a direction under subsection (2) above may relate to the conduct of its business or to its business relationship (if any) with the other body and, in particular, may require the removal of any person from any office in the society or that body.

(4)A direction under subsection (2) above shall—

(a)specify the matters which appear to the Commission to be capable of giving rise to such a belief as is mentioned in subsection (1) above;

(b)specify the period within which the society must comply with the direction;

(c)require the society, if it decides to comply with the direction by taking steps to secure the purpose mentioned in subsection (2)(b) above, to notify the Commission of the steps it proposes to take.

(5)Where a building society, in pursuance of subsection (2)(b) above notifies the Commission of steps which it proposes to take to secure the purpose mentioned in that paragraph then—

(a)if it appears to the Commission that the steps proposed are reasonably likely to secure that purpose, the Commission shall approve them and direct the society to carry them out;

(b)if it appears to the Commission that the steps proposed are, with modifications, likely to secure that purpose and the Commission and the society agree on appropriate modifications within the period of 21 days from the date on which the Commission notifies the society of the modifications it proposes for their agreement, the Commission shall approve the steps as modified and direct the society to carry them out;

but otherwise the Commission shall reject the society’s proposals.

(6)If the Commission rejects a society’s proposals under subsection (5) above the Commission shall direct the society, within a specified period, to take the steps specified in the direction.

(7)Any direction under subsection (2), (5) or (6) above shall be given by the Commission by notice served on the society.

(8)The Commission may, if it thinks fit, extend, or further extend, any period during which a building society is to take any steps required of it under any of the foregoing provisions of this section and may do so whether or not application is made to it before the expiry of the period in question.

(9)If a building society fails, within the period allowed to it under the foregoing provisions of this section, to comply with a direction under subsection (2) or (6) above, the Commission may serve on the society an aggregation notice to take effect on such date as is specified in the notice.

(10)An aggregation notice under subsection (9) above is a notice directing that, from the date specified in the notice until the notice is withdrawn by the Commission, the assets and liabilities of the body specified in the notice will be aggregated with those of the society for the purposes of the provisions of this Act requiring aggregation of assets or liabilities; and where such a notice is served, and whilst it remains in force, the assets and liabilities of the body specified in the notice shall for the purposes of those provisions be aggregated with those of the society in accordance with the aggregation rules in force under sections 7(10), 8(3) and 20(9).

(11)A copy of any aggregation notice served on a building society under subsection (9) above shall, whilst in force, be kept in the public file of the society.

(12)In this section—

and “the provisions of this Act requiring aggregation of assets or liabilities” are sections 7, 8 and 20.]

Textual Amendments

F203S. 51 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 16, Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(vii)(cc)(vi)

InformationU.K.

52 Powers to obtain information and documents etc.U.K.

(1)This section applies to information, documents or other material, or explanations of matters, which relate to the business of a building society or its plans for future development and, in relation to the obtaining under this section of information or explanations or the production under this section of documents or other material to which it applies “the purposes of its supervisory functions” means the purposes of the discharge by the [F204[F205FCA or the PRA of any of their respective functions] under Part I, sections 36, 36A, 37, 42B, 42C and 46A, Part X and section 107.]

(2)Where a building society has [F206connected undertakings] this section also applies to information, documents or other material, or explanations of matters, which relate to, or also relate to, the business, or the plans for future development, of every such [F207connected undertaking].

[F208(3)Where the Commission has grounds under section 51(1) for giving a direction to a building society under subsection (2) of that section in relation to another body corporate this section also applies to information, documents or other material, or explanations of matters, which relate to the business of that other body.]

(4)This section does not authorise any requirement in relation to information, documents or other material to be imposed on a [F209connected undertaking of] a building society unless [F210that undertaking] carries on business in the United Kingdom; but a requirement may be imposed under this section on a building society in relation to information, documents or other material in the possession or control of a [F211connected undertaking] outside the United Kingdom.

(5)Subject to subsection (4) above, the [F212FCA and the PRA] may by notice to a building society, [F213or connected undertaking]—

(a)require [F214the society or undertaking] to which it is addressed to furnish to it, within a specified period or at a specified time or times, such specified information as the [F215it] considers it needs for the purposes of its supervisory functions;

(b)require [F214the society or undertaking] to which it is addressed to produce to it, at a specified time and place, such specified documents or other material as the [F215it] considers it needs for the purposes of its supervisory functions;

(c)require [F214the society or undertaking] to which it is addressed to provide to it, within specified period, such explanations of specified matters as the [F215it] considers it needs for the purposes of its supervisory functions;

(d)require [F214the society or undertaking] to which it is addressed to furnish to it a report by an [F216approved accountant or other person with relevant professional skill] on, or on specified aspects of, information or documents or other material furnished or produced to the [F215it] .

[F217(5A)Subject to subsection (4) above, [F218any person authorised for the purpose by the [F219FCA or the PRA] (“an authorised officer”) may, on producing evidence of his authority,] require a building society or connected undertaking—

(a)to furnish to him forthwith such specified information as the [F220body which authorised the person] considers it needs for the purposes of its supervisory functions;

(b)to produce to him forthwith such documents or other material as the [F220body which authorised the person] considers it needs for those purposes;

(c)to provide to him forthwith such explanations of specified matters as the [F220body which authorised the person] considers it needs for those purposes.

(6)Where by virtue of subsection (5)(a) to (c) above the [F221FCA or the PRA has power] , or by virtue of subsection (5A) above an authorised [F222officer] has power, to require the furnishing of any information, the production of any document or material or the provision of any explanation, by a building society or connected undertaking, the [F223FCA, the PRA or the authorised officer (as the case may be)] shall have the like power as regards any person who—

(a)is or has been an officer or employee or agent of the society or undertaking; or

(b)in the case of documents or material, appears to the [F223FCA, the PRA or the authorised officer (as the case may be)] to have the document or material in his possession or under his control.]

(7)Where any person from whom production of a document or material is required under subsection (6) above claims a lien on the document or material, the production of it shall be without prejudice to the lien.

(8)Nothing in the foregoing provisions of this section shall compel the production by a [F224relevant lawyer] of a document or material containing a privileged communication made by him or to him in that capacity or the furnishing of information contained in a privileged communication so made.

[F225(9)Where, by virtue of subsection (5), (5A) or (6) above, the [F226FCA, the PRA or an authorised officer] requires the production by a building society or connected undertaking or any other person of documents or material, the [F227FCA, the PRA or the authorised officer (as the case may be)] may—

(a)if the documents or material are produced, take copies of or extracts from them and require the person who produced them, or any other person who is a present or past director or officer of, or is or was at any time employed by, the building society or connected undertaking concerned, to provide an explanation of the documents or material; and

(b)if the documents or material are not produced, require the person who was required to produce the documents or material to state, to the best of his knowledge and belief, where the documents or material are.]

(10)Any person who, when required to do so under this section, fails without reasonable excuse to furnish any information or accountant’s report, to produce any documents or material, or to provide any explanation or make any statement, shall be liable on summary conviction—

(a)to a fine not exceeding level 5 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues.

(11)Any building society which furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular shall be liable, on conviction on indictment or on summary conviction, to a fine which, on summary conviction, shall not exceed the statutory maximum.

(12)Any person who knowingly or recklessly furnishes any information, provides any explanation or makes any statement which is false or misleading in a material particular shall be liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

[F228(13)In this section—

Textual Amendments

F204Words in s. 52(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) for s. 52(1)(a)(b) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 para. 150(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F206Words in s. 52(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F207Words in s. 52(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(2)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F208S. 52(3) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 17(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)(cc)(vii)

F209Words in s. 52(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(4)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F210Words in s. 52(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(4)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F211Words in s. 52(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(4)(c); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F213Words in s. 52(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(5)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F214Words in s. 52(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 17(5)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(viii)

F216Words in s. 52(5)(d) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 17(5)(c); S.I. 1997/1427, art. 2(k)(n)(iii)

F217S. 52(5A)(6) substituted for s. 52(6) (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 17(6); S.I. 1997/1427, art. 2(k)(n)(iii)

F218Words in s. 52(5A) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 150(c)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F222Word in s. 52(6) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 150(d)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F23152B Entry of premises under warrant under section 176 of the Financial Services and Markets Act 2000.U.K.

(1)A justice of the peace may issue a warrant under section 176 of the Financial Services and Markets Act 2000 if satisfied on information on oath given by or on behalf of the [F232FCA or the PRA] , an authorised officer within the meaning of section 52(5A) above, or a person appointed as an investigator under section 55(1) below or as an inspector under section 56(1) below, that there are reasonable grounds for believing that the first or second set of conditions below is satisfied.

(2)The first set of conditions is that—

(a)there are on the premises specified in the warrant information, documents or other material in relation to which a requirement has been imposed on any person under section 52(5), (5A) or (6) above or section 57(3) below, or which it is the duty of any person to produce under section 55(3) or 57(2) below, and

(b)that person has failed (wholly or in part) to comply with the requirement or, having been requested to do so, has failed (wholly or in part) to comply with that duty.

(3)The second set of conditions is that—

(a)there are on the premises specified in the warrant information, documents or other material in relation to which a requirement could be imposed on any person under section 52(5), (5A) or (6) above or section 57(3) below, or which any person could be requested to produce in compliance with the duty imposed on them by section 55(3) or 57(2) below, and

(b)if such a requirement were imposed, or such a request made,—

(i)it would not be complied with, or

(ii)any information, documents or other material to which it related would be removed, tampered with or destroyed.]

Textual Amendments

F231S. 52B substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) for s. 52A by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 151 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F23353A Disclosure of information.U.K.

(1)For the purposes of sections 348 to 353 of the Financial Services and Markets Act 2000 (restrictions on disclosure of confidential information)—

(a)information to which this section applies is to be treated as confidential information; and

(b)in relation to such information, each of the following is a primary recipient—

[F234(i)the FCA;

(ia)the PRA;]

(ii)any person who is or has been employed by the [F235FCA or the PRA] ; and

(iii)any person appointed by the [F235FCA or the PRA] to carry out functions under this Act.

(2)This section applies to information which—

(a)relates to—

(i)the business or other affairs of a building society or other body, or its or their plans for future development; or

(ii)any person who is or has been, or has been appointed (or, in the case of a director, nominated or proposed as), an officer of a building society or other body;

(b)was received by a primary recipient (within the meaning of subsection (1)(b)) for the purposes of, or in the discharge of, any functions of the [F236FCA or the PRA] under any provision made by or under this Act; and

(c)is not excluded information by virtue of subsection (4).

(3)It is immaterial for the purposes of subsection (2) whether or not the information was received—

(a)by virtue of a requirement to provide it imposed by or under this Act;

(b)for other purposes as well as purposes mentioned in that subsection.

(4)Information is excluded information if—

(a)it has been made available to the public by virtue of being disclosed in any circumstances in which, or for any purposes for which, disclosure is not precluded by section 348 of the Financial Services and Markets Act 2000; or

(b)it is in the form of a summary or collection of information so framed that it is not possible to ascertain from it information relating to any particular person.]

Textual Amendments

F233S. 53A substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) for s. 53 by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 152 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F234S. 53A(1)(b)(i)(ia) substituted for s. 53A(1)(b)(i) (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 8 para. 18(2) (with Sch. 12)

Modifications etc. (not altering text)

C85S. 53A(1) restricted (temp. from 3.9.2001 until 30.11.2001) by S.I. 2001/2966, art. 6

54Information disclosed to [F237FCA or PRA] from other sources.U.K.

(1)If and in so far as it appears to the Secretary of State that the disclosure of any information will enable the [F238FCA or the PRA] better to discharge its functions under this Act (but not otherwise),—

(a)information obtained by the Secretary of State under section 447 or 448 of the M13Companies Act 1985 (inspection of companies’ books and papers) may be disclosed to the [F238FCA or the PRA] or further disclosed, notwithstanding the provision as to security of information contained in section 449 or that Act; and

(b)where the information is contained in a report made by inspectors appointed under section 431, 432 [F239or 442] of the Companies Act 1985 (investigation of affairs or ownership of companies and certain other bodies corporate) the Secretary of State may furnish a copy of the report to the [F238FCA or the PRA] .

F240(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F241(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F241(3A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F241(3B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F241(3C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F242(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F242(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F241(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F241S. 54(3)-(6) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

Marginal Citations

Inspections, etcU.K.

55Investigations on behalf of [F243FCA or PRA] .U.K.

(1)If it appears to [F244the FCA or the PRA] desirable to do so for the purposes of its supervisory functions in relation to a building society, [F245it] may appoint one or more competent persons to investigate and report to it on the state and conduct of the business of the society concerned, or any particular aspect of that business.

(2)If a person appointed under subsection (1) above thinks it necessary for the purposes of his investigation, he may also investigate the business of any body corporate which is or has at any relevant time been [F246a connected undertaking of the building society under investigation]

(3)It shall be the duty of every officer, employee and agent of a building society or other body which is under investigation—

(a)to produce to the persons appointed under subsection (1) above all records, books and papers relating to the body concerned which are in his custody or power; and

(b)to attend before those persons when required to do so; and

(c)otherwise to give to those persons all assistance in connection with the investigation which he is reasonably able to give.

(4)Any officer, employee or agent of a building society or other body who—

(a)without reasonable excuse fails to produce any records, books or papers which it is his duty to produce under subsection (3) above, or

(b)without reasonable excuse fails to attend before the person appointed under subsection (1) above when required to do so, or

(c)without reasonable excuse fails to answer any question which is put to him by persons so appointed with respect to any building society or other body corporate which is under investigation,

shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(5)Any officer, employee or agent of a building society or other body who knowingly or recklessly furnishes to any person appointed under subsection (1) above any information which is false or misleading in a material particular, shall be liable—

(a)on conviction on indictment to imprisonment for a term not exceeding two years or to a fine or both; and

(b)on summary conviction to a fine not exceeding the statutory maximum.

(6)In this section—

(a)“agent”, in relation to a building society or other body whose business is under investigation, includes its bankers, its accountants and solictors and any persons, where they are not officers of the other body concerned, who are employed as its auditors;

(b)“the purposes of its supervisory functions”, in relation to the [F247FCA or the PRA] , has the same meaning as in section 52; and

(c)any reference to an officer, employee or agent of a building society or other body includes a reference to a person who has been but no longer is an officer, employee or agent of that society or other body.

Textual Amendments

F246Words in s. 55(2) substituted for s. 55(2)(a)(b) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 21; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(x)

Modifications etc. (not altering text)

C87S. 55 extended (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 para. 13(1); S.I. 2002/2711, art. 2 (subject to arts. 3-5)

S. 55 extended (prosp.) by S.I. 2002/3152, arts. 1(2)(3), 4, Sch. 2 para. 13(1)

C89S. 55(6)(a) amended (E.W.) (1.1.1992) by S.I. 1991/2684, arts. 2(1), 4, Sch. 1

56 Inspections and special meetings: general.U.K.

(1)In the circumstances mentioned in subsection (2) below, the [F248FCA and the PRA] —

(a)may appoint one or more competent inspectors to investigate and report on the affairs of a building society, or

(b)may call a special meeting of a building society to consider its affairs, or

(c)may (either on the same or on different occasions) both appoint an inspector or inspectors and call a special meeting for those purposes;

and, in the circumstances mentioned in subsection (3) below, the investigation or consideration may extend to the affairs of any body corporate which is or at any relevant time has been a [F249connected undertaking of] the building society.

[F250(1A)The FCA must consult the PRA before exercising the power in subsection (1).

(1B)The PRA must consult the FCA before exercising the power in subsection (1).]

(2)The powers conferred by subsection (1) above may be exercised either—

(a)on the application of the requisite number of members of the society, or

(b)where no such application is made but the [F251FCA or the PRA (as the case may be)] is of opinion that an investigation should be held into the affairs of the society, or that the affairs of the society call for consideration by a meeting of its members.

(3)The powers conferred by subsection (1) above may be exercised in relation also to a [F252connected undertaking of] a building society either—

(a)where the application referred to in subsection (2)(a) above so requests, or

(b)where the application contains no such request but the [F251FCA or the PRA (as the case may be)] is of the opinion that it is necessary for the purposes of the investigation into or consideration of the affairs of the building society that the affairs of the [F253connected undertaking] should also be investigated or considered.

(4)Where the inspectors are of the opinion mentioned in subsection (3)(b) above in relation to a [F252connected undertaking of] a building society they may, with the consent of the [F254body exercising its powers under subsection (1)] , extend their investigation to the affairs of the [F253connected undertaking] and make their report accordingly.

(5)For the purposes of subsections (1) to (3) above the requisite number of members—

(a)in the case of a building society having more than 1,000 members, is 100, and

(b)in the case of any other building society, is one-tenth of the whole number of members of the society.

(6)The following provisions shall have effect where an application is made as mentioned in subsection (2)(a) above, that is to say—

(a)the application shall be supported by such evidence as the [F255body to which the application was made] may require for the purpose of showing that the applicants have good reason for requiring an investigation by inspectors or consideration by a special meeting, as the case may be, and that the applicants are not actuated by malicious, frivolous, vexatious or scandalous motives in their application;

(b)such notice of the application shall be given to the building society and, in a case where the investigation is to extend to its affairs also, to the society’s [F256connected undertaking], as the [F255body to which the application was made] may direct;

(c)the [F255body to which the application was made] shall require the applicants to give security for payment of the costs of the investigation or meeting before the inspector is appointed or the meeting is called subject, in the case of the costs of an investigation, to an amount not exceeding the corresponding Companies Act limit; and

(d)as regards the expenses of or incidental to the investigation or meeting—

(i)in the case of an investigation (in whichever way instituted), the expenses shall be defrayed in the first instance by the [F255body to which the application was made] but without prejudice to its rights to contribution under section 57(10);

(ii)in the case of a meeting, the expenses shall be defrayed by the applicants, or out of the funds of the society, or by the members or officers or former members or officers of the society, in such proportions as the [F255body to which the application was made] may direct.

(7)[F257Before the FCA or the PRA exercises] its powers under subsection (1) above in a case falling within subsection (2)(b) above, [F258it] shall inform the building society of the action which it proposes to take and the grounds for that action, and the society shall, within 14 days of receiving the information, be entitled to give [F259the body exercising its powers under subsection (1)] an explanatory statement in writing by way of a reply.

(8)Where the [F260FCA or the PRA] proposes to exercise its powers under subsection (1) above in a case falling within subsection (3)(b) above, subsection (7) above shall apply in relation to the [F256connected undertaking] as it applies in relation to the society.

(9)Inspectors appointed under this section shall, in addition to having the powers which are necessary for or incidental to the discharge of their functions under this section, have the powers specified in section 57.

(10)Where a special meeting is called under this section—

(a)the [F261body exercising its powers under subsection (1)] may direct at what time and place the meeting is to be held, and what matters are to be discussed and determined at the meeting, and may give such other directions as it thinks fit with respect to the calling, holding and conduct of the meeting;

(b)the [F261body exercising its powers under subsection (1)] may appoint a person to be chairman at the meeting or, in default of such an appointment, the meeting may appoint its own chairman;

(c)the meeting shall have all the powers of a meeting called according to the rules of the building society;

and the provisions of this subsection and any direction given under it shall have effect notwithstanding anything in the rules of the building society.

(11)In this section “the corresponding Companies Act limit”, in relation to security for the payment of the costs of an investigation, is £5,000 or such other sum as is specified for the time being in an order under section 431(4) of the M14Companies Act 1985 for the purposes of that section.

Textual Amendments

F249Words in s. 56(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 22(1); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xi)

F252Words in s. 56(3)(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 22(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xi)

F253Words in s. 56(3)(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 22(2)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xi)

F256Words in s. 56(6)(8) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 22(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xi)

Marginal Citations

57 Inspections: supplementary provisions.U.K.

(1)In this section—

and references to officers or to agents include past, as well as present, officers or agents (as the case may be) and “agents”, in relation to a building society or any [F262connected undertaking of] a building society, includes its bankers, its accountants and solicitors and its auditors.

(2)When the inspectors have been appointed it is the duty of all officers and agents of the body under investigation—

(a)to produce to the inspectors all documents and material of or relating to the body under investigation which are in their custody or power;

(b)to attend before the inspectors when required to do so, and

(c)otherwise to give the inspectors all assistance in connection with the investigation which they are reasonably able to give.

(3)If the inspectors consider that a person other than an officer or agent of the body under investigation is or may be in possession of information concerning its affairs, they may require that person to produce to them any documents or material in his custody or power relating to the body under investigation, to attend before them and otherwise to give them all assistance in connection with the investigation which he is reasonably able to give; and it is that person’s duty to comply with the requirement.

(4)The inspectors may examine on oath the officers and agents of the body under investigation, and any such person as is mentioned in subsection (3) above, in relation to the affairs of the body under investigation, and may administer an oath accordingly.

(5)An answer given by a person to a question put to him under the foregoing provisions of this section may be used in evidence against him.

[F264(5A)However, in criminal proceedings in which that person is charged with an offence to which this subsection applies—

(a)no evidence relating to the answer may be adduced, and

(b)no question relating to it may be asked,

by or on behalf of the prosecution, unless evidence relating to it is adduced, or a question relating to it is asked, in the proceedings by or on behalf of that person.

(5B)Subsection (5A) above applies to any offence other than—

(a)an offence under section 2 or 5 of the Perjury Act 1911 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath);

(b)an offence under section 44(1) or (2) of the Criminal Law (Consolidation) (Scotland) Act 1995 (false statements made on oath or otherwise than on oath); or

(c)an offence under Article 7 or 10 of the M15Perjury (Northern Ireland) Order 1979 (false statements made on oath otherwise than in judicial proceedings or made otherwise than on oath).]

(6)If an officer or agent of the body under investigation or any such person as is mentioned in subsection (3) above—

(a)refuses to produce any document or material which it is his duty under this section to produce, or

(b)refuses to attend before the inspectors when required to do so, or

(c)refuses to answer any question put to him by the inspectors with respect to the affairs of the body under investigation,

the inspectors may certify the refusal in writing to the High Court; and the court may thereupon inquire into the case and, after hearing any witnesses who may be produced against or on behalf of the alleged offender and after hearing any statement which may be offered in defence, may punish the offender in like manner as if he had been guilty of contempt of the court.

(7)The inspectors may, and if so directed by the [F265body which appointed the inspectors] shall, make interim reports to the [F265body which appointed the inspectors] , but they may at any time in the course of the investigation, without making an interim report, inform the [F265body which appointed the inspectors] of matters coming to their knowledge as a result of the investigation tending to show that an offence has been committed.

(8)The [F266body which appointed the inspectors] may, if it thinks fit—

(a)send a copy of any report made by the inspectors to the body whose affairs are or were the subject of the investigation;

(b)furnish a copy of any such report on request F267. . . to—

(i)any member of the body whose affairs are or were the subject of the investigation;

(ii)the auditors of that body;

(iii)any person whose conduct is referred to in the report;

(iv)any other person whose financial interests appear to the [F266body which appointed the inspectors] to be affected by matters dealt with in the report, whether as creditor or otherwise; and

(c)cause the report to be printed and published.

[F268(8A)The [F269body which appointed the inspectors] may charge a reasonable fee for furnishing to any person a copy of a report under subsection (8)(b) above.]

(9)A copy of a report of inspectors appointed under section 56 to hold an investigation under that section, certified by the [F270body which appointed the inspectors] to be a true copy, is admissable in any legal proceedings as evidence of the opinion of the inspectors in relation to any matter contained in the report; and a document purporting to be such a certificate shall be received in evidence and be deemed to be such a certificate, unless the contrary is proved.

(10)The [F271body which appointed the inspectors] shall be entitled to be repaid the expenses of the investigation defrayed by it under section 56(6)(d) as provided in the following paragraphs, that is to say—

(a)by the applicants for the investigation, to such extent (if any) as the [F271body which appointed the inspectors] may direct;

(c)by any person convicted of an offence in proceedings instituted as a result of the investigation, to such extent (if any) as the court by or before which he was convicted may order;

and a person liable under any one of paragraphs (a) to (c) above is entitled to contribution from any other person liable under the same paragraph, according to the amount of their respective liabilities under it.

(11)In the application of this section to a building society whose principal office is in Scotland, any reference to the High Court shall be read as a reference to the Court of Session.

Textual Amendments

F262Words in s. 57(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 23; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xii)

F264S. 57(5A)(5B) inserted (14.4.2000 (E.W.N.I.) and 1.1.2001 (S.)) by 1999 c. 23, ss. 59, 68(3)(4), Sch. 3 para. 9 (with Sch. 7 paras. 3(3), 5(2)); S.I. 2000/1034, art. 2(a)(3); S.S.I. 2000/445, art. 2

F267Words in s. 57(8)(b) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 8, 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F268S. 57(8A) inserted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 155(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C90S. 57(1) amended (E.W.) (1.1.1992) by S.I. 1991/2684, arts. 2(1), 4, Sch. 1

C91S. 57(5)(5A)(5B) extended (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 para. 13(2); S.I. 2002/2711, art. 2 (subject to arts. 3-5)

S. 57(5)(5A)(5B) extended (prosp.) by S.I. 2002/3152, arts. 1(2)(3), 4, Sch. 2 para. 13(2)

Marginal Citations

Part VIIU.K. Management of Building Societies

Directors and other officersU.K.

58 Directors: number.U.K.

(1)Every building society shall have at at least two directors.

(2)One of the directors shall be appointed to be chairman of the board of directors.

59 Chief executive and secretary.U.K.

(1)Every building society shall have a chief executive, that is to say, a person who is employed by the society and who either alone or jointly with one or more other persons, is or will be responsible under the immediate authority of the directors for the conduct of the business of the society.

(2)Every building society shall have a secretary.

(3)The offices of chief executive and secretary of a building society may be held by the same person.

(4)The chief executive and the secretary of a building society shall be appointed by the directors of the society.

(5)The directors of a building society shall, as regards the appointment of the secretary or the chief executive of the society, take all reasonable steps to secure that the person appointed is a person who has the requisite knowledge and experience to discharge the functions of his office.

(6)Where a person becomes or ceases to be the chief executive of a building society, the society shall within one month give notice of that fact to the [F272FCA] , stating the person’s full name and address and the date on which he became, or ceased to be, chief executive; and the [F272FCA] shall record the person’s name and the date on which he began to hold, or, as the case may be, ceased to hold office, in the public file of the society.

(7)Anything required or authorised to be done by or to the secretary or chief executive of a building society may, if the office is vacant or there is for any other reason no secretary or chief executive capable of acting, be done by or to any assistant or deputy secretary or assistant or deputy chief executive, as the case may be, or, if there is no assistant or deputy capable of acting, by or to any officer of the society authorised generally or specially for that purpose by the directors.

Textual Amendments

60 Directors: elections and retirements.U.K.

(1)Except in so far as they may be co-opted by virtue of subsection (13) below, the directors of a building society must be elected to office, either—

[F273(a)on a poll taken at the annual general meeting of the society, or]

(b)by postal [F274or electronic] ballot of the members conducted during that part of the financial year of the society which precedes the date on which the annual general meeting is held,

as the rules provide.

[F275(1A)Where directors of a building society are to be elected to office on a poll taken at the annual general meeting of the society, a form for the appointment of a proxy shall be sent to each person entitled to notice of the meeting.]

(2)The persons entitled to vote in an election of directors of a building society are those members of the society who, on the voting date, are entitled to vote on an ordinary resolution of the society.

[F276(3)Where, in the case of an election of directors of a building society, there are more candidates than vacancies to be filled by the election, a person entitled to vote in the election—

(a)shall have one vote in respect of every vacancy, but

(b)cannot be required to cast all or any of his votes.

(3A)Where, in the case of an election of directors of a building society, there are not more candidates than vacancies to be filled by the election—

(a)a person entitled to vote in the election shall have one vote in respect of every candidate, but cannot be required to cast all or any of his votes;

(b)each vote shall be capable of being cast either for or against the candidate concerned; and

(c)a candidate shall be elected if, and only if, more votes are cast for him than against him.]

(4)Subject to subsections [F277(4A),] (6), (7) and (9) below and to paragraph 5(3) of Schedule 2 to this Act, [F278any natural person] is eligible to be elected a director of a building society.

[F279(4A)A person in relation to whom there is in force a prohibition order made under section 56(2) of the Financial Services and Markets Act 2000 shall not be eligible to be elected as a director of a building society.]

(5)The rules of a building society may require its directors to retire at a prescribed age without eligibility for re-election or reappointment; and, if the age so prescribed is no greater than the age which is the normal retirement age for the purposes of this section, subsection (7) below shall have no application to the directors of the society.

(6)If the rules of a building society make the provision authorised by subsection (5) above, a person who has attained the age so prescribed shall not be eligible to be elected as a director of the society.

(7)Except in a case where the operation of this subsection is excluded by subsection (5) above, if a person has attained the normal retirement age for directors, he shall not be eligible to be elected a director of a building society unless—

(a)he has been approved as eligible for election by resolution of the board of directors, and

(b)his age and the reasons for the board’s approval of his eligibility have been notified to every person entitled to vote at the election.

[F280(7A)Where the information required to be notified by subsection (7)(b) is sent electronically, it must be sent to an electronic address notified by the person for the purpose.

(7B)The requirement of subsection (7)(b) to notify information to a person is satisfied by the publication of that information on a web site only if—

(a)the society and that person have agreed to his accessing information on a web site;

(b)the published information is information to which the agreement applies;

(c)that person is notified before the voting date F281... of—

(i)the publication of the information on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the information may be accessed, and how it may be accessed; and

(d)the information is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the voting date.

(7C)Where, in a case in which subsection (7B) is relied on for compliance with a requirement of subsection (7)(b)—

(a)information is published for a part, but not all, of the period mentioned in subsection (7B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the election of a director.]

(8)In this section “the normal retirement age”, in relation to the directors of a building society, means 70 years or such lesser age as the rules of the society prescribe as the normal retirement age for its directors; and “the compulsory retirement age”, for a society whose rules make the provision authorised by subsection (5) above, means the age so prescribed in its rules.

(9)The rules of a building society may impose, as a condition of a person’s eligibility to be or to remain a director of the society, a requirement that he shall hold beneficially shares in the society not less in value than the amount prescribed by the rules, but the minimum holding to be required shall not exceed £1,000 or such other amount as may be substituted for it by order of the [F282Treasury] under this subsection.

(10)The rules of a building society may impose, as conditions of the validity of a person’s nomination for election as a director, requirements as to—

(a)the minimum number of members who must join in nominating him,

F283[(b)their qualifications as respects length of membership and the value of their shares or the amount of their mortgage debt;]

(c)the depositing of money with the society in connection with his candidature,

but no other requirements; and rules made by virtue of this subsection must comply with section 61.

F284[(10A)A nomination of a candidate for election as a director of a building society—

(a)may be made at any time; but

(b)if made after the closing date for the nomination of candidates for the next election of directors, shall be carried forward (unless the candidate otherwise requires) as a nomination for the next election of directors after that;

and in this subsection and section 61 “the closing date for the nomination of candidates”, in relation to an election of directors, means the last day of the last financial year to end before the voting date.]

(11)A director of a building society shall retire from office—

(a)in any case not provided for by paragraph (b) below, subsection (12) below or rules under section 61(10), at the third annual general meeting of the society following the date of his election, and

(b)in a case where he had attained the normal retirement age at his election, at the next annual general meeting following that date;

subject (in either case) to any provision for his earlier retirement on the grounds of ceasing to hold the requisite shares in the society contained in the rules of the society.

(12)A director of a building society attaining the normal retirement age or, as the case may be, the compulsory retirement age shall, subject to any provision of the rules for earlier retirement, retire from office at the next annual general meeting of the society.

(13)If the rules of a building society so provide, the directors for the time being may appoint as additional directors or to fill any vacancy on the board of directors any person who—

(a)has not attained—

(i)the normal retirement age, or

(ii)the compulsory retirement age (where that age is less than the normal retirement age), and

(b)appears to them to be fit and proper to be a director.

not being a person who, having been nominated for election as a director at any election held within the preceding twelve months, was not elected as a director.

(14)A person who is co-opted under subsection (13) above shall cease to hold office at the end of the permitted period unless he is elected as a director of the society in accordance with this section within that period.

(15)A person who holds office as, or is to his knowledge nominated for election or proposed for appointment under subsection (13) above as, a director of a building society shall, not later than 28 days before he attains the normal retirement age or, as the case may be, the compulsoryretirement age for directors of the society, give the society notice of the date on which he will attain that age; and if he fails to do so he shall be liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding £40 for every week during which the offence continues.

(16)The power of the [F282Treasury] to make an order under subsection (9) above—

(a)includes power to make such transitional provision as [F285they consider] necessary or expedient, and

(b)shall be exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(17)In this section—

and, for the purposes of this Act, the date of a person’s election to office as a director of a building society, in a case where the rules provide for election [F290by postal or electronic ballot], is the date of the meeting at which the declaration of the result of the ballot is made.

Textual Amendments

F273S. 60(1)(a) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(1), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(s)

F275S. 60(1A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(2), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(s)

F276S. 60(3)(3A) substituted for s. 60(3) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(3), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(s)

F277Word in s. 60(4) inserted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 157(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F278Words in s. 60(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(4), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(s)

F279S. 60(4A) inserted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 157(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F281Words in s. 60(7B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 10

F282Words in s. 60(9)(16) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 157(c) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F283S. 60(10)(b) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(5), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(s)

F284S. 60(10A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(6), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(s)

F285Words in s. 60(16) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 157(d) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F286Definition in s. 60(17) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 27(7), 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(s)(cc)(viii)

Modifications etc. (not altering text)

C93Ss. 60(1)(2)(3)(9)(10), 61 excluded (temp.) by S.I. 1986/2168, art. 3(1)(3)

C94S. 60(9)(16): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

61 Directors: supplementary provisions as to elections, etc.U.K.

[F291(1)Rules made under section 60(10)(a), in order to comply with this section, must not require—

(a)in the case of a society whose total commercial assets do not exceed £100 million, more than [F29250] members;

(b)in the case of a society whose total commercial assets exceed £100 million but do not exceed £250 million, more than [F292100] members;

(c)in the case of a society whose total commercial assets exceed £250 million but do not exceed £1,000 million, more than [F292150] members;

(d)in the case of a society whose total commercial assets exceed £1,000 million but do not exceed £5,000 million, more than [F292200] members; and

(e)in the case of a society whose total commercial assets exceed £5,000 million, more than [F292250] members,

to join in nominating a person for election as a director.

(2)Rules under section 60(10)(b), in order to comply with this section, must not require a nominating member—

(a)to have been a member for more than two years before the date of the nomination; or

(b)if he claims eligibility as a shareholding member, to hold, or to have held at any time during that period, shares in the society to a value greater than [F293£200]; or

(c)if he claims eligibility as a borrowing member, to owe to the society, or to have owed to the society at any time during that period, a mortgage debt of an amount greater than [F293£200].]

(3)Rules made under section 60(10)(c), in order to comply with this section—

(a)must not require more than [F294£500] to be deposited with the society;

(b)must not require the money to be deposited before the date which, under the rules, is the closing date for the nomination of candidates for the election; and

(c)must provide for the return of the deposit to the candidate in the event of his securing—

(i)not less than 5 per cent. of the total number of votes cast for all the candidates in the election; or

(ii)not less than 20 per cent. of the number of votes cast for the candidate who is elected with the smallest number of votes.

F295[(3A)In subsection (1) above “total commercial assets”, in relation to a building society, means the difference between the total assets of the society as shown in the relevant accounts and the aggregate of—

(a)the liquid assets of the society as shown in those accounts in pursuance of regulations [F296under section 72C or 72G, or in accordance with international accounting standards, as appropriate]; and

(b)the fixed assets of the society as so shown;

and in this subsection “the relevant accounts” means the accounts which, immediately before the closing date for the nomination of candidates, were the accounts last prepared by the society under [F297section 72A or 72E and “liquid assets” and “fixed assets”, in the case of societies which produce IAS individual accounts or IAS group accounts, have the same meaning as given in section 6(16)].

(4)The [F298Treasury] may, by order, substitute—

(a)for any amount or number specified in subsection (1) above;

(b)for any amount specified in subsection (2) above; or

(c)for any amount or percentage specified in subsection (3) above,

such other amount, number or percentage as [F299they think] appropriate; and the [F300Treasury may] by order vary subsection (3A) above by adding to or deleting from it any provision or by varying any provision contained in it.]

(5)The power to make orders under subsection (4) above—

(a)includes power to make such transitional provision as the [F301Treasury consider] necessary or expedient, and

(b)is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(6)If a building society, in a case where the board of directors has approved as eligible for election a person who has attained the normal retirement age, fails to notify every person entitled to vote at the election as required by section 60(7), the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence; but no such failure shall invalidate the election.

(7)[F302If, before the closing date for the nomination of candidates, a duly nominated candidate for election as a director of a building society furnishes the society with an election address, or a revised election address, of not more than 500 words], then, subject to subsection (8) below—

(a)it shall be the duty of the society to send a copy of the address [F303or, as the case may require, the revised address] to each member of the society who is entitled to vote in the election;

(b)each member’s copy shall be sent in the same manner and, so far as practicable, at the same time as the notice of the meeting at which the election is to be conducted or [F304the notice of the postal or electronic ballot is] sent out, as the case may be, or as soon as is practicable thereafter; and

(c)if the building society fails to comply with the requirements of this subsection the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also liable for the offence;

but no such failure shall invalidate the election.

[F305(7A)Subsection (7B) applies where, in a case in which—

(a)a society gives notice in accordance with paragraph 22A or 22B of Schedule 2 of the meeting at which the election is to be conducted;

(b)a society gives notice of a postal ballot by which the election is to be conducted by sending it electronically to an electronic address; or

(c)a society gives notice of an electronic ballot by which the election is to be conducted,

the copy of the election address or revised election address that is required to be sent to a member under subsection (7)(b) is not transmitted or published at the same time as the notice.

(7B)The requirement of subsection (7)(b) to send a member his copy of the election address or revised election address in the same manner as the notice is satisfied if—

(a)a copy of the address or revised address is made available to the member in the same way as the notice; or

(b)such a copy (without being made available to the member in that way) is sent to the member in a manner set out by the society for the purpose in the notice.

(7C)Where a copy of an election address or revised election address is sent to a member electronically under subsection (7B), it must be sent to an electronic address notified by the member for the purpose.

(7D)The requirements of subsection (7)(b) or (7B)(a) are satisfied by the publication of a copy of the election address or revised election address on a web site only if—

(a)the notice of the election meeting or of the electronic ballot is a notice given to that member by being published on a web site;

(b)an agreement between the society and the member to his accessing information on a web site applies to copies of election addresses or revised election addresses for the meeting or ballot in question;

(c)the member is notified F306... of—

(i)the publication of a copy of the address or revised address on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the copy may be accessed, and how it may be accessed;

(d)the notification for the purposes of paragraph (c) above is given no later than the day after the date on which the copy of the election address or revised election address is first capable of being accessed on the notified web site; and

(e)that date was the same as the date on which the notice of the election meeting or of the electronic ballot was first capable of being accessed on a web site or (in a case to which subsection (7B) applies) was as soon as practicable after that date;

(f)a copy of the election address or revised election address is continuously published on the notified web site throughout the period beginning with the day on which it was first accessible on that site and ending with the voting date (within the meaning of section 60(17)).

(7E)Where, in a case in which subsection (7D) is relied on for compliance with a requirement under subsection (7)(b) or (7B)(a) aboveF307...—

(a)a copy is published for a part, but not all, of the period mentioned in subsection (7D)(f), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the election of a director.]

(8)Subsection (7) above does not require a building society to send copies of an address [F308or a revised address] to members of the society in any case where—

(a)publicity for the address [F309or revised address] would be likely to diminish substantially the confidence in the society of investing members of the public, or

(b)the rights conferred by that subsection are being abused to seek needless publicity for defamatory matter or for frivolous or vexatious purposes;

and that subsection shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of an address [F308or a revised address] which does not relate directly to the affairs of the society.

(9)The [F310FCA] shall hear and determine any dispute arising under subsection (8)(a) above, whether on the application of the society or of any other person who claims to be aggrieved.

(10)The rules of a building society, if they provide for the retirement by rotation of its directors, may provide that a person elected to fill a vacant seat on the board must retire at the annual general meeting at which, in accordance with the rules for retirement by rotation, the seat is to fall vacant.

(11)Subsection (10) above applies to any vacancy arising when an elected director ceases to hold office for any reason before the annual general meeting at which (disregarding his age) the seat is due to fall vacant under section 60(11)(a).

(12)For the purposes of section 60(17) “the permitted period”, with reference to the tenure of office of co-opted directors, is the period beginning with the date of the co-opted director’s appointment and ending with whichever of the following first occurs, that is to say—

(i)in the case of a building society which elects its directors at its annual general meeting, the conclusion of the next such meeting following his appointment;

(ii)in the case of a building society which elects its directors by postal [F311or electronic] ballot, the declaration at its annual general meeting of the result of the next such ballot conducted after his appointment;

(iii)the expiration of the period of sixteen months beginning with the date of his appointment;

but a general meeting or postal [F311or electronic] ballot shall be disregarded for the purposes of this paragraph if the closing date for the nomination of candidates falls before the date of the co-opted director’s appointment.

(13)Where a person becomes or ceases to be a director of a building society, the society shall within one month give notice of that fact to the [F312FCA] , stating the person’s full name and address and the date on which he became, or ceased to be, a director; and the [F312FCA] shall record the person’s name and the date on which he began to hold, or, as the case may be, ceased to hold office, in the public file of the society.

(14)If a building society fails to comply with subsection (13) above the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F291S. 61(1)(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 28(1), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(t)

F292Words in s. 61(1)(a)-(e) substituted (1.12.1999) by S.I. 1999/3032, art. 2(a)-(e)

F295S. 61(3A)(4) substituted for s. 61(4) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 28(2), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(t)

F296Words in s. 61(3A)(a) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 3(1)(a)

F297Words in s. 61(3A) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 3(1)(b)

F298Word in s. 61(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 158(a)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F299Words in s. 61(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 158(a)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F300Words in s. 61(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 158(a)(iii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F301Words in s. 61(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 158(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F302Words in s. 61(7) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 28(3)(a), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(t)

F303Words in s. 61(7)(a) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 28(3)(b), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(t)

F306Words in s. 61(7D)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 10

F308Words in s. 61(8) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 28(4)(a), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(t)

F309Words in s. 61(8) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 28(4)(b), 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(t)

Modifications etc. (not altering text)

C95Ss. 60(1)(2)(3)(9)(10), 61 excluded (temp.) by S.I. 1986/2168, art. 3(1)(3)

C96S. 61(4)(5): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

Dealings with directorsU.K.

62 Prohibition of tax-free payments to directors.U.K.

(1)A building society shall not pay a director remuneration (whether as director or otherwise) free of income tax, or otherwise calculated by reference to or varying with the amount of his income tax, or to or with any rate of income tax.

(2)Any rule of a building society and any provision of any contract, or in any resolution of a building society, for payment to a director of remuneration falling within subsection (1) above has effect as if it provided for payment, as a gross sum subject to income tax, of the net sum for which the rule, contract or resolution actually provides.

Modifications etc. (not altering text)

C97S. 62 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(a)(2) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch.1; S.I. 1993/2213, art. 2, Sch.5.

63 Directors to disclose interests in contracts and other transactions.U.K.

(1)It is the duty of a director of a building society who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the society to declare the nature of his interest to the board of directors of the society in accordance with this section.

(2)In the case of a proposed contract, the declaration shall be made—

(a)at the meeting of the directors at which the question of entering into the contract is first taken into consideration; or

(b)if the director was not at the date of that meeting interested in the proposed contract, at the next meeting of the directors held after he became so interested.

(3)Where the director becomes interested in a contract after it is made, the declaration shall be made at the first meeting of the directors held after he becomes interested in the contract.

(4)For the purposes of this section, a general notice given to the directors of a building society by a director to the effect that—

(a)he is a member of a specified company or firm and is to be regarded as interested in any contract which may, after the date of the notice, be made with that company or firm, or

(b)he is to be regarded as interested in any contract which may, after the date of the notice, be made with a specified person who is connected with him,

is a sufficient declaration of interest in relation to any contract made after that date with that company, firm or person.

(5)A director need not make a declaration or give a notice under this section by attending in person at a meeting of the directors if he takes reasonable steps to secure that the declaration or notice is brought up and read at the meeting.

(6)The foregoing provisions of this section apply in relation to any transaction or arrangement as they apply in relation to a contract and, for the purposes of this section, a transaction or arrangement of a kind described in section 65 made by a society for a director of the society or a person connected with a director of the society is to be treated (if it would not otherwise be so treated, and whether or not it is prohibited by that section) as a transaction or arrangement in which that director is interested.

(7)A director who fails to comply with this section shall be guilty of an offence and liable—

(a)on conviction on indictment, to a fine; or

(b)on summary conviction, to a fine not exceeding the statutory maximum.

Modifications etc. (not altering text)

C98S. 63 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(b)(2) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch.1; S.I. 1993/2213, art. 2, Sch.5.

64 Substantial property transactions involving directors and connected persons.U.K.

(1)A building society shall not enter into an arrangement—

(a)whereby a director of the society, or a person connected with a director of the society, acquires or is to acquire one or more non-cash assets of the requisite value from the society; or

(b)whereby the society acquires or is to acquire one or more non-cash assets of the requisite value from a director of the society or a person connected with a director of the society,

unless the arrangement is first approved by a resolution of the society passed at a general meeting.

(2)For this purpose a non-cash asset is of the requisite value if at the time the arrangement in question is entered into its value is—

(a)except in a case falling within paragraph (b) below, not less than [F313£200,000]; and

(b)where the last balance sheet of the society showed reserves amounting to less than [F314£1,000,000], not less than the higher of [F315£2,000] or the amount which represents 10 per cent. of the reserves so shown.

(3)The [F316Treasury may by order] amend subsection (2) above so as to substitute for any of the amounts for the time being specified in paragraphs (a) and (b) of that subsection such other amount as [F317they think] appropriate.

(4)The power to make an order under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(5)In this section “non-cash asset” means any property or interest in property other than cash and a reference to the acquisition of a non-cash asset includes the creation or extinction of an estate or interest in, or a right over, any property and also the discharge of any person’s liability, other than a liability for a liquidated sum.

(6)An arrangement entered into by a building society in contravention of this section, and any transaction entered into in pursuance of the arrangement (whether by the society or any other person) is voidable at the instance of the society unless—

(a)restitution of any money or other asset which is the subject matter of the arrangement or transaction is no longer possible or the society has been indemnified in pursuance of subsection (7)(b) below for the loss or damage suffered by it, or

(b)any rights acquired in good faith, for value and without actual notice of the contravention by any person who is not a party to the arrangement or transaction would be affected by its avoidance, or

(c)the arrangement is affirmed by the society at a general meeting held not later than the next annual general meeting after the entry into the arrangement.

(7)Where an arrangement or transaction is entered into with a building society by a director of the society or a person connected with him in contravention of this section then, without prejudice to any other liability but subject to subsections (8) and (9) below, that director and the person so connected, and any other director of the society who authorised the arrangement of any transaction entered into in pursuance of such an arrangement, is liable—

(a)to account to the society for any gain which he has made directly or indirectly by the arrangement or transaction, and

(b)(jointly and severally with any other person liable under this subsection) to indemnify the society for any loss or damage resulting from the arrangement or transaction.

(8)Where an arrangement or transaction is entered into by a building society and a person connected with a director of the society in contravention of this section, that director is not liable under subsection (7) above if he shows that he took all reasonable steps to secure the society’s compliance with this section.

(9)In any case, a person so connected and any such other director as is mentioned in subsection (7) above is not so liable if he shows that, at the time the arrangement was entered into, he did not know the circumstances constituting the contravention.

Textual Amendments

F316Words in s. 64(3) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 159(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F317Words in s. 64(3) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 159(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C99S. 64 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(c)(2) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 1; S.I. 1993/2213, art. 2, Sch. 5.

C100S. 64(3): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

65 Restriction on loans, etc. to directors and persons connected with them.U.K.

(1)Subject to the following provisions of this section, a building society shall not—

(a)make [F318a loan] to a director or a person connected with a director of the society; or

(b)dispose of property by way of lease or hire to a director or a person connected with a director of the society; or

(c)make a payment on behalf of a director or a person connected with a director of the society in connection with the provision of [F319any service of a kind which is provided by building societies for individuals in the ordinary course of business]; or

(d)enter into a guarantee or provide any security which is incidental to or connected with any such loan, disposal of property or payment; or

(e)take part in any arrangement whereby—

(i)another person enters into a transaction which, if it had been entered into by the society, would have contravened any of paragraphs (a) to (d) above; and

(ii)that other person, in pursuance of the arrangement, has obtained or is to obtain any benefit from the society or a subsidiary of the society.

(2)Subsection (1)(a) above does not apply to—

(a)any loan of an amount which, when aggregated with any other relevant loans, does not exceed [F320£10,000];

(b)any loan made in the ordinary course of the society’s business and of an amount not greater and made on other terms not more favourable than it is reasonable to expect the society to have offered to a person of the same financial standing but unconnected with the society; or

(c)any loan, the amount of which, when aggregated with any other relevant loans, does not exceed [F321£200,000], made for or towards the purchase or improvement of a dwelling-house used or to be used as the director’s only or main residence if he is an executive director and loans of that description and on similar terms are ordinarily made by the society to its employees.

(3)Subsection (1)(b) above does not apply to—

(a)any lease or hiring of property the value of which, when aggregated with the value of any other relevant leases or hirings, does not exceed [F322£20,000]; or

(b)any lease or hiring made in the ordinary course of the society’s business and on terms not more favourable than it is reasonable to expect the society to have offered to a person unconnected with the society.

(4)Subsection (1)(c) above does not apply to—

(a)any payment amounting, when aggregated with any other relevant payment, to no more than [F323£10,000] in respect of which the person on whose behalf it is made is under an obligation to reimburse the society within a period not exceeding two months beginning with the date of the payment; or

(b)any payment of an amount not greater and on other terms not more favourable than it is reasonable to expect the society to have offered to a person of the same financial standing but unconnected with the society.

(5)Subject to compliance with the requirements of subsection (6) below, subsection (1) above does not preclude a building society from doing anything to provide a director with funds to meet expenditure incurred or to be incurred by him for the purposes of the society or for the purpose of enabling him properly to perform his duties as a director of the society nor does it preclude the society from doing anything to enable a director to avoid incurring such expenditure.

(6)The following are the requirements referred to in subsection (5) above—

(a)the things must either be done with the prior approval of the society given at a general meeting at which the requisite matters are disclosed or be done on condition that, if the approval of the society is not so given at the next annual general meeting, the loan is to be repaid, or any other liability arising under the transaction is to be discharged , within six months from the conclusion of that meeting; and

(b)the amount provided, when aggregated with any other relevant provision of funds, does not exceed [F324£40,000].

(7)The following are the requisite matters which must be disclosed for the purposes of subsection (6) above—

(a)the purpose of the expenditure incurred or to be incurred, or which would otherwise be incurred, by the director;

(b)the amount of the funds to be provided by the society; and

(c)the extent of the society’s liability under any transaction which is or is connected with the thing in question.

(8)The [F325Treasury may by order made by statutory instrument] substitute for any sum specified in this section a larger sum specified in the order.

(9)An order under subsection (8) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(10)In this section—

(11)Section 70 has effect for the interpretation, in the subsequent provisions of this Part, of references to transactions or arrangements contravening this section and to such transactions or arrangements being made “for” a person.

Textual Amendments

F318Words in s. 65(1)(a) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 24(1)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiii)

F319Words in s. 65(1)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 24(1)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiii)

F325Words in s. 65(8) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 160 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F326Word in s. 65(10) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 24(2)(a), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiii)(cc)(ix)

F327Definition in s. 65(10) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 24(2)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiii)

Modifications etc. (not altering text)

C101S. 65 modified (13.1.1993 for certain purposes, 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(d)(3) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 1; S.I. 1993/2213, art. 2, Sch. 5.

C102S. 65(8): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

66 Sanctions for breach of s. 65.U.K.

(1)If a building society enters into a transaction or arrangement contravening section 65, the transaction or arrangement is voidable at the instance of the society unless—

(a)restitution of any money or any other assets which is the subject matter of the arrangement or transaction is no longer possible, or the society has been indemnified in pursuance of subsection (2)(b) below for the loss or damage suffered by it, or

(b)any rights acquired in good faith, for value and without actual notice of the contravention by a person other than the person for whom the transaction or arrangement was made would be affected by its avoidance.

(2)Where a transaction or arrangement contravening section 65 is made by a building society for a director of the society or a person connected with a director of the society then, without prejudice to any other liability but subject to subsections (3) and (4) below, that director and the person so connected and any other director of the society who authorised the transaction or arrangement (whether or not is has been avoided in pursuance of subsection (1) above) is liable—

(a)to account to the society for any gain which he has made directly or indirectly by the transaction or arrangement; and

(b)(jointly and severally with any other person liable under this subsection) to indemnify the society for any loss or damage resulting from the transaction or arrangement.

(3)Where a transaction or arrangement contravening section 65 is entered into by a building society and a person connected with a director of the society, that director is not liable under subsection (2) above if he shows that he took all reasonable steps to secure the society’s compliance with that section.

(4)In any case, a person so connected and any such other director as is mentioned in subsection (2) above is not so liable if he shows that, at the time the transaction or arrangement was entered into, he did not know the circumstances constituting the contravention.

(5)A director of a building society who authorises or permits the society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 65 is guilty of an offence.

(6)A building society which enters into a transaction or arrangement contravening section 65 for one of its directors is guilty of an offence unless it shows that, at the time the transaction or arrangement was entered into, it did not know the circumstances constituting the contravention.

(7)A person who procures a building society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 65 is guilty of an offence.

(8)A person other than a building society who commits an offence under this section shall be liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; or

(b)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or both.

(9)A building society which commits an offence under this section shall be liable on conviction on indictment or on summary conviction to a fine which, on summary conviction, shall not exceed the statutory maximum.

Modifications etc. (not altering text)

C103S. 66 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para.9(1)(e)(2) (with ss. 7(5). 93(4)); S.I. 1993/16, art. 2, Sch.1; S.I. 1993/2213, art. 2, Sch.5.

[F32966A Transactions with directors and persons connected with them.U.K.

(1)This section applies where a building society enters into a transaction the parties to which include—

(a)a director of the society; or

(b)a person connected with such a director,

and the board of directors, in connection with the transaction, exceed any limitation on their powers by reason of anything included in the society’s constitution, that is to say, its memorandum and rules.

(2)The transaction is voidable at the instance of the society.

(3)Whether or not it is avoided, any such party to the transaction as is mentioned in subsection (1)(a) or (b) above, and any director of the society who authorised the transaction, is liable—

(a)to account to the society for any gain which he has made directly or indirectly by the transaction, and

(b)to indemnify the society for any loss or damage resulting from the transaction.

(4)Nothing in the above provisions shall be construed as excluding the operation of any other enactment or rule of law by virtue of which the transaction may be called in question or any liability to the society may arise.

(5)The transaction ceases to be voidable if—

(a)restitution of any money or other asset which was the subject-matter of the transaction is no longer possible, or

(b)the society is indemnified for any loss or damage resulting from the transaction, or

(c)rights acquired bona fide for value and without actual notice of the directors’ exceeding their powers by a person who is not party to the transaction would be affected by the avoidance, or

(d)the transaction is ratified by the society in general meeting, by ordinary or special resolution or otherwise as the case may require.

(6)A person other than a director of the society is not liable under subsection (3) above if he shows that at the time the transaction was entered into he did not know that the directors were exceeding their powers.

(7)This section does not affect the operation of sub-paragraph (1) of paragraph 17 of Schedule 2 in relation to any party to the transaction not within subsection (1)(a) or (b) above.

But where a transaction is voidable by virtue of this section and valid by virtue of that sub-paragraph in favour of such a person, the court may, on the application of that person or of the society, make such order affirming, severing or setting aside the transaction, on such terms, as appear to the court to be just.

(8)In this section “transaction” includes any act; and the reference in subsection (1) above to limitations under the society’s constitution includes limitations deriving—

(a)from a resolution of the society passed at a general or special meeting or on a postal [F330or electronic] ballot; or

(b)from any agreement between the members of the society.]

Textual Amendments

F329S. 66A inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 38, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(v)

67 Directors, etc, not to accept commissions in connection with loans.U.K.

(1)This section applies to any person who holds office in or is employed by a building society as director, secretary, chief excecutive, manager, solicitor, surveyor or valuer or in connection with the assessment of the adequacy of securities for [F331loans] secured on land.

(2)No person to whom this section applies shall (in addition to the remuneration prescribed or authorised by the rules or any resolution of the society) accept from any other person any commission for or in connection with any loan made by the society.

(3)If a person to whom this section applies accepts a commission in contravention of subsection (2) ab ove—

(a)both he and, subject to subsection (4) below, the person who paid it shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and

(b)if, having been convicted of an offence under paragraph (a) above, the person accepting the commission fails to pay over to the society the amount or value of the commission, as and when directed to do so by the court which convicted him, he shall be guilty of an offence under this paragraph and liable on summary conviction to imprisonment for a term not exceeding six months.

(4)No offence under paragraph (a) of subsection (3) above is committed by the person who paid the commission unless he did so knowing the circumstances that constituted the offence under that paragraph on the part of the person who accepted it from him.

(5)Where—

(a)a charge upon a policy of life assurance is given as additional security for [F332a loan] made by a building society, or

(b)a building society makes [F332an additional loan] to enable payment to be made of a premium on a policy of insurance, or

(c)any policy of insurance is taken out so as to comply with the terms on which [F332a loan] is made by a building society, whether by way of insuring the property given as security for [F332the loan] or otherwise,

and the policy is effected through the building society, or the society nominates or selects a person by whom the policy is to be issued, it shall be unlawful for any person to whom this section applies, in connection with the effecting of the policy, to receive any commission from a person by or through whom the policy is issued.

(6)A person who pays, and a person who accepts, any commission which subsection (5) above makes it unlawful to receive shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

(7)In this section—

Textual Amendments

F331Words in s. 67(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 25(1); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiv)

F332Words in s. 67(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 25(2); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiv)

F333Words in s. 67(7) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 25(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xiv)

F334Words in s. 67(7) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), s. 211(2), Sch. 21 para. 71 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h)

Modifications etc. (not altering text)

C104S. 67(1)(7) amended (E.W.) (1.1.1992) by S.I. 1991/2684, arts. 2(1), 4 Sch. 1

68 Records of loans, etc. for directors falling within s. 65.U.K.

(1)A building society shall maintain a register containing a copy of every subsisting transaction or arrangement (other than an excepted transaction or arrangement) falling within section 65(1) made for a director or a person connected with a director of the society during the current financial year or any of the preceding ten financial years.

(2)In the case of a transaction or arrangement which is not in writing, there shall be kept in the register a written memorandum setting out its terms.

(3)A building society shall make available for inspection by members—

(a)at its principal office during the period of 15 days expiring with the date of its annual general meeting, and

(b)at the annual general meeting,

a statement containing the requisite particulars of the transactions and arrangements falling within section 65(1) which were included in the register under subsection (1) above at any time during the last complete financial year preceding the meeting.

(4)The requisite particulars are those specified in Schedule 9 to this Act.

[F335(5)The society must send two copies of the statement required to be made available under subsection (3) to the FCA and, if the society is a PRA-authorised person, one copy to the PRA, on the date on which the statement is required to be first made available to members.

(5A)The FCA must keep a copy of the statement in the public file of the society.]

(6)A copy of the statement required to be so made available shall also be sent, on demand and on payment of [F336such fee (not exceeding £5) as the society may from time to time determine], to any member of the society.

[F337(6A)Where a copy of a statement is required to be sent to a member under subsection (6)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in subsection (6B) are satisfied.

(6B)The conditions of this subsection are satisfied in the case of a copy of a statement if—

(a)the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)the member is notified F338... of—

(i)the publication of the statement on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the statement may be accessed, and how it may be accessed; and

(d)a copy of the statement continues to be published on that web site throughout the period of 21 days beginning with the day on which the society notifies the member in accordance with paragraph (c).]

(7)There are excepted from the obligations imposed by this section on a building society with respect to a financial year all transactions or arrangements made or subsisting during that year for a person who was at any time during that year a director of the society or was connected with a director of the society if the aggregate of the values of each transaction or arrangement made for that person, less the amount (if any) by which the value of those transactions or arrangements has been reduced, did not exceed [F339£2,000] at any time during that year

(8)There are also excepted from the obligations imposed by this section on a building society with respect to a financial year all transactions or arrangements falling within paragraphs (b), (d) or (e) of section 65(1) made during that year for a person who was at any time during that year a director of the society or was connected with a director of the society if the aggregate of the values of each such transaction or arrangement so made for that director or any person connected with him, less the amount (if any) by which the value of those transactions or arrangements has been reduced, did not exceed [F340£10,000] at any time during that year.

(9)The [F341Treasury may by order] amend subsection (7) or (8) above so as to substitute for the amount for the time being specified in that subsection such other amount as [F342they think] appropriate.

(10)The power to make an order under subsection (9) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(11)If a building society fails to comply with any provision of this section (or Schedule 9) the society shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum, and so shall any officer who is also guilty of the offence.

[F343(11A)Where, in a case in which subsection (6A)(b) is relied on for compliance with a requirement of subsection (6)—

(a)a statement is published for a part, but not all, of the period mentioned in subsection (6B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under subsection (11) by reason of that failure.]

Textual Amendments

F336Words in s. 68(6) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 26; S.I. 1997/1427, art. 2(k)(n)(iv)

F338Words in s. 68(6B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 10

F341Words in s. 68(9) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 161(b)(i)(with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F342Words in s. 68(9) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 161(b)(ii)(with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C105S. 68 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(f)(2) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 1; S.I. 1993/2213, art. 2, Sch. 5.

C106S. 68(9): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

Disclosure and record of related businessesU.K.

69 Disclosure and record of income of related businesses.U.K.

(1)Where, at any time during a financial year of a building society, a person both is a director or other officer of a building society and is, or is a director of or partner in, a business associate of the society, this section shall apply, as respects that year, to that person in relation to the business of the business associate.

(2)A person is a “business associate” of a building society in any financial year of the society if that person—

(a)carries on a business which consists of or includes the provision of relevant services,

(b)provides relevant services during that year to, or to other persons in connection with [F344loans] secured on land made by, the society and

[F345(c)is not a connected undertaking of the society;]

and “associated” has a corresponding meaning.

(3)The following are relevant services—

(a)conveyancing services provided by a solicitor;

(b)surveying and valuing land or other property;

(c)accountancy services;

(d)arranging for the provision of insurance against loss of or damage to property or on human life;

(e)any other services designated as relevant services.

(4)Where a business associate of a building society provides the society with services which are relevant services by virtue of subsection (3) above, any administrative services provided to the society by the business associate are also relevant services.

(5)The [F346Treasury] may by order in a statutory instrument—

(a)designate as relevant services services of any description specified in the order which are normally provided to building societies; and

(b)make such incidental, supplementary or transitional provision as [F347they consider] necessary or expedient;

and in subsection (3)(e) above “designated” means designated by an order under this subsection.

(6)Where this section applies, as respects a financial year of a building society, to a person as a director or other officer of the society in relation to the business of a business associate, that person shall furnish the society with the requisite particulars of that business.

(7)The requisite particulars of the business of a business associate of a building society are—

(a)except where an election under paragraph (b) below is in force, those specified in Part I of Schedule 10 to this Act;

(b)if a building society elects to adopt Part II of that Schedule for its directors [F348and other officers] as respects a financial year, those specified in Part II of that Schedule; and

(c)as regards relevant services designated by an order under subsection (5) above, such particulars as are specified in the order;

and Part III of the Schedule has effect to supplement Parts I and II and includes a definition of “the volume of the business” for the purposes of this section.

(8)An election by a building society to adopt Part II of Schedule 10 as regards the requisite particulars to be furnished by its directors [F348and other officers] must be made in writing to the [F349FCA] before the beginning of the financial year as respects which it is made and the requisite particulars must be furnished in writing within the period of six weeks beginning with the end of the financial year for which they are required.

(9)For the purpose of enabling him to furnish the requisite particulars of the business of a business associate of a building society the person who is under the obligation to furnish them to the society may require any person who is a member of or partner in, or holds any office or employment with, the business associate to furnish him with such information relating to its business as he may reasonably require for that purpose.

(10)Any person who, without reasonable excuse—

(a)fails to furnish the particulars required by subsection (6) above or furnishes particulars which are false or misleading in a material particular or, in the case of particulars under Part II to Schedule 10, are not a justified estimate, or

(b)fails to furnish any information lawfully required of him under subsection (9) above or furnishes information which is false or misleading in a material particular,

shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum.

(11)Subject to subsection (12) below, a building society shall maintain at its principal office a register containing the particulars furnished to it under subsection (6) above as respects the last financial year and each of the ten financial years preceding that year.

(12)No particulars of the business of a business associate of a building society need be kept in the register provided for by subsection (11) above as respects any financial year of the society in which the volume of the business of which the requisite particulars are required did not exceed [F350£10,000] or such other sum as may be substituted for it by order of the [F351Treasury] in a statutory instrument under this subsection.

(13)A building society shall make available for inspection by members—

(a)at its principal office during the period of 15 days expiring with the date of its annual general meeting, and

(b)at the annual general meeting,

a statement containing the particulars required to be kept in the register under subsection (11) above as respects the last financial year.

[F352(14)The society must send two copies of the statement required to be made available under subsection (13) to the FCA and, if the society is a PRA-authorised person, one copy to the PRA, on the date on which the statement is required to be first made available to members.

(14A)The FCA must keep a copy of the statement in the public file of the society.]

(15)A copy of the statement required to be so made available shall also be sent, on demand and on payment of [F353such fee (not exceeding £5) as the society may from time to time determine], to any member of the society.

[F354(15A)Where a copy of a statement is required to be sent to a member under subsection (15)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in subsection (15B) are satisfied.

(15B)The conditions of this subsection are satisfied in the case of a statement if–

(a)the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)the member is notified F355... of—

(i)the publication of the statement on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the statement may be accessed, and how it may be accessed; and

(d)a copy of the statement continues to be published on that web site throughout the period of 21 days beginning with the day on which the society notifies the member in accordance with paragraph (c).]

(16)F356. . . any statutory instrument containing [F357an order made under subsection (5) or (12) above] shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(17)In this section—

Textual Amendments

F344Word in s. 69(2)(b) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 27(1)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xv)

F345S. 69(2)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 27(1)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xv)

F346Words in s. 69(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 162(a)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F347Words in s. 69(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 162(a)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F348Words in s. 69(7)(b)(8) inserted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 27(2); S.I. 1997/1427, art. 2(k)(n)(v)

F351Word in s. 69(12) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 Pt. II para. 162(c) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F353Words in s. 69(15) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 27(3); S.I. 1997/1427, art. 2(k)(n)(v)

F355Words in s. 69(15B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 10

F356Words in s. 69(16) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F357Words in s. 69(16) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 162(e)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F358Words in s. 69(17) substituted (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 2 para. 18

F359Words in s. 69(17) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), s. 211(2), Sch. 21 para. 72 (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h)

Modifications etc. (not altering text)

C107S. 69 modified by S.I. 1987/1498, art. 7, Sch. 2 para. 6

C108S. 69 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(g)(2)(4) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 1; S.I. 1993/2213, art. 2, Sch. 5.

C109S. 69 modified (1.7.1992) by S.I. 1992/1547, arts. 5, 6, Sch. 2

C110S. 69(3)(a)(17) amended (E.W.) (1.1.1992) by S.I. 1991/2684, arts. 2(1), 4, Sch. 1

C111S. 69(5)(12): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

C112S. 69(6) excluded by S.I. 1986/2169, art. 9(1)

C113S. 69(8) modified by S.I. 1986/2169, art. 9(2)

InterpretationU.K.

70 Interpretation of this Part.U.K.

(1)The following provisions apply for the interpretation of this Part.

(2)A person is “connected with” a director of a building society if, but only if, he (not being himself a director of it) is—

(a)that director’s spouse [F360or civil partner], child or step-child; or

(b)a body corporate with which the director is associated; or

(c)a person acting in his capacity as trustee of any trust the beneficiaries of which include—

(i)the director, his spouse [F361or civil partner] or any children or step-children of his, or

(ii)a body corporate with which he is associated, or of a trust whose terms confer a power on the trustees that may be exercised for the benefit of the director, his spouse [F361or civil partner], or any children or step-children of his or any such body corporate; or

(d)a person acting in his capacity as partner of that director or of any person who, by virtue of paragraph (a), (b) or (c) of this subsection, is connected with that director;

(e)a Scottish firm in which—

(i)that director is a partner,

(ii)a partner is a person who, by virtue of paragraph (a), (b) or (c) above, is connected with that director, or

(iii)a partner is a Scottish firm in which that director is a partner or in which there is a partner who, by virtue of paragraph (a), (b) or (c) above, is connected with that director.

(3)In subsection (2)—

(a)a reference to a child or step-child of any person includes an illegitimate child of his [F362but does not include any person who has attained the age of 18], and

(b)paragraph (c) does not apply to a person acting in his capacity as trustee under an employees’ share scheme or a pension scheme.

(4)A director is “associated” with a body corporate if he, his spouse [F363or civil partner], his child or step-child or a person acting in his capacity as trustee of any trust the beneficiaries of which include the director, his spouse [F363or civil partner], child or step-child between them, either—

(a)own at least one-fifth of that body’s equity share capital (within the meaning of [F364the Companies Acts (see section 548 of the Companies Act 2006)]), or

(b)are entitled to exercise or control the exercise of more than one-fifth of the voting power of"that body at any general meeting.

(5)As regards transactions or arrangements falling within section 65, a “transaction contravening section 65” means a transaction to which subsection (1)(a), (b), (c) or (d) of that section applies and an “arrangement contravening section 65” means an arrangement to which subsection (1)(e) of that section applies and such a transaction or arrangement is made “for” a person if—

(a)in the case of a loan, disposal or payment within paragraph (a), (b) or (c), it is made, in the case of paragraph (a) or (b), to him or, in the case of paragraph (c) on his behalf;

(b)in the case of a guarantee or security within paragraph (d), it is made as an incident of or in connection with a loan or disposal to him or a payment on his behalf; and

(c)in the case of an arrangement within paragraph (e), the transaction to which the arrangement relates was made for him.

Textual Amendments

F362Words in s. 70(3)(a) inserted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 28; S.I. 1997/1427, art. 2(k)(n)(vi)

Modifications etc. (not altering text)

C114S. 70 modified (13.1.1993 for certain purposes only and 1.1.1994 for all remaining purposes) by Friendly Societies Act 1992 (c. 40), s. 27, Sch. 11 Pt. II para. 9(1)(h)(2) (with ss. 7(5), 93(4)); S.I. 1993/16, art. 2, Sch. 1; S.I. 1993/2213, art. 2, Sch. 5.

Part VIIIU.K. Accounts and Audit

Modifications etc. (not altering text)

C115Pt. VIII (ss. 71–82) excluded by S.I. 1986/2168, art. 12(1)(a)

C116Pt. VIII (ss. 71–82) modified (temp.until 1.1.1993) by S.I. 1990/1392, art. 6(3)

Accounting records F365. . .U.K.

Textual Amendments

F365Words in s. 71 cross-heading omitted (17.8.2001 for certain purposes) and repealed (1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1)(2), Sch. 3 para. 163(a), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

71 Accounting records F366. . .U.K.

(1)Every building society shall—

(a)cause accounting records to be kept, F367...

F367(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

in accordance with this section.

(2)The accounting records of a society must be such as to—

(a)explain its transactions;

(b)disclose, with reasonable accuracy and promptness, the state of the business of the society at any time;

(c)enable the directors properly to discharge the duties imposed on them by or under this Act [F368(and, where applicable Article 4 of the IAS Regulation)] and their functions of direction of the affairs of the society; and

(d)enable the society properly to discharge the duties imposed on it by or under this Act [F368(and, where applicable Article 4 of the IAS Regulation)];

and must be kept in an orderly manner.

(3)The accounting records shall in particular contain—

(a)entries from day to day of all sums received and paid by the society and the matters in respect of which they are received or paid;

(b)entries from day to day of every transaction entered into by the society which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society other than insignificant assets or liabilities in respect of the management of the society; and

(c)a record of the assets and liabilities of the society and in particular of assets and liabilities of any class specifically regulated by or under [F369section 6 or 7].

F370(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F370(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F370(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F370(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(8)The accounting records shall be kept at the society’s principal office or at such other place or places as the directors think fit, and shall at all times be open to inspection by the directors.

(9)Accounting records shall be preserved for six years from the date on which they were made.

(10)Where a building society has [F371connected undertakings], the society shall also secure that such accounting records are kept F372. . . by the society and the [F371connected undertakings] as will enable the society to comply with the requirements of this section in relation to the business of the society and those [F371connected undertakings].

[F373(10A)The Commission may, for the purpose of implementing the Council Directive on the supervision of credit institutions on a consolidated basis (No.92/30/EEC), direct that subsection (10) above shall have effect in relation to any building society specified in the direction as if any associated body of the society so specified were linked to it by resolution.]

F374(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F366Words in s. 71 side-note repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F367S. 71(1)(b) and the preceding word “and" repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F368Words in s. 71(2)(c)(d) inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 4

F369Words in s. 71(3)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 29(1); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xvi)

F370S. 71(4)-(7) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F371Words in s. 71(10) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 29(3)(a)-(c); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xvi)

F372Words in s. 71(10) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F373S. 71(10A) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 29(4), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xvi)(cc)(x)

F374S. 71(11) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art.13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C117S. 71 modified (temp.) by S.I. 1986/2168, art. 12(2)(d)

C118S. 71(1)–(10) excluded (temp.) by S.I. 1986/2168, art. 12(2)(a)

AccountsU.K.

F37572 Duty of directors to prepare annual accounts.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

[F37572ADuty to prepare individual accountsU.K.

(1)The directors of every building society shall prepare accounts for the society for each of its financial years.

Those accounts are referred to in this Part as the society’s “individual accounts”.

(2)A society’s individual accounts may be prepared–

(a)in accordance with section 72B (“Building Societies Act individual accounts”), or

(b)in accordance with international accounting standards (“IAS individual accounts”).

This subsection is subject to the following provisions of this section and section 72I (consistency of accounts).

(3)After the first financial year in which the directors of a building society prepare IAS individual accounts (“the first IAS year”), all subsequent individual accounts of the society must be prepared in accordance with international accounting standards unless there is a relevant change of circumstance.

(4)There is a relevant change of circumstance if, at any time during or after the first IAS year, the society ceases to have any securities admitted to trading on a regulated market.

(5)If, having changed to preparing Building Societies Act individual accounts following a relevant change of circumstance, the directors again prepare IAS individual accounts for the society, subsections (3) and (4) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72BBuilding Societies Act individual accountsU.K.

(1)Building Societies Act individual accounts must comprise –

(a)a balance sheet as at the last day of the financial year, and

(b)an income and expenditure account.

(2)The balance sheet must give a true and fair view of the state of affairs of the society as at the end of the financial year; and the income and expenditure account must give a true and fair view of the income and expenditure of the society for the financial year.

(3)Building Societies Act individual accounts must comply with the requirements of regulations made under section 72C as to the form and content of the balance sheet and income and expenditure account and additional information to be provided by way of notes to the accounts or otherwise.

(4)Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s individual accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.

(5)If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the directors must depart from that provision to the extent necessary to give a true and fair view.

(6)Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.

(7)The Treasury may by regulations–

(a)add to the classes of documents to be comprised in a society’s Building Societies Act individual accounts under subsection (1);

(b)make provision as to the matters to be included in any document so added;

(c)modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s Building Societies Act individual accounts;

(d)reduce the classes of documents to be comprised in a society’s Building Societies Act individual accounts.

(8)Regulations under subsection (7)–

(a)may make different provision for different descriptions of society, and

(b)may include incidental and supplementary provisions.

(9)The power to make regulations under subsection (7) is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72CForm and contents of Building Societies Act individual accountsU.K.

(1)The Treasury shall by regulations make provision with respect to the form and contents of Building Societies Act individual accounts.

(2)The Treasury may by regulations make provision with respect to additional information to be contained in Building Societies Act individual accounts, whether in the form of notes or otherwise.

(3)Without prejudice to the generality of subsections (1) and (2), the regulations may—

(a)prescribe accounting principles and rules;

(b)require corresponding information for a preceding financial year;

(c)make different provision for different descriptions of society;

(4)The power to make regulations under this section is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72D IAS individual accountsU.K.

Where the directors of a building society prepare IAS individual accounts, they must state in the notes to those accounts that the accounts have been prepared in accordance with international accounting standards.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72EDuty to prepare group accountsU.K.

(1)If at the end of a financial year a building society has subsidiary undertakings, the directors, as well as preparing individual accounts for the year, shall prepare accounts for the year for the society and those undertakings taken as a whole.Those accounts are referred to in this Part as the society’s “group accounts”.

(2)The group accounts of certain societies are required by Article 4 of the IAS Regulation to be prepared in accordance with international accounting standards (“IAS group accounts”).

(3)The group accounts of other societies may be prepared–

(a)in accordance with section 72F (“Building Societies Act group accounts”), or

(b)in accordance with international accounting standards (“IAS group accounts”).

This subsection is subject to the following provisions of this section.

(4)After the first financial year in which the directors of a building society prepare IAS group accounts (“the first IAS year”), all subsequent group accounts of the society must be prepared in accordance with international accounting standards unless there is a relevant change of circumstance.

(5)There is a relevant change of circumstance if, at any time during or after the first IAS year, the society ceases to have any securities admitted to trading on a regulated market.

(6)If, having changed to preparing Building Societies Act group accounts following a relevant change of circumstance, the directors again prepare IAS group accounts for the society, subsection (4) and (5) apply again as if the first financial year for which such accounts are again prepared were the first IAS year.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72FBuilding Societies Act group accountsU.K.

(1)Building Societies Act group accounts must comprise–

(a)a balance sheet dealing with the state of affairs of the building society and its subsidiary undertakings, and

(b)an income and expenditure account showing the income and expenditure for the society and its subsidiary undertakings.

(2)Building Societies Act group accounts must give a true and fair view of the state of affairs as at the end of the financial year, and the income and expenditure for the financial year of the society and the subsidiary undertakings included in the group accounts as a whole, so far as concerns members of the society.

(3)Building Societies Act group accounts must comply with the requirements of regulations made under section 72G as to the form and content of the group accounts and additional information to be provided by way of notes to the accounts or otherwise.

(4)Where compliance with the provisions of those regulations, and the other provisions of this Act as to the matters to be included in a society’s group accounts or in notes to those accounts, would not be sufficient to give a true and fair view, the necessary additional information must be given in the accounts or in a note to them.

(5)If in special circumstances compliance with any of those provisions is inconsistent with the requirement to give a true and fair view, the directors must depart from that provision to the extent necessary to give a true and fair view.

(6)Particulars of any such departure, the reasons for it and its effect must be given in a note to the accounts.

(7)The Treasury may by regulations–

(a)add to the classes of documents to be comprised in a society’s Building Societies Act group accounts under subsection (1);

(b)make provision as to the matters to be included in any document so added;

(c)modify the requirements of this Part as to the matters to be stated in any document comprised in the society’s Building Societies Act group accounts; and

(d)reduce the classes of documents to be comprised in a society’s Building Societies Act group accounts.

(8)Regulations under subsection (7)–

(a)may make different provision for different descriptions of society, and

(b)may include incidental and supplementary provisions.

(9)The power to make regulations under subsection (7) is exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72GForm and contents of Building Societies Act group accountsU.K.

(1)The Treasury shall by regulations make provision with respect to the form and contents of Building Societies Act group accounts.

(2)The Treasury may by regulations make provision with respect to additional information to be contained in Building Societies Act group accounts, whether in the form of notes or otherwise.

(3)Without prejudice to the generality of subsections (1) and (2), the regulations may—

(a)prescribe accounting principles and rules;

(b)require corresponding information for a preceding financial year;

(c)make different provision for different descriptions of society;

(d)permit group accounts to be prepared in other than consolidated form.

(4)The power to make regulations under this section is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72H IAS group accountsU.K.

Where the directors of a building society prepare IAS group accounts, they must state in the notes to those accounts that the accounts have been prepared in accordance with international accounting standards.

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

72IConsistency of accountsU.K.

(1)The directors of a building society that prepares group accounts must secure that the individual accounts of–

(a)the building society, and

(b)each of its subsidiary undertakings,

are all prepared using the same financial reporting framework, except to the extent that in their opinion there are good reasons for not doing so.

(2)Subsection (1) only applies to accounts of subsidiary undertakings which are required to be prepared under [F376Part 15 of the Companies Act 2006].

(3)Subsection (1) does not require accounts of undertakings that are charities to be prepared using the same financial reporting framework as accounts of undertakings which are not charities.

(4)Subsection (1)(a) does not apply where the directors of a building society prepare IAS group accounts and IAS individual accounts.

(5)The directors of a society which has subsidiary undertakings must secure that, except where in their opinion there are good reasons against it, the financial year of each of its subsidiary undertakings coincides with the society’s own financial year.]

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

[F37772J Disclosures relating to directors, other officers and employees of society required in notes to accountsU.K.

(1)The information specified in Schedule 10A must be given in notes to a building society’s annual accounts.

(2)In that Schedule—

(3)It is the duty of any director of a society, and any person who is or has at any time in the preceding five years been an officer of the society, to give notice to the society of such matters relating to himself as may be necessary for the purposes of Part 1 of Schedule 10A.

(4)A person who makes default in complying with subsection (3) commits an offence and is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(5)The Treasury may, by order, modify the provisions of Schedule 10A.

(6)An order under this section may—

(a)make consequential amendments of or repeals in other provisions of this Act;

(b)make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;

(c)make different provision for different cases.

(7)The power to make an order under this section is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(8)In this section “modify” includes amend, add to or repeal.

Textual Amendments

F377Ss. 72J, 72K inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 5

72KDisclosures about related undertakings required in notes to accountsU.K.

(1)The information specified in Schedule 10B must be given in notes to a building society’s annual accounts.

(2)In the case of a building society whose directors are not required to prepare consolidated group accounts, the information specified in Part 1 of that Schedule must be given.

(3)In the case of a building society whose directors are required to prepare consolidated group accounts, the information specified in Part 2 of that Schedule must be given.

(4)The Treasury may, by order, modify the provisions of Schedule 10B.

(5)An order under this section may—

(a)make consequential amendments of or repeals in other provisions of this Act;

(b)make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;

(c)make different provision for different cases.

(6)The power to make an order under this section is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(7)In this section “modify” includes amend, add to or repeal.]

Textual Amendments

F377Ss. 72J, 72K inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 5

[F37872L.Disclosures relating to off-balance-sheet arrangements required in notes to accountsU.K.

(1)If in any financial year—

(a)a building society is or has been party to arrangements that are not reflected in its balance sheet, and

(b)at the balance sheet date the risks or benefits arising from those arrangements are material,

the information required by this section must be given in notes to the society’s annual accounts.

(2)The information required is—

(a)the nature and business purpose of the arrangements, and

(b)the financial impact of the arrangements on the society.

(3)The information need only be given to the extent necessary for enabling the financial position of the society to be assessed.

(4)Where a building society is required to prepare consolidated group accounts, this section applies in relation to those accounts as if the undertakings included in the consolidation were a single building society.]

Textual Amendments

[F37972M.Disclosure of auditor remuneration required in notes to accountsU.K.

(1)The information specified in Schedule 10C must be given in notes to a building society’s annual accounts.

(2)The Treasury may, by order, modify the provisions of Schedule 10C.

(3)An order under this section may—

(a)make consequential amendments of or repeals in other provisions of this Act;

(b)make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;

(c)make different provision for different cases.

(4)The power to make an order under this section is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(5)In this section “modify” includes amend, add to or repeal.]

Textual Amendments

F37573 Contents and form of annual accounts.U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F375Ss. 72A-72I substituted for ss. 72, 73 (22.12.2004 with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 2

74 Duty of directors to prepare annual business statement.U.K.

(1)The directors of every building society shall, by reference to the annual accounts and other records and information at their disposal, prepare with respect to each financial year of the society a statement (referred to in this Act as “the annual business statement”) relating to prescribed aspects of the business of the society during the year.

(2)Where the society has [F380connected undertakings] the annual business statement shall deal also with prescribed aspects of the business of the [F380connected undertakings] during the year to which it relates.

(3)The annual business statement shall contain such information relating to such aspects of the business of the society and shall be in such form as the [F381Treasury prescribe by regulations]; and in this section “prescribed” means prescribed by regulations under this subsection.

(4)Without prejudice to the generality of subsections (1) to (3) above the regulations may require the annual business statements of building societies to include prescribed information about directors and past directors and persons connected with them F382... and their financial interests.

(5)The information comprising the annual business statement shall give a true representation of the matters in respect of which it is given.

(6)To such extent as may be prescribed matters contained in the society’s annual business statement shall not be the subject of report by the [F383auditor] under section 78.

(7)The power to make regulations under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8)It is the duty of every director F384... of a building society to give notice to the society of such matters relating to himself or his financial interests as may be necessary for the purposes of compliance with the preceding provisions of this section.

(9)Any person who fails to comply with subsection (8) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

(10)Any director who fails to comply with subsection (1) above shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum.

Textual Amendments

F380Words in s. 74(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 31; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xviii)

F381Words in s. 74(3) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 166 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F382Words in s. 74(4) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 5(2)

F384Words in s. 74(8) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 5(3)

Modifications etc. (not altering text)

C119S. 74(3)(4): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

75 Directors’ report.U.K.

(1)The directors of a building society shall prepare for submission to the annual general meeting a report on the business of the society containing—

[F385(a)a fair review of the business of the society and its connected undertakings (if any), complying with section 75A,

(aa)a description of the principal risks and uncertainties facing the society and its connected undertakings (if any),]

(b)such information relating to such aspects of the business of the society or the society and any [F386connected undertakings] as may be prescribed by regulations made by the F387. . . Treasury, and

F388[(c)a statement as to the matters mentioned in subsection (1A) below.]

F389[(1A)The said matters are—

(a)whether the society has acquired or established, or allowed a subsidiary undertaking to acquire or establish, a business to which subsection (3) and subsection (4) or, as the case may be, subsection (5) of section 92A applied;

(b)if the society has acquired or established, or allowed such an undertaking to acquire or establish, such a business, what the business is and whether the society complied with the requirements of subsection (1) of that section; and

(c)if the society did not comply with those requirements, why the society nevertheless proceeded, or allowed the undertaking to proceed, with the acquisition or establishment.]

[F390(1B)If the building society has subsidiary undertakings, the report may, where appropriate, give greater emphasis to those matters which are significant to the society and its subsidiary undertakings taken as a whole.]

F391(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)The power to make regulations under subsection (1) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4)If a directors’ report does not contain [F392the review, information and statement required by subsection (1) above and, where applicable, the review required by subsection (2) above], each director shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum.

Textual Amendments

F385S. 75(1)(a)(aa) substituted (22.12.2004) for s. 75(1)(a) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 3(2)

F386Words in s. 75(1)(b) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 32(1)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xix)

F387Words in s. 75(1)(b) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F388S. 75(1)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 32(1)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xix)

F389S. 75(1A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 32(2); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xix)

F390S. 75(1B) inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 3(3)

F391S. 75(2) omitted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by virtue of The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 3(4)

F392Words in s. 75(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 32(4); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xix)

Modifications etc. (not altering text)

C120S. 75(1)(b): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

[F39375A Business reviewU.K.

(1)The review required for the purposes of section 75(1) is a balanced and comprehensive analysis of—

(a)the development and performance of the business of the building society and its connected undertakings (if any) during the financial year, and

(b)the position of the building society and its connected undertakings (if any) at the end of that year,

consistent with the size and complexity of the business.

(2)The review must, to the extent necessary for an understanding of the development, performance or position of the business of the society and its connected undertakings (if any), include—

(a)analysis using financial key performance indicators, and

(b)where appropriate, analysis using other key performance indicators, including information relating to environmental matters and employee matters.

(3)The review must, where appropriate, include references to and additional explanations of amounts included in the annual accounts of the society.

(4)In this section “key performance indicators” means factors by reference to which the development, performance or position of the business of the society and any connected undertakings it has can be measured most effectively.]

Textual Amendments

F393S. 75A inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 4

76 Summary financial statement for members and depositors.U.K.

(1)The directors of a building society shall, with respect to each financial year, prepare for members and depositors a summary financial statement for that year, that is to say, a statement derived from the annual accounts, annual business statement and director’s report, giving a summary account of the society’s financial development during and financial position at the end of the year.

(2)Where the society has [F394connected undertakings] the statement shall (so far as they are dealt with in the group accounts) give an account of the financial development and position of the society and its [F395connected undertakings].

(3)The [F396Treasury may by regulations] make provision with respect to—

(a)the form of the summary financial statement, and

(b)the information which must be included in it.

(4)Every summary financial statement shall also include in the prescribed form statements to the effect that—

(a)it is only a summary of information in the accounts, business statement and directors’ report;

(b)in so far as it summarises the information in the accounts, those accounts have been audited;

(c)the accounts, business statement and director’s report will be available to members and depositors free of charge on demand at every office of the society after a specified date.

(5)Every summary financial statement shall include a statement of the [F397auditor’s opinion] as to its consistency with the accounts, business statement and directors’ report and its conformity with the requirements of this section and regulations made under it.

(6)The power to make regulations under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(7)The summary financial statement shall be signed by two directors on behalf of the board of directors and by the chief executive of the society.

[F398(8)Not later than 21 days before the date of the annual general meeting at which the accounts and reports are to be considered, the society shall send one copy of the documents to which this subsection applies to every member of the society who is entitled to receive notice of the meeting, and two copies of the documents to which this subsection applies to the [F399FCA and, if the society is a PRA-authorised person, one copy to the PRA] .

(8A)The documents to which subsection (8) applies are—

(a)the summary financial statement, and

(b)where subsection (8) extends under section 78(6) to the [F400auditor’s report] also, the [F400auditor’s report].]

[F401(8AA)The society shall also—

(a)publish the summary financial statement and (where applicable) the auditor's report on a web site, and

(b)ensure that the statement and (where applicable) the report may be accessed on the web site until the publication of the next summary financial statement.]

[F402(8B)Where a copy of the summary financial statement or of the auditor’s report is required to be sent to a member under subsection (8)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified to the society by the member for the purpose; but

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in subsection (8C) are satisfied.

(8C)The conditions of this subsection are satisfied in the case of a copy of a summary financial statement or auditor’s report if—

(a)the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the summary financial statement or auditor’s report in question;

(c)the member is notified F403... of—

(i)the publication of the summary financial statement and (where applicable) the auditor’s report on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the statement and (where applicable) the report may be accessed, and how it may be accessed;

(d)the notification given for the purposes of paragraph (c) is given not less than 21 days before the date of the annual general meeting at which the accounts and reports are to be considered; and

(e)a copy of the statement and (where applicable) the report is published on the web site throughout a period beginning at least 21 days before the date of meeting.

(8D)Where, in a case in which subsection (8C) is relied on for compliance with a requirement of subsection (8)—

(a)a copy of a summary financial statement or auditor’s report is published for a part, but not all, of the period mentioned in subsection (8C)(e), and

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society or the officer to prevent or avoid,

the failure shall not invalidate the proceedings of the meeting at which the accounts and reports are considered, and no offence is committed under subsection (10) by reason of that failure.]

[F404(8E)If, at any time during the period beginning with the publication of the summary financial statement and ending with the publication of the next summary financial statement, an individual for the first time subscribes for shares in the society, the society shall at that time notify the individual of the information in subsection (8C)(c)(i) to (iii).

(8F)In a case where subsection (8E) applies, the society is not required under section 115B (right to hard copy version) to send the individual a version of the summary financial statement or (where applicable) the auditor's report in hard copy form (within the meaning of that section).]

F405(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F405(9A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F405(9B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F405(9C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F405(9D). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F405(9E). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)If default is made by a building society in complying with subsection (8) above, the society shall be liable on summary conviction—

(a)to a fine not exceeding level 5 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

(11)If default is made by a building society in complying with [F406subsection (8AA) or (8E)] above, the society shall be liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

(12)The [F407[F408FCA] shall keep one of the copies] of the summary financial statement received by it under subsection (8) above in the public file of the society.

Textual Amendments

F394Words in s. 76(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 33(1)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xx)

F395Words in s. 76(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 33(1)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xx)

F396Words in s. 76(3) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 168(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F398S. 76(8)(8A) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) for s. 76(8) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 168(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F403Words in s. 76(8C)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 10

F407Words in s. 76(12) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 168(c) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C121S. 76(3): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(1)

Auditors and audit of accountsU.K.

77 Auditors: appointment, tenure F409... , etc.U.K.

(1)Every building society shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.

[F410(2)Schedule 11 to this Act has effect as regards the appointment, resignation and removal of auditors.]

[F411(3)Appointment as auditor of a building society is an appointment as a statutory auditor to which the provisions of Part 42 of the Companies Act 2006 apply.]

Textual Amendments

78 [F412Auditor’s report] .U.K.

(1)The [F413auditor] of a building society shall make a [F414written ] report to the members on the annual accounts which are to be laid before the society at the annual general meeting during [F415his] tenure of office.

(2)The [F416auditor’s report] shall F417. . . be open to inspection by any member [F418at the annual general meeting of the building society].

(3)The [F419auditor shall, in his] report under subsection (1) above, also make a report to the members on—

(a)the annual business statement, and

(b)the directors’ report,

in so far as subsection (7) below requires [F420him] to do so.

[F421(3A)The auditor's report must include—

(a)the identity of the building society whose annual accounts are the subject of the audit,

(b)a description of the annual accounts that are the subject of the audit (including the period covered by those accounts),

(c)a description of the financial reporting framework that has been applied in the preparation of those accounts, and

(d)a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

[F422(4)The report must clearly state the opinion of the auditor as to whether the accounts—

(a)give a true and fair view—

(i)in the case of an individual balance sheet, of the state of affairs of the society as at the end of the financial year,

(ii)in the case of an individual income and expenditure account, of the income and expenditure of the society for the financial year, and

(iii)in the case of group accounts, of the state of affairs as at the end of the financial year and the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society,

(b)have been properly prepared in accordance with the relevant financial reporting framework, and

(c)have been prepared in accordance with the requirements of this Act (and, where applicable, Article 4 of the IAS Regulation).]

(4A)The auditor's [F423report] must—

(a)be either unqualified or qualified,

(b)include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the [F424report],

(c)include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the building society's ability to continue [F425to adopt the going concern basis of accounting], and

(d)identify the auditor's place of establishment.]

(6)If the [F426auditor’s report] includes a qualification of [F426his opinion] that the annual accounts give a true and fair view of the matters specified in subsection [F427(4)(a)] above, [F428subsection (8) of section 76 extends] also to the [F426auditor’s report].

[F429(7)The auditor's report, in so far as it deals with the documents specified in subsection (3) above, must—

(a)state whether, in his opinion, based on the work undertaken in the course of the audit—

(i)the documents have been prepared so as to conform to the requirements of, or made under, sections 74 and 75 respectively,

(ii)the information given in the annual business statement gives a true representation of the matters in respect of which it is given, and

(iii)the information given in the directors' report for the financial year for which the accounts are prepared is consistent with those accounts,

(b)state whether, in the light of the knowledge and understanding of the building society and its environment obtained in the course of the audit, the auditor has identified material misstatements in the directors' report, and

(c)if applicable, give an indication of the nature of each of the misstatements referred to in paragraph (b).]

(8)The [F430auditor’s report] on the annual business statement shall not deal with any matters which, by virtue of section 74(6), are not to be the subject of report under this section.

(9)The [F431auditor] of a building society shall, as regards the statement of particulars of transactions falling within section 65 which the society is to make available for "inspection by members under section 68(3), examine the statement before it is made available to members and make a report to the members on it; and the report shall be annexed to the statement before it is so made available.

(10)The [F432auditor’s report] under subsection (9) above shall state whether in [F433his opinion] the statement contains the particulars required by section 68; and where [F433his opinion] is that it does not, [F434he shall include in his] report, so far as [F435he is] reasonably able to do so, a statement giving the requisite particulars.

[F436(11)Where more than one person is appointed as an auditor—

(a)all the persons appointed must jointly make a report under this section and the report must include a statement as to whether all the persons appointed agree—

(i)on the matters contained in the report, and

(ii)on the statements and indications given under subsection (7); and

(b)if all the persons appointed cannot agree on—

(i)the matters contained in the report, or

(ii)on the statements and indications given under subsection (7),

the report must include the opinions of each person appointed and give reasons for the disagreement.]

Textual Amendments

F417Words in s. 78(2) repealed (11.1.1996) by S.I. 1995/3233, art. 6(a)

F418Words in s. 78(2) inserted (11.1.1996) by S.I. 1995/3233, art. 6(b)

F422S. 78(4) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(2)(a)

F423Word in s. 78(4A) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(2)(b)(i)

F424Word in s. 78(4A)(b) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(2)(b)(ii)

F425Words in s. 78(4A)(c) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(2)(b)(iii)

F427Word in s. 78(6) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(2)(c)

Modifications etc. (not altering text)

C122S. 78 restricted (1. 1. 1993) by S.I. 1992/359, reg. 9(4) (with reg. 2(2))

[F43778A Signature of auditors' reportU.K.

(1)The auditor’s report must state the name of the auditor [F438 (or, where more than one person is appointed as auditor, all of their names) ] and be signed and dated.

(2)Where the auditor is an individual, the report must be signed by him.

F439(2A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Where the auditor is a firm, the report must be signed by the senior statutory auditor in his own name, for and on behalf of the auditor.

[F440(4)Where more than one person is appointed as auditor, the report must be signed by all those appointed.]

Textual Amendments

F439S. 78A(2A) omitted (with effect in accordance with reg. 1(4) of the amending S.I.) by virtue of The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(3)(a)

F440S. 78A(4) inserted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(3)(b)

78B.Senior statutory auditorU.K.

(1)The senior statutory auditor means the individual identified by the firm as senior statutory auditor in relation to the audit in accordance with the standards or guidance mentioned in section 504(1) of the Companies Act 2006.

(2)The person identified as senior statutory auditor must be eligible for appointment as auditor of the building society in question (see Chapter 2 of Part 42 of the Companies Act 2006).

(3)The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his having signed the auditor’s report, subject to any civil liability to which he would not otherwise be subject.

Textual Amendments

78C.Names to be stated in copies of auditor’s report filed or publishedU.K.

(1)The copy of the auditor’s report sent F441... under section 81, and every copy of the auditor’s report that is published by or on behalf of the society, must—

(a)state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, or

(b)if the conditions in section 78D (circumstances in which names may be omitted) are met, state that a resolution has been passed and notified F441... in accordance with that section.

[F442(1A)If more than one [F443person] is appointed as auditor, the reference in subsection (1)(a) to the name of the auditor is to be read as a reference to the names of all the auditors.]

(2)For the purposes of this section a building society is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.

(3)If a copy of the auditor’s report is sent to the [F444FCA] or published without the statement required by this section, an offence is committed by—

(a)the society, and

(b)every officer of the society who is in default.

(4)A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

Textual Amendments

F443Word in s. 78C(1A) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(4)

78D.Circumstances in which names may be omittedU.K.

(1)[F445An ] auditor’s name and, where the auditor is a firm, the name of the person who signed the report as senior statutory auditor, may be omitted from—

(a)the copy of the report sent F446... under section 81, and

(b)published copies of the report,

if the following conditions are met.

(2)The conditions are that the building society—

(a)considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or the senior statutory auditor, or any other person, would be subject to violence or intimidation, has resolved by an ordinary resolution that the name should not be stated, and

(b)has given notice of the resolution to the [F447FCA and, if the society is a PRA-authorised person, the PRA] , stating—

(i)the name of the society,

(ii)the financial year of the society to which the report relates, and

(iii)the name of the auditor and (where the auditor is a firm) the name of the person who signed the report as senior statutory auditor.]

Textual Amendments

79 [F448Auditor’s duties and powers] .U.K.

(1)It is the duty of the [F449auditor] of a building society in preparing [F450his] report to the members under section 78, to carry out such investigations as will enable [F451him] to form an opinion as to the following matters—

(a)whether [F452adequate] accounting records have been kept under section 71,

F453(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)whether the annual accounts are in agreement with the accounting records.

[F454(2)If the auditor is of the opinion that—

(a)[F455adequate] accounting records have not been kept under section 71, or

(b)the annual accounts are not in agreement with the accounting records,

the auditor must state that fact in his report.]

(3)Every auditor of a building society has—

(a)a right of access at all times to the accounting and other records of the society and all other documents relating to its business, and

(b)a right to require from the officers of the society such information and explanations as he thinks necessary for the performance of the duties of the auditors.

(4)Where a building society has a [F456connected undertaking], then—

(a)if the [F456connected undertaking] is a body corporate incorporated in any part of the United Kingdom, it is the duty of the [F456connected undertaking] and [F457its auditor] to give to [F458the society’s auditor] such information and explanation, and such access to documents, as [F459that auditor] may reasonably require for the purposes of [F460his duties as auditor] of the society;

(b)in any other case, it is the duty of the society, if required by [F461its auditor] to do so, to take all such steps as are reasonably open to it to obtain from the [F456connected undertaking] such information and explanation and such access as are mentioned above.

[F462(5)Subsection (4) above applied as regards any body associated with the society which is not a [F463subsidiary undertaking] as it applies as regards a [F463subsidiary undertaking] of the society.]

(6)If the [F464auditor fails] to obtain all the information and explanations and the access to documents which, to the best of [F465his] knowledge and belief, are necessary for the purposes of [F465his] audit, [F466he] shall state that fact in [F465his] report.

[F467(6A)Where more than one person is appointed as auditor, the report must include a statement as to whether all the persons appointed agree on any statements given under subsections (2) and (6) and, if they cannot agree on those statements, the report must include the opinions of each person appointed and give reasons for the disagreement.]

(7)The [F468auditor] of a building society have the right—

(a)to attend any general meeting of the society, and to receive all notices of and other communications relating to any general meeting which any member of the society is entitled to receive, and

(b)to be heard at any meeting which [F469he attends] on any part of the business of the meeting which concerns [F470him as auditor].

(8)If a building society or other body corporate fails to comply with subsection (4) above, the society or other body shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer of the society or, as the case may be, of the other body who is also guilty of the offence; and if an auditor fails without reasonable excuse to comply with paragraph (a) of that subsection he shall be liable, on summary conviction, to such a fine.

(9)If a person who is an officer of a building society or of a body which is a [F471connected undertaking of] the society knowingly or recklessly makes to the [F472auditor] of that or another society or body a statement which—

(a)conveys or purports to convey any information or explanation which the [F473auditor requires, or is entitled to require, as auditor] of the society or other body, as the case may be, and

(b)is false or misleading in a material particular,

that person shall be liable—

(i)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or both; and

(ii)on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum, or both.

Textual Amendments

F452Word in s. 79(1)(a) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(5)

F453S. 79(1)(b) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F455Word in s. 79(2)(a) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(5)

F456Words in s. 79(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 34(1); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxi)

F462S. 79(5) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 34(2), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxi)(cc)(xi)

F463Words in ss. 71-82 (Pt. VIII) substituted by S.I. 1991/1729, art. 3.

F471Words in s. 79(9) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 34(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxi)

Modifications etc. (not altering text)

C123S. 79(1)(2) modified (temp.) by S.I. 1986/2168, art. 12(2)(e)

Procedure on completion of accountsU.K.

80 Signing of balance sheet: documents to be annexed.U.K.

(1)Every balance sheet of a building society shall be signed by two directors on behalf of the board of directors and by the chief executive of the society.

(2)The income and expenditure account, F474. . . and the annual business statement shall be annexed to the balance sheet, and so shall any group accounts; and the auditor’s report shall be attached to it.

(3)The income and expenditure account, F475. . . and the annual business statement shall be approved by the board of directors before the balance sheet is signed on their behalf, and so shall any group accounts; and the date of their approval of those documents shall be endorsed on the balance sheet.

(4)The directors’ report shall be attached to the balance sheet.

(5)If a balance sheet has not been signed as required by subsection (1) above, and a copy of it is issued, circulated or published, the building society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

(6)If any copy of a balance sheet is issued, circulated or published—

(a)without having annexed to it a copy of the income and expenditure account, or

F476(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)without having annexed to it a copy of the annual business statement, or

(d)without having attached to it a copy of the [F477auditor’s report], or

(e)without having attached to it a copy of the directors’ report,

the building society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F474Words in s. 80(2) omitted (23.3.1999) by virtue of S.I. 1999/248, reg. 3, Sch. para. 5(1)

F475Words in s. 80(3) omitted (23.3.1999) by virtue of S.I. 1999/248, reg. 3, Sch. para. 5(2)

F476S. 80(6)(b) omitted (23.3.1999) by virtue of S.I. 1999/248, reg. 3, Sch. para. 5(3)

81 Laying and furnishing accounts, etc., to [F478members [F479, the FCA and the PRA]] .U.K.

(1)The directors of every building society shall lay before the society at the annual general meeting the annual accounts for the last financial year.

(2)The directors of every building society shall send [F480two copies] of the annual accounts for the last financial year to the [F481FCA, and, if the society is a PRA-authorised person, one copy to the PRA,] not later than 14 days before the annual general meeting at which the accounts are to be considered.

(3)Every building society shall, as from the date by which at the latest its directors are required to send them to the [F482FCA and, if the society is a PRA-authorised person, the PRA] , make copies of the annual accounts available free of charge to members of and depositors with the society at every office of the society and, free of charge, shall send copies of those documents to any member or depositor who demands it.

[F483(3A)Where a copy of the annual accounts is required to be sent to a member or depositor under subsection (3)—

(a)they may be sent to him electronically only if they are sent to an electronic address notified to the society by that member or depositor for the purpose; but

(b)the requirement to send them shall also be treated as satisfied if the conditions set out in subsection (3B) are satisfied.

(3B)The conditions of this subsection are satisfied in the case of a copy of the annual accounts if—

(a)the society and the member or depositor have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the annual accounts in question;

(c)within seven days of his demand, the member or depositor is notified F484... of—

(i)the publication of the accounts on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the accounts may be accessed, and how they may be accessed; and

(d)the accounts are published on that web site throughout the period beginning on the date on which the member or depositor is notified in accordance with paragraph (c) and ending with the conclusion of the annual general meeting at which the accounts are to be considered.]

(4)If default is made in complying with subsection (1) or (2) above, every person who was a director at any time during the relevant period shall be liable on summary conviction—

(a)to a fine not exceeding level 5 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues.

(5)If, on demand made of it under subsection (3) above, a building society fails, in accordance with that subsection, to make available or, as the case may be, within seven days of the demand, to send, to a person a copy of the annual accounts the society shall be liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale; and

(b)in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

[F485(5A)Where, in a case in which subsection (3A)(b) is relied on for compliance with a requirement under subsection (3)—

(a)a copy of the annual accounts is published for a part, but not all, of the period mentioned in subsection (3B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society or the officer to prevent or avoid,

no offence is committed under subsection (5) by reason of that failure.]

(6)In subsection (4) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year.

(7)The [F486[F487FCA] shall keep one of the copies] of the annual accounts of a building society received by it under subsection (2) above in the public file of the society.

(8)In this section any reference to the annual accounts includes a reference to the documents annexed or attached to them under section 80.

Textual Amendments

F478Words in s. 81 side-note substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 170(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F480Words in s. 81(2) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 170(b)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F484Words in s. 81(3B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 11

F486Words in s. 81(7) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2(a)(b), 8, 13(1), Sch. 3 para. 170(d) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

[F48881A Requirements in connection with publication of accountsU.K.

(1)If a building society publishes any of its statutory accounts, they must be accompanied by the relevant [F489auditor’s report] under section 78.

(2)A building society that is required to prepare group accounts for a financial year must not publish its statutory individual accounts for that year without also publishing with them its statutory group accounts.

(3)If a building society publishes non-statutory accounts, it must publish with them a statement indicating—

(a)that they are not the society’s statutory accounts,

(b)whether statutory accounts dealing with any financial year with which the non-statutory accounts purport to deal have been prepared,

(c)whether the society’s [F490auditor has] made a report under section 78 on the statutory accounts for any financial year, and

(d)whether any such [F491auditor’s report] —

(i)was qualified or unqualified, or included a reference to any matters to which the [F492auditor] drew attention by way of emphasis without qualifying the report, or

(ii)contained a statement under section 79(6) (failure to obtain necessary information and explanations);

and it must not publish with any non-statutory accounts any [F493auditor’s report] made under section 78.

(4)For the purposes of this section a building society is regarded as publishing a document if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.

(5)References in this section to a building society’s statutory accounts are to its annual accounts as required to be laid before the society under section 81; and references to the publication by a society of “non-statutory accounts” are to the publication of—

(a)any balance sheet or income and expenditure account relating to, or purporting to deal with, a financial year or part of a financial year of the society, or

(b)an account in any form purporting to be a balance sheet or income and expenditure account for the group consisting of the society and its subsidiary undertakings relating to, or purporting to deal with, a financial year or part of a financial year of the society,

otherwise than as part of the society’s statutory accounts or summary financial statement prepared under section 76.

(6)A building society which contravenes any provision of this section, and any officer of it who is in default, is guilty of an offence and liable on summary conviction to a fine not exceeding level 3 on the standard scale.]

Textual Amendments

F488S. 81A inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), arts. 1, 7

[F49481BInterpretation of Part 8U.K.

(1)In this Part—

(2)References in this Part to accounts giving a “true and fair view” are references—

(a)in the case of Building Societies Act individual accounts, to the requirement under section 72B that such accounts give a true and fair view;

(b)in the case of Building Societies Act group accounts, to the requirement under section 72F that such accounts give a true and fair view; and

(c)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.]

Textual Amendments

F494S. 81B inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 6

F495Words in s. 81B(1) substituted (1.4.2007 for specified purposes, 1.11.2007 in so far as not already in force) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2007 (S.I. 2007/126), reg. 1(2), Sch. 6 para. 9

F496Words in s. 81B(1) substituted (29.6.2017 for specified purposes, 3.7.2017 for specified purposes, 31.7.2017 for specified purposes) by The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (S.I. 2017/701), reg. 1(2)(3)(4)(6), Sch. 4 para. 1 (with reg. 7)

F49782. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

Part IXU.K.F498. . . Disputes

Textual Amendments

F498Words in Pt.IX heading repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F49983. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F499S. 83 repealed (1.12.2001) (with saving in S.I. 2001/2967, arts. 1(2), 9(1) (c)) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4, (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F50083A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F500S. 83A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

F50184. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F501S. 84 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

85 Settlement of disputes.U.K.

(1)Schedule 14 to this Act shall have effect for the settlement of certain disputes between a building society and a member, or representative of a member, of the society or, as provided by Part II of the Schedule, between a building society and [F502one or more members of the society or a complainant].

(2)Nothing in that Schedule affects the jurisdiction of any court to hear and determine disputes arising out of any mortgage or any contract other than the rules of a society.

Textual Amendments

F502Words in s. 85(1) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 37; S.I. 1997/1427, art. 2(k)(n)(ix)

Modifications etc. (not altering text)

C124S. 85 excluded (temp.) by S.I. 1986/2168, art. 3(1)(4)

Part XU.K. Dissolution, Winding Up, Mergers and Transfer of Business

Dissolution and winding upU.K.

86 Modes of dissolution and winding up.U.K.

(1)A building society—

(a)may be dissolved by consent of the members, or

(b)may be wound up voluntarily or by the court,

in accordance with this Part; and a building society may not, except where it is dissolved by virtue of section 93(5), 94(10) or 97(9), [F503or following building society insolvency or building society special administration,] be dissolved or wound up in any other manner.

(2)A building society which is in the course of dissolution by consent, or is being wound up voluntarily, may be wound up by the court.

Textual Amendments

87 Dissolution by consent.U.K.

(1)A building society may be dissolved by an instrument of dissolution, with the consent (testified by their signature of that instrument) of three-quarters of the members of the society, holding not less than two-thirds of the number of shares in the society.

(2)An instrument of dissolution under this section shall set out—

(a)the liabilities and assets of the society in detail;

(b)the number of members, and the amount standing to their credit in the accounting records of the society;

(c)the claims of depositors and other creditors, and the provision to be made for their payment;

(d)the intended appropriation or division of the funds and property of the society;

(e)the names of one or more persons to be appointed as trustees for the purposes of the dissolution, and their remuneration.

(3)An instrument of dissolution made with consent given and testified as mentioned in subsection (1) above may be altered with the like consent, testified in the like manner.

(4)The provisions of this Act shall continue to apply in relation to a building society as if the trustees appointed under the instrument of dissolution were the board of directors of the society.

(5)The trustees, within 15 days of the necessary consent being given and testified (in accordance with subsection (1) above) to—

(a)an instrument of dissolution, or

(b)any alteration to such an instrument,

shall give notice to the [F504FCA and, if the society is a PRA-authorised person, the PRA] of the fact and, except in the case of an alteration to an instrument, of the date of commencement of the dissolution, enclosing a copy of the instrument or altered instrument, as the case may be; and if the trustees fail to comply with this subsection they shall each be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(6)An instrument of dissolution under this section, or an alteration to such an instrument, shall be binding on all members of the society as from the date on which the copy of the instrument or altered instrument, as the case may be, is placed in the public file of the society under subsection (10) below.

(7)The trustees shall, within 28 days from the termination of the dissolution, give notice to the [F505FCA and, if the society is a PRA-authorised person, the PRA] of the fact and the date of the termination, enclosing an account and balance sheet signed and certified by them as correct, and showing the assets and liabilities of the society at the commencement of the dissolution, and the way in which those assets and liabilities have been applied and discharged; and, if they fail to do so they shall each be liable on summary conviction—

(a)to a fine not exceeding level 2 on the standard scale, and

(b)in the case of a continuing offence, to an additional fine not exceeding £10 for every day during which the offence continues.

(8)Except with the consent of the [F506appropriate authority] , no instrument of dissolution, or alteration of such an instrument, shall be of any effect if the purpose of the proposed dissolution or alteration is to effect or facilitate the transfer of the society’s engagements to any other society [F507or the transfer of its business to a company].

(9)Any provision in a resolution or document that members of a building society proposed to be dissolved shall accept investments in a company or another society (whether in shares, deposits or any other form) in or towards satisfaction of their rights in the dissolution shall be conclusive evidence of such a purpose as is mentioned in subsection (8) above.

(10)The [F508FCA] shall keep in the public file of the society any notice or other document received by it under subsection (5) or (7) above and shall record in that file the date on which the notice or document is placed in it.

Textual Amendments

F507Words in s. 87(8) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 38; S.I. 1997/1427, art. 2(k)(n)(x)

88 Voluntary winding up.U.K.

(1)A building society may be wound up voluntarily under the applicable winding up legislation if it resolves by special resolution that it be wound up voluntarily[F509, but a resolution may not be passed if—

(a)the conditions in section 90D are not satisfied, or

(b)the society is in building society insolvency or building society special administration.]

[F510(1A)A resolution under subsection (1) shall have no effect without the prior approval of the court.]

(2)A copy of any special resolution passed for the voluntary winding up of a building society"shall be sent by the society [F511to the FCA and, if the society is a PRA-authorised person, the PRA] within 15 days after it is passed; and the [F512FCA must keep a copy] in the public file of the society.

(3)A copy of any such resolution shall be annexed to every copy of the memorandum or of the rules issued after the passing of the resolution.

(4)If a building society fails to comply with subsection (2) or (3) above the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

(5)For the purposes of this section, a liquidator of the society shall be treated as an officer of it.

Textual Amendments

89 Winding up by court: grounds and petitioners.U.K.

(1)A building society may be wound up under the applicable winding up legislation by the court on any of the followng grounds in addition to the grounds referred to or specified in section 37(1), that is to say, if—

(a)the society has by special resolution resolved that it be wound up by the court;

(b)the number of members is reduced below ten;

(c)the number of directors is reduced below two;

(d)being a society registered as a building society under this Act or the repealed enactments, the society has not been [F513given permission under [F514Part 4A] of the Financial Services and Markets Act 2000 to accept deposits] and more than three years has expired since it was so registered;

[(e)the society’s permission under [F514Part 4A] of the Financial Services and Markets Act 2000 to accept deposits has been cancelled (and no such permission has subsequently been given to it);]

(f)the society exists for an illegal purpose;

(g)the society is unable to pay its debts; or

(h)the court is of the opinion that it is just and equitable that the society should be wound up.

(2)Except as provided by subsection (3) below, section 37 or the applicable winding up legislation, a petition for the winding up of a building society may be presented by—

[F515(a)the FCA, after consulting the PRA if the society is a PRA-authorised person,

(aa)if the society is a PRA-authorised person, the PRA, after consulting the FCA,]

(b)the building society or its directors,

(c)any creditor or creditors (including any contingent or any prospective creditor), or

(d)any contributory or contributories,

or by all or any of those parties, together or separately.

(3)A contributory may not present a petition unless either—

(a)the number of members is reduced below ten, or

(b)the share in respect of which he is a contributory has been held by him, or has devolved to him on the death of a former holder and between them been held, for at least six months before the commencement of the winding up.

(4)For the purposes of this section, in relation to a building society,

F516(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F517(b)the reference to its existing for an illegal purpose includes a reference to its existing after it has ceased to comply with the requirement imposed by section 5(1)(a) (purpose or principal purpose).]

(5)In this section, “contributory” has the same meaning as in paragraph 9(2) or, as the case may be, paragraph 37(2) of Schedule 15 to this Act.

Textual Amendments

F513S. 89(1)(e) and words in s. 89(1)(d) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 175(a)(i)(ii) (with art. 13(3), Sch. 5) S.I. 2001/3538, art. 2(a)

F516S. 89(4)(a) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5 and with saving in S.I. 2001/2967, arts. 1(2), 9(1)(c)); S.I. 2001/3538, art. 2(1)

F517S. 89(4)(b) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 39; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxiii)

[F51889A.Building society insolvency as alternative orderU.K.

(1)On a petition for a winding up order or an application for an administration order in respect of a building society the court may, instead, make a building society insolvency order (under section 94 of the Banking Act 2009 as applied by section 90C below).

(2)A building society insolvency order may be made under subsection (1) only—

(a)on the application of the [F519appropriate authority] made with the consent of the Bank of England, or

(b)on the application of the Bank of England.]

Textual Amendments

90 Application of winding up legislation to building societies.U.K.

(1)In this section “the companies winding up legislation” means the enactments applicable in relation to England and Wales, Scotland or Northern Ireland which are specified in paragraph 1 of Schedule 15 to this Act (including any enactment which creates an offence by any person arising out of acts or omissions occurring before the commencement of the winding up).

(2)In its application to the winding up of a building society, by virtue of section 88(1) or 89(1), the companies winding up legislation shall have effect with the modifications effected by Parts I to III of Schedule 15 to this Act; and the supplementary provisions of Part IV of that Schedule shall also have effect in relation to such a winding up.

(3)In sections 37, 88, 89 and 103, “the applicable winding up legislation” means the companies winding up legislation as so modified.

Modifications etc. (not altering text)

C125S. 90(3) excluded by S.I. 1986/2168, art. 11

[F52090A Application of other companies insolvency legislation to building societies.U.K.

For the purpose of—

(a)enabling voluntary arrangements to be approved in relation to building societies,

(b)enabling administration orders to be made in relation to building societies, and

(c)making provision with respect to persons appointed in England and Wales [F521, Scotland] or Northern Ireland as receivers and managers [F522, or receivers,] of building societies’ property,

the enactments specified in paragraph 1(2) of Schedule 15A to this Act shall apply in relation to building societies with the modifications specified in that Schedule.]

Textual Amendments

F520S. 90A inserted (1.12.1997) by 1997 c. 32, s. 39(1); S.I. 1997/2668, art. 2, Sch. Pt. I(i)

F521Word in s. 90A(c) inserted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 3(a)

F522Words in s. 90A(c) inserted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 3(b)

Modifications etc. (not altering text)

C126S. 90A applied (with modifications) (7.4.2010) by The Building Societies (Financial Assistance) Order 2010 (S.I. 2010/1188), arts. 1(2), 10 (as amended (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), art. 1(1)(2), 5(2))

[F52390BPower to alter priorities on dissolution and winding upU.K.

(1)The Treasury may by order make provision for the purpose of ensuring that, on the winding up, or dissolution by consent, of a building society, any assets available for satisfying the society's liabilities to creditors or to shareholders are applied in satisfying those liabilities pari passu.

(2)Liabilities to creditors do not include—

(a)liabilities in respect of subordinated deposits;

(b)liabilities in respect of preferential debts;

(c)any other category of liability which the Treasury specifies in the order for the purposes of this paragraph.

(3)Liabilities to shareholders do not include liabilities in respect of deferred shares.

(4)A preferential debt is a debt which constitutes a preferential debt for the purposes of any of the enactments specified in paragraph 1 of Schedule 15 to this Act (or which would constitute such a debt if the society were being wound up).

(5)An order under this section may—

(a)make amendments of this Act;

(b)make different provision for different purposes;

(c)make such consequential, supplementary, transitional and saving provision as appears to the Treasury to be necessary or expedient.

(6)The power to make an order under this section is exercisable by statutory instrument but no such order may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.]

Textual Amendments

[F52490C.Application of bank insolvency and administration legislation to building societiesU.K.

(1)Parts 2 (Bank Insolvency) and 3 (Bank Administration) of the Banking Act 2009 shall apply in relation to building societies with any modifications specified in an order made under section 130 or 158 of that Act and with the modifications specified in subsection (2) below.

(2)In the application of Parts 2 and 3 of that Act to building societies—

(a)references to “bank” (except in the term “bridge bank” and the terms specified in paragraphs (b) and (c)) have effect as references to “building society”;

(b)references to “bank insolvency”, “bank insolvency order”, “bank liquidation” and “bank liquidator” have effect as references to “building society insolvency”, “building society insolvency order”, “building society liquidation” and “building society liquidator”;

(c)references to “bank administration”, “bank administration order” and “bank administrator” have effect as references to “building society special administration”, “building society special administration order” and “building society special administrator”.]

Textual Amendments

[F52590D.Notice to the [F526FCA and the PRA] of preliminary stepsU.K.

(1)An application for an administration order in respect of a building society may not be determined unless the conditions below are satisfied.

(2)A petition for a winding up order in respect of a building society may not be determined unless the conditions below are satisfied.

(3)A resolution for voluntary winding up of a building society may not be passed unless the conditions below are satisfied.

(4)An administrator of a building society may not be appointed unless the conditions below are satisfied.

(5)Condition 1 is that the [F527FCA [F528, the Bank of England] and, if the society is a PRA-authorised person, the PRA have] been notified—

(a)by the applicant for an administration order, that the application has been made,

(b)by the petitioner for a winding up order, that the petition has been presented,

(c)by the building society, that a resolution for voluntary winding up may be passed, or

(d)by the person proposing to appoint an administrator, of the proposed appointment.

(6)Condition 2 is that a copy of the notice complying with Condition 1 has been filed with the court (and made available for public inspection by the court).

(7)Condition 3 is that—

(a)the period of [F5297 days] , beginning with the day on which the notice is received, has ended, or

[F530(b)both—

(i)the Bank of England has informed the person who gave the notice that it does not intend to exercise a stabilisation power under Part 1 of the Banking Act 2009 in relation to the building society (and condition 5 has been met, if applicable), and

(ii)each of the PRA and the Bank of England has informed the person who gave the notice that it does not intend to apply for a building society insolvency order (under section 95 of the Banking Act 2009 as applied by section 90C).]

(8)Condition 4 is that no application for a building society insolvency order is pending.

[F531(8A)Condition 5—

(a)applies only if a resolution instrument has been made under section 12A of the Banking Act 2009 with respect to the building society in the three months ending with the date on which the Bank of England receives the notification under Condition 1, and

(b)is that the Bank of England has informed the person who gave the notice that it consents to the insolvency procedure to which the notice relates going ahead.]

(9)Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a building society’s creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading) or Article 178 (wrongful trading) of the Insolvency (Northern Ireland) Order 1989 as applied in relation to building societies by section 90 of, and Schedule 15 to, this Act.

(10)Where [F532the society is a PRA-authorised person and] [F533notice has been given under Condition 1] —

F534(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)the [F535PRA] shall inform the person who gave the notice, within the period in Condition 3(a), whether it intends to apply for a building society insolvency order, F536...

(c)if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a)[F537; and

(d)if Condition 5 applies, the Bank of England must, within the period in Condition 3(a), inform the person who gave the notice whether or not it consents to the insolvency procedure to which the notice relates going ahead.]

[F538(11)Where the society is not a PRA-authorised person and [F539notice has been received under Condition 1]

F540(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b)if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a)][F541; and

(c)if Condition 5 applies, the Bank of England must, within the period in Condition 3(a), inform the person who gave the notice whether or not it consents to the insolvency procedure to which the notice relates going ahead.]

[F542(12)References in this section to the insolvency procedure to which the notice relates are to the procedure for the determination, resolution or appointment in question (see subsections (1) to (4)).]

Textual Amendments

90E.Disqualification of directorsU.K.

(1)In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986.

(2)In the Disqualification Act—

(a)a reference to liquidation includes a reference to building society insolvency and a reference to building society special administration,

(b)a reference to winding up includes a reference to making or being subject to a building society insolvency order and a reference to making or being subject to a building society special administration order,

(c)a reference to becoming insolvent includes a reference to becoming subject to a building society insolvency order and a reference to becoming subject to a building society special administration order, and

(d)a reference to a liquidator includes a reference to a building society liquidator and a reference to a building society special administrator.

[F543(3)For the purposes of the application of section 7A of the Disqualification Act (office-holder’s report on conduct of directors) to a building society which is subject to a building society insolvency order—

(a)the “office-holder” is the building society liquidator,

(b)the “insolvency date” means the date on which the building society insolvency order is made, and

(c)subsections (9) to (11) are omitted.

(4)For the purposes of the application of that section to a building society which is subject to a building society special administration order—

(a)the “office-holder” is the building society special administrator,

(b)the “insolvency date” means the date on which the building society special administration order is made, and

(c)subsections (9) to (11) are omitted.]

(5) In the application of this section to Northern Ireland, references to the Disqualification Act are to the Company Directors Disqualification (Northern Ireland) Order 2002 and [F544in subsections (3) and (4)—

(a)the reference to section 7A of the Disqualification Act is a reference to Article 10A of that Order (office-holder’s report on conduct of directors), and

(b)the reference to subsections (9) to (11) of that section is a reference to paragraphs (9) to (11) of that Article.]]

Textual Amendments

91 Power of court to declare dissolution of building society void.U.K.

(1)Where a building society has been dissolved under section 87 or following a winding up, [F545building society insolvency or building society special administration,] the High Court or, in relation to a society whose principal office was in Scotland, the Court of Session, may, at any time within 12 years after the date on which the society was dissolved, make an order under this section declaring the dissolution to have been void.

(2)An order under this section may be made, on such terms as the court thinks fit, on an application by the trustees under section 87 or the liquidator, [F546building society liquidator or building society special administrator,] as the case may be, or by any other person appearing to the Court to be interested.

(3)When an order under this section is made, such proceedings may be taken as might have been taken if the society has not been dissolved.

(4)The person on whose application the order is made shall, within seven days of its being so made, or such further time as the Court may allow, [F547furnish the FCA and, if the society is a PRA-authorised person, the PRA] with a copy of the order; and the [F548FCA must keep a copy] in the public file of the society.

(5)If a person fails to comply with subsection (4) above, he shall be liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale, and

(b)in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues.

Textual Amendments

[F54992 Supplementary.U.K.

Where at any time a building society is being wound up or dissolved by consent, [F550or is in building society insolvency or building society special administration,] a borrowing member shall not be liable to pay any amount other than one which, at that time, is payable under the mortgage or other security by which his indebtedness to the society in respect of the loan is secured.]

Textual Amendments

F549S. 92 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 40; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxiv)

[F551New business]U.K.

Textual Amendments

F551S. 92A and cross-heading preceding it inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 29, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(u)

[F55292A Acquisition or establishment of a business.U.K.

(1)A building society—

(a)in order to acquire, or allow a subsidiary undertaking to acquire, a business to which subsections (3) and (4) below apply; or

(b)in order to establish, or allow such an undertaking to establish, a business to which subsections (3) and (5) below apply,

must resolve so to do by an ordinary resolution; but a failure to comply with this subsection shall not invalidate any transaction or other act.

(2)In order to be effective for the purposes of subsection (1) above, an ordinary resolution of a building society must be passed by a majority of the members of the society entitled to vote on such a resolution and voting either—

(a)in person or by proxy on a poll on the resolution at a meeting of the society; or

(b)in a postal [F553or electronic] ballot on the resolution;

and in a case falling within paragraph (a) above, a form for the appointment of a proxy shall be sent to each person entitled to notice of the meeting.

(3)This subsection applies to a business which is proposed to be acquired or established if, in the opinion of the board of directors of the society—

(a)the greater part of the income of the business is or will be derived from activities having no connection with loans secured on residential property;

(b)the greater part of the resources of the business are or will be devoted to such activities; or

(c)the greater part of the business consists or will consist of such activities.

(4)This subsection applies to a business which is proposed to be acquired if X is not less than 15 per cent of Y where—

X = the amount or value of the consideration to be given for the shares, voting rights or assets proposed to be acquired;

Y = the amount of the society’s own funds as at the relevant date.

(5)This subsection applies to a business which is proposed to be established if X is not less than 15 per cent of Y where—

X = the aggregate of the following as estimated by the society, namely—

(a)the cost of acquiring, developing, adapting or repairing any premises required for the purposes of the business;

(b)the initial cost of acquiring any plant or equipment, or any intellectual property, so required;

(c)the initial cost of employing or training staff so required;

(d)the cost of obtaining any professional advice required in connection with the establishment of the business;

(e)any other non-recurring items of expenditure to be incurred in that connection; and

(f)in the case of a business proposed to be established by a subsidiary undertaking, the amount of any capital to be provided by the society which will not be used for defraying items of expenditure falling within the foregoing paragraphs;

Y = the amount of the society’s own funds as at the relevant date.

(6)Where a business is proposed to be acquired or established by a syndicate whose members include a building society or subsidiary undertaking—

(a)subsection (1) above shall have effect as if the business were proposed to be acquired or (as the case may be) established by the society; and

(b)whichever of subsections (4) and (5) above is applicable shall have effect as if X were only so much of X as is referable to participation in the syndicate by the society or undertaking.

(7)For the purposes of subsections (1)(a) and (4) above, two or more proposed acquisitions by a building society or subsidiary undertaking which will form part of a larger acquisition or series of acquisitions shall be treated as a single acquisition.

(8)Nothing in this section shall apply in relation to a building society in so far as it undertakes, in accordance with section 94 and Schedule 16 to this Act, to fulfil engagements transferred to it in accordance with that section and that Schedule.

(9)In this section—

(10)The [F554Treasury may] by order substitute for the percentage specified in subsection (4) or (5) above such other percentage as appears to [F555them] to be appropriate; and an order under this subsection may make such supplementary, transitional and saving provision as appears to the [F556Treasury] to be necessary or expedient.

(11)The [F557Treasury may] by order vary subsections (5) and (9) above by adding to or deleting from them any provision or by varying any provision contained in them; and an order under this subsection may make—

(a)different provisions for different cases or purposes; and

(b)such supplementary, transitional and saving provision as appears to the [F558Treasury] to be necessary or expedient.

(12)The power to make an order under subsection (10) or (11) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F552S. 92A and cross-heading preceding it inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 29, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(u)

F554Words in s. 92A(10) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 176(a)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F555Word in s. 92A(10) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/1149, art. 13(1), Sch. 3 Pt. II para. 176(a)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F556Word in s. 92A(10) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/1149, art. 13(1), Sch. 3 Pt. II para. 176(a)(iii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F557Words in s. 92A(11) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 176(b)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F558Word in s. 92A(11)(b) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II para. 176(b)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C127S. 92A(10)(11): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III (art. 5)

MergersU.K.

93 Amalgamations.U.K.

(1)Any two or more buildings societies desiring to amalgamate may do so by establishing a building society as their successor in accordance with this section and Schedule 16 to this Act

(2)In order to establish a building society as their successor the societies desiring to amalgamate must—

[F559(a)agree the purpose or principal purpose of their successor to be that of making loans which are secured on residential property and are funded substantially by its members, and agree upon the extent of its powers, in a memorandum which complies with the requirements of Schedule 2 to this Act;]

(b)agree upon the rules for the regulation of their successor which comply with the requirements of that Schedule;

[F560(c)each approve the terms of the amalgamation by two resolutions which also approve the memorandum and the rules of their successor and of which—

(i)one is passed as a shareholding members’ resolution, and

(ii)the other is passed as a borrowing members’ resolution,

in accordance with the applicable provisions of that Schedule;]

(d)make a joint application to the [F561appropriate authority] for confirmation of the amalgamation and send to the [F562[F563FCA and, if the society is a PRA-authorised person, the PRA] three] copies of the rules and of the memorandum, each copy signed by the secretary of each of the societies.

(3)If the [F564appropriate authority] confirms the amalgamation under section 95, [F565and] [F566the FCA] is satisfied, as regards the proposed successor, of the matters relating to its rules, its purpose and powers and its name as to which it must, under paragraph 1 of Schedule 2 to this Act, be satisfied before it registers a society, [F567the FCA must] —

(a)register the successor society,

(b)issue to it a certificate of incorporation, specifying a date (“the specified date”) as from which the incorporation takes effect,

(c)retain and register one copy of the memorandum and of the rules,

(d)return another copy to the secretary of the successor, together with a certificate of registration, and

(e)keep another copy, together with a copy of the certificate of incorporation and of the certificate of registration of the memorandum and the rules, in the public file of the successor society.

(4)On the specified date all the property, rights and liabilities of each of the societies whose amalgamation was confirmed by the [F568appropriate authority] (whether or not capable of being transferred or assigned) shall by virtue of this subsection be transferred to and vested in the society so incorporated as their successor.

(5)On the specified date, each of the societies to which the successor succeeds shall be dissolved by virtue of this subsection; but the transfer effected by subsection (4) above shall be deemed to have been effected immediately before the dissolution.

[F569(6)If, on the specified date, each of the societies whose amalgamation was confirmed by the [F570appropriate authority] has permission under [F571Part 4A] of the Financial Services and Markets Act 2000 to accept deposits, the [F570appropriate authority] shall, with effect from that date, give their successor such permission under that Part as it considers appropriate, and shall notify the successor of the permission by giving the successor a decision notice.

(6A)Part XXVI of the Financial Services and Markets Act 2000 applies to a decision notice given under this section as it applies to a decision notice given under [F572subsection (5) of section 55V of that Act by virtue of paragraph (a) or (b) of that subsection] , except that—

(a)section 390 (final notices) does not apply, and

(b)for the purposes of section 391 (publication) the decision notice is to be treated as if it were a final notice rather than a decision notice.

(6B)The giving of permission pursuant to subsection (6) above is to be treated for the purposes of [F573section 55Z3] of the Financial Services and Markets Act 2000 (right to refer matters to the [F574Upper Tribunal]) as if it were the determination of an application made by the successor under [F575Part 4A] of that Act, and Part IX of that Act (hearings and appeals) applies accordingly (but subject to subsection (6C) below).

(6C)In the application of Part IX of that Act by virtue of subsection (6B) above, [F576section 133A(4)] (which prevents F577... action specified in a decision notice [F578from being taken] until after any reference and appeal) is omitted.]

F579(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F560S. 93(2)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 4(4)1(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxv)

F562Words in s. 93(2)(d) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II para. 177(a)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F565Word in s. 93(3) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II para. 177(b)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F569S. 93(6)-(6C) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 177(d) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F579S. 93(7) repealed (1.12.2001) (with saving in S.I. 2001/2967, arts. 1(2), 9(1)(c)) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4; S.I. 2001/3538, art. 2(1)

Modifications etc. (not altering text)

C128Ss. 93–96 excluded by S.I. 1986/2168, art. 9(2)(b)(3)

94 Transfer of engagements.U.K.

(1)A building society may, in accordance with this section and Schedule 16 to this Act, transfer its engagements to any extent to another building society which, in accordance with this section and that Schedule, undertakes to fulfil the engagements.

(2)A building society, in order to transfer its engagements, must resolve to do so by two resolutions, of which one is passed as a [F580shareholding members’ resolution] and the other as a borrowing members’ resolution in accordance with the applicable provisions of Schedule 2.

(3)A building society, in order to transfer some but not all of its engagements to its members in respect of shares held by them (with or without other engagements) must, in addition to resolving to transfer the engagements by the two resolutions required by subsection (2) above, resolve to do so by an affected shareholders’ resolution.

(4)For the purposes of this section in its application to a transfer by a society of engagements in respect of some shares in the society, an “affected shareholders’ resolution” is a resolution passed by a majority of the holders of those shares who, under the rules of the society, would be entitled to vote on a [F580shareholding members’ resolution], disregarding for this purpose any shares of theirs in respect of which the society’s engagements are not to be transferred.

(5)A building society, in order to undertake to fulfil the engagements of another society, must resolve to do so—

(a)by two resolutions, of which one is passed as a [F580shareholding members’ resolution] and the other as a borrowing members’ resolution in accordance with the applicable provisions of Schedule 2; or

(b)by a resolution of the board of directors, if the [F581appropriate authority] consents to that mode of proceeding.

(6)The extent of the transfer, as so resolved by the society making and the society taking the transfer, shall be recorded in an instrument of transfer of engagements.

(7)A transfer of engagements between building societies shall be of no effect unless—

(a)the transfer is confirmed by the [F582appropriate authority] under section 95; and

(b)a registration certificate is issued in respect of the transfer under subsection (8) below.

(8)Where the [F583appropriate authority] confirms a transfer of engagements between building societies, [F584the FCA must] —

(a)register a copy of the instrument of transfer of engagements; and

(b)issue a registration certificate to the building society taking the transfer;

and, on such date as is specified in the certificate, the property, rights and liabilities of the society transferring its engagements (whether or not capable of being transferred or assigned) shall, by virtue of this subsection, be transferred to and vested in the society taking the transfer to the extent provided in the instrument of transfer of engagements.

(9)The [F585FCA] shall keep a copy of the instrument and of the registration certificate issued under subsection (8) above in the public file of the building society taking the transfer.

(10)Where all its engagements have been transferred, the society shall, by virtue of this subsection, be dissolved on the date specified in the registration certificate; but the transfer effected by subsection (8) above shall be deemed to have been effected immediately before the dissolution.

Textual Amendments

F580Words in s. 94(2)(4)(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 42; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxvi)

Modifications etc. (not altering text)

C129Ss. 93–96 excluded by S.I. 1986/2168, art. 9(2)(b)(3)

95 Mergers; provisions supplementing ss. 93 and 94.U.K.

(1)Part I of Schedule 16 to this Act shall have effect for imposing on building societies proposing to amalgamate or to transfer or undertake engagements requirements to issue statements to their members relating to the proposed amalgamation or transfer.

(2)Part II of Schedule 16 to this Act shall have effect for imposing requirements for notification by a building society, to its members and to the [F586appropriate authority] of the receipt by the society of proposals for a transfer of engagements or an amalgamation.

(3)Where application is made to the [F586appropriate authority] for confirmation of an amalgamation or transfer of engagements it shall, except as provided in [F587subsections (4) to (6)] below, confirm the amalgamation or transfer; and Part III of Schedule 16 to this Act shall have effect with respect to the procedure on an application for such confirmation.

(4)Subject to subsection (5) below, the [F586appropriate authority] shall not confirm an amalgamation or transfer of engagements if it considers that—

(a)some information material to the members’ decision about the amalgamation or transfer was not made available to all the members eligible to vote; or

(b)the vote on any resolution approving the amalgamation or transfer does not represent the views of the members eligible to vote; or

(c)some relevant requirement of this Act or the rules of any of the societies participating in the amalgamation or transfer was not fulfilled or not fulfilled as regards that society.

(5)The [F586appropriate authority] shall not be precluded from confirming an amalgamation or transfer of engagements by virtue only of the non-fulfilment of some relevant requirement of this Act or the rules of a society if it appears to the [F586appropriate authority] that it could not have been material to the members’ decision about the amalgamation or transfer and the [F586appropriate authority] gives a direction that the failure is to be disregarded for the purposes of this section.

(6)Where the [F586appropriate authority] would be precluded from confirming an amalgamation or transfer of engagements by reason of any of the defects specified in paragraphs (a), (b) and (c) of subsection (4) above, it may direct any building society concerned—

(a)to take such steps to remedy the defect or defects, including the calling of a further meeting, as it specifies in the direction; and

(b)to furnish the [F586appropriate authority] with evidence satisfying it that it has done so;

and, if the [F586appropriate authority] is satisfied that the steps have been taken and the defect or defects has or have been substantially remedied; the [F586appropriate authority] shall confirm the amalgamation or transfer; but, if it is not so satisfied, it shall refuse its confirmation.

[F588(6A)The PRA must consult the FCA before confirming an amalgamation or transfer, or giving a direction, under this section.

(6B)The PRA must—

(a)notify the FCA it if confirms an amalgamation or transfer; and

(b)send the FCA a copy of any direction it gives.]

F589(7). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F589(8). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F589(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(10)A failure to comply with a relevant requirement of this Act or any rules of a society shall not invalidate an amalgamation or transfer of engagements; but, if a society fails without reasonable excuse to comply with such a requirement the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(11)In this section “relevant requirement”, with reference to this Act or the rules of a society, means a requirement of section 93 or 94 or this section or of Schedule 16 to this Act or of any rules prescribing the procedure to be followed by the society in approving or effecting an amalgamation or transfer of engagements.

Textual Amendments

F587Words in s. 95(3) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 43(1); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(ix)

Modifications etc. (not altering text)

C130Ss. 93–96 excluded by S.I. 1986/2168, art. 9(2)(b)(3)

96 Mergers: compensation for loss of office and bonuses to members.U.K.

(1)The terms of an amalgamation of or transfer of engagements between building societies may include provision for compensation to be paid by a society to or in respect of any director or other officer of that or any other society for loss of office or diminution of emoluments attributable to the amalgamation or transfer, but the provision must be authorised as follows that is to say—

(a)except in so far as paragraph (b) below applies, the provision for such compensation to be paid by a society must be approved by the society by a resolution passed as a special resolution, not being [F590one of the two resolutions] required by section 93(2)(c) or 94(2) for the approval of the other terms of the amalgamation or transfer;

(b)if regulations are made under subsection (2) below authorising payments of such compensation within prescribed limits and the provision for such compensation includes only payments of amounts not exceeding the prescribed limits, the passing of [F591the two resolutions] approving the terms of the amalgamation or transfer is sufficient authority for their payment.

(2)The [F592Treasury] may by regulations authorise payments by building societies of compensation to directors or other officers for loss of office or diminution of emoluments attributable to amalgamations of, or transfers of engagements between, societies subject to limits specified in or determinable under the regulations and the regulations may make different provision for different classes of person.

(3)Nothing in subsection (1) or (2) above prevents a director or other officer from receiving payments from societies which, in the aggregate, exceed any limit applicable to him under subsection (2) above if the excess payment is included in provision approved as required by subsection (1)(a) above; but if any payment is received which has not been authorised under paragraph (a) or (b) of that subsection it shall be repaid.

(4)The terms of an amalgamation of, or transfer of engagements between, building societies may include provision for part of the funds of one or more of the participating societies to be distributed in consideration of the amalgamation or transfer among any of the members of the participating societies, but the provision must be authorised as follows, that is to say—

(a)subject to paragraph (b) below, the provision for such a distribution by a society shall not exceed the limits prescribed by regulations under subsection (5) below and the distribution must be approved by [F593each of the two resolutions] giving the approval of the society to the terms of the amalgamation or transfer;

(b)if the provision for such a distribution by a society exceeds the prescribed limits, it must be approved by [F593each of the two resolutions] of that society and each of the other societies particpating in the amalgamation or transfer by which each approved the terms of the amalgamation or transfer.

(5)The [F592Treasury] shall by regulations authorise distributions of funds to members by building societies particpating in amalgamations or transfers of engagements subject to limits specified in or determinable under the regulations and the regulations may make different provision for different circumstances.

(6)Where the terms of a transfer of engagements include provision for a distribution of the funds of the society transferring or the society undertaking the engagements and the society undertaking the engagements applies to the [F594appropriate authority] for its consent to the society’s approving the transfer by a resolution of the board of directors instead of [F595the two resolutions required by section 94(5)(a)], the [F594appropriate authority] shall not give its consent unless it is satisfied that the distribution proposed to be made by each society will not exceed the prescribed limits.

(7)The power to make regulations under subsection (2) or (5) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8)In this section—

Textual Amendments

F590Words in s. 96(1)(a) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 44(1)(a); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(x)

F591Words in s. 96(1)(b) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 44(1)(b); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(x)

F592Words in s. 96(2)(5) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 180(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F593Words in s. 96(4) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 44(2); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(x)

F595Words in s. 96(6) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 44(3); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(x)

F596Words in s. 96(8) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 44(4); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(x)

Modifications etc. (not altering text)

C131Ss. 93–96 excluded by S.I. 1986/2168, art. 9(2)(b)(3)

C132S. 96(2)(5): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S. I.2001/2617, art. 4(1), Sch. 1 Part III (with art. 5); S.I. 2001/3538, art. 2(a)

Transfer of business to commercial companyU.K.

97 Transfer of business to commercial company.U.K.

(1)A building society may, in accordance with this section and the other applicable provisions of this Act, transfer the whole of its business to a company (its “successor”).

(2)The applicable provisions of this Act other than this section are section 98, section 99, [F597section 99A,] section 100, section 101, section 102 [F598sections 102B, 102C and 102D], paragraph 30 of Schedule 2 and Schedule 17.

(3)The successor may be a company formed by the society wholly or partly" for the purpose of assuming and conducting the society’s business in its place or an existing company which is to assume and conduct the society’s business in its place; [F599and for the purposes of the transfer the society may, notwithstanding anything in section 18, form, or acquire and hold shares in, a company whose objects extend to the carrying on of activities which the building society has no power to carry on.]

(4)In order to transfer its business to its successor a building society must—

(a)in the case of a specially formed company, secure that it is formed having articles of association with the requisite protective provisions;

(b)agree conditionally with its successor in a transfer agreement on the terms of the transfer which, in so far as they are regulated terms, comply with section 99, section 100 and transfer regulations;

(c)approve the transfer and the terms of the transfer by the requisite transfer resolutions, that is to say, resolutions passed by the members of the society in accordance with paragraph 30 of Schedule 2 to this Act; and

(d)obtain the confirmation of the [F600appropriate authority] of the transfer and its terms.

(5)In so far as the transfer agreement made between the society and its successor provides for rights to be conferred on members or officers of the society, whether or not in pursuance of regulated terms, the members or officers shall, in relation to those provisions, be treated as if they had been parties to the agreement and the rights shall be enforceable accordingly.

(6)If the [F601appropriate authority] confirms the transfer under section 98 then, on the vesting date, all the property, rights and liabilities of the society making the transfer (whether or not capable of being transferred or assigned), except any shares in its successor, shall by virtue of this subsection and in accordance with transfer regulations be transferred to and vested in the successor.

(7)Where a building society continues to hold shares in its successor after the vesting date, the consideration (if any) for the disposal of the shares together with any other property, rights or liabilities of the society acquired or incurred after that date shall, by virtue of this subsection, be transferred to and vested in its successor on the date specified for its dissolution under subsection (10) below.

(8)A building society which has obtained confirmation of the transfer of its business shall [F602send to each of the FCA and, if the society is a PRA-authorised person, the PRA] notice of the date which is to be the vesting date and shall do so not later than seven days before that date; and the [F603FCA must] record the date and, if a later date is notified under subsection (10) below, that date, in the public file of the society.

(9)Except where notice is given under subsection (10) below, a building society which, under this section, transfers its business to its successor shall, by virtue of this subsection, be dissolved on the vesting date; but the transfer effected by subsection (6) above shall be deemed to have been effected immediately before the dissolution.

(10)A building society may, for the purpose of facilitating the disposal of shares in its successor, include in the notice of the vesting date under subsection (8) above notice of a later date for the dissolution of the society; and if it does so, the society shall by virtue of this subsection be dissolved on that date instead of the vesting date, but the transfer effected by subsection (7) above shall be deemed to have been effected immediately before the dissolution.

(11)As from the vesting date, a society which has given notice under subsection (10) above shall cease to transact any business except such as is necessary for the purpose of securing the disposal of the society’s holding of shares in its successor.

(12)In this section, and the other applicable provisions of this Act—

[F607(13)References in this section, and the other applicable provisions of this Act, to a company include references to a body corporate which—

(a)is incorporated in an EEA State other than the United Kingdom; and

(b)has power under its constitution to offer its shares or debentures to the public;

and in this subsection “EEA State” [F608has the meaning given by Schedule 1 to the Interpretation Act 1978 (c. 30)].]

Textual Amendments

F597Words in s. 97(2) inserted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 45(1); S.I. 1997/1427, art. 2(f)

F598Words in s. 97(2) inserted (21.3.1997 with application as mentioned in s. 2(2) of the amending Act) by 1997 c. 41, s. 1(2)

F599Words in s. 97(3) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 45(2), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxvii)(cc)(xiii)

F606Definition in s. 97(12) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 45(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxvii)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

98 Transfers of business: supplementary provisions.U.K.

(1)Part I of Schedule 17 to this Act shall have effect for imposing on a building society proposing to transfer its business to a company an obligation to issue statements [F609or summaries] to its members relating to the proposed transfer.

[F610(1A)Part IA of that Schedule shall have effect for imposing requirements for notification by a building society, to its members and to the [F611FCA and, if the society is a PRA-authorised person, the PRA] , of the receipt by the society of a proposal for the transfer of the whole of its business to a company.]

(2)Where application is made to the [F612appropriate authority] for confirmation of a transfer of business to a company it shall, except as provided in subsections (3) to (5) below, confirm the transfer; and Part II of that Schedule shall have effect with respect to the procedure on an application for such confirmation.

(3)Subject to subsection (4) below, the [F613appropriate authority] shall not confirm a transfer of business if it considers that—

(a)some information material to the members’ decision about the transfer was not made available to all the members eligible to vote; or

(b)the vote on any resolution approving the transfer does not represent the views of the members eligible to vote; or

(c)there is a substantial risk that the successor will not [F614have—

(i)such permission under [F615Part 4A] of the Financial Services and Markets Act 2000, or

(ii)such permission under paragraph 15 of Schedule 3 to that Act (as a result of qualifying for authorisation under paragraph 12 of that Schedule),

as will enable it to carry on the business which it will have as a result of the transfer without being taken (by virtue of section 20 of that Act) to have contravened a requirement imposed on it by the [F613appropriate authority] under that Act; or]

(d)some relevant requirement of this Act or the rules of the society was not fulfilled.

(4)The [F616appropriate authority] shall not be precluded from confirming a transfer of business by virtue only of the non-fulfilment of some relevant requirement of this Act or the rules of the society if it appears to the [F616appropriate authority] that it could not have been material to the members’ decision about the transfer and the [F616appropriate authority] gives a direction that the failure is to be disregarded for the purposes of this section.

(5)Where the [F616appropriate authority] would be precluded from confirming a transfer of business by reason of any of the defects specified in paragraphs (a), (b), (c) and (d) of subsection (3) above, it may direct the society making the transfer—

(a)to take such steps to remedy the defect or defects as it specifies in the direction; and

(b)to furnish the [F616appropriate authority] with evidence satisfying it that it has been done so;

and, if the [F616appropriate authority] is satisfied that the steps have been taken and the defect or defects has or have been substantially remedied, the [F616appropriate authority] shall confirm the transfer; but, if it is not so satisfied, it shall refuse its confirmation.

(6)The steps that a society may be required under subsection (5)(a) above to include the calling of a further meeting, securing the variation of the transfer agreement or securing the alteration of the approved protective provisions of the articles of association of its successor.

(7)A failure to comply with a relevant requirement of this Act or the rules of a building society shall not invalidate a transfer of the business of the society; but, if a society fails without reasonable excuse to comply with such a requirement, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(8)In this section “relevant requirement", with reference to this Act or the rules of a society, means a requirement of the applicable provisions of this Act or of any rules prescribing the procedure to be followed by the society in approving the transfer and its terms.

[F617(9)The PRA must consult the FCA before confirming a transfer or giving a direction under this section.

(10)The PRA must—

(a)notify the FCA it if confirms a transfer; and

(b)send the FCA a copy of any direction it gives.]

Textual Amendments

F609Words in s. 98(1) inserted (1.12.1997) by 1997 c. 32, s. 30(1); S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F610S. 98(1A) inserted (1.12.1997) by 1997 c. 32, s. 30(2); S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F614Words in s. 98(3)(c) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 196(2)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C136S. 98(3) extended (1. 1. 1993) by S.I. 1992/3218, reg. 82(1), Sch. 10 para.22(c)

99 Regulated terms: compensation for loss of office, etc.U.K.

(1)Subject to subsections (2) and (3) below, the terms of a transfer of business by a building society to the company which is to be its successor may include provision for compensation to be paid by the society or the company to or in respect of any director or other officer of the society for loss of office or diminution of emoluments attributable to the transfer.

(2)Any such provision must be authorised so far as the society is concerned as follows, that is to say—

(a)except in so far as paragraph (b) below applies, the provision must be approved by a resolution passed as a special resolution, not being one of the requisite transfer resolutions;

(b)if regulations are made under subsection (3) below authorising payments of such compensation within prescribed limits and the provision for such compensation includes only payments of amounts not exceeding the prescribed limits, the passing of the requisite transfer resolutions is sufficient authority for their payment.

(3)The [F618Treasury] may by regulations authorise payments of compensation to directors or other officers attributable to transfers of business under section 97 subject to limits specified in or determinable under the regulations and the regulations may make different provision for different classes of person.

(4)Nothing in subsection (2) or (3) above prevents a director or other officer from receiving payments which, in the aggregate, exceed any limit applicable to him under either of those subsections if the excess payment is included in provision approved as required by subsection (2)(a) above; but if any payment is received which has not been authorised under paragraph (a) or (b) of that subsection it shall be repaid.

(5)The power to make regulations under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(6)In this section—

and any terms of a transfer of business to which subsection (2) or regulations under subsection (3) above apply are regulated terms for the purposes of section 97.

Textual Amendments

F618Words in s. 99(3) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 182 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F619Words in s. 99(6) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 46; S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xi)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C137S. 99(3): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, art. 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(a)

[F62099A Transfers of business: increased remuneration etc.U.K.

(1)Subject to subsection (2) below, the terms of a transfer of business by a building society to the company which is to be its successor may include provision for any director or other officer of the society to receive increased emoluments in consequence of the transfer, whether by way of increased remuneration or the grant of share options or otherwise.

(2)An ordinary resolution approving any such provision must be put before a meeting of the society.]

Textual Amendments

F620S. 99A inserted (9.6.1997) by 1997 c. 32, s. 31; S.I. 1997/1427, art. 2(f)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

100 Regulated terms etc: distributions and share rights.U.K.

(1)Subject to subsections (2) to (10) below, the terms of a transfer of business by a building society to the company which is to be its successor may include provision for part of the funds of the society or its successor to be distributed among, or other rights in relation to shares in the successor conferred on, members of the society in consideration of the transfer.

(2)The terms of a transfer of a society’s business must—

(a)require its successor to assume as from the vesting date a liability to every qualifying member of the society as in respect of a deposit made with the successor corresponding in amount to the value of the qualifying shares held by him in the society; and

(b)confer a right, subject to subsection (7) below, to a distribution of funds, whether of the society or its successor, by way of bonus on every qualifying member of the society equal to the relevant proportion of the value of the qualifying shares held by him in the society; F621. . .

F621(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)For the purposes of the liabilities assumed under subsection (2)(a) above by the society’s successor, a member is a qualifying member if he held shares in the society on the day immediately preceding the vesting date and his qualifying shares are those held by him on that day.

(4)For the purposes of the rights conferred under subsection (2)(b) above on members of the society, a member is a qualifying member is he held shares in the society on the qualifying day and was not eligible to vote on the [F622requisite shareholders’ resolution], his qualifying shares are those held by him on that day and the relevant proportion is the portion which (as shown in the latest balance sheet of the society) the society’s reserves bear to its total liability to its members in respect of shares.

F623(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F623(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(7)The [F624appropriate authority] may, where it confirms a transfer of a society’s business to an existing company, as it thinks fit having regard to what is equitable between the members of the society, direct that no bonus distribution of funds in pursuance of subsection (2)(b) above shall be made or that the amount distributed shall be such lesser amount as it provides for in the direction; and where the [F624appropriate authority] gives a direction under this subsection no liability to make such a distribution shall arise or, as the case may be, that liability shall be discharged by payment of the lesser amount.

[F625(8)The terms of a transfer of a society's business may confer a right to acquire shares in the successor on a member of the society only if the member—

(a)held shares in the society throughout the period of two years ending with the qualifying day, or

(b)on that day, holds deferred shares in the society that are of a class described in the transfer agreement;

and it is unlawful for any right in relation to shares to be conferred in contravention of this subsection.]

(9)Where the successor is an existing company, any distribution of funds to members of the society, except for the distribution required by subsection (2)(b) above, shall only be made to those members who held shares in the society throughout the period of two years which expired with the qualifying day; and it is unlawful for any distribution to be made in contravention of the provisions of this subsection.

(10)The following restrictions apply to any distribution of funds, or any conferring of rights in relation to shares, in connection with the transfer of its business from the society to its successor where the successor is a company specially formed by the society, that is to say—

(a)no distribution shall be made except that required by subsection (2)(b) above; and

(b)where negotiable instruments acknowledging rights to shares are issued by the successor within the period of two years beginning with the vesting date, no such instruments shall be issued to former members of the society unless they are also issued, and on the same terms, to all other members of the company;

and it is unlawful for any distribution of funds to be made in contravention of the provisions of this subsection.

(11)Where the successor is a specially formed company, the terms of the transfer must include provision to secure that the society ceases to hold any shares in the successor by the date on which the society is to dissolve.

(12)Any terms of a transfer of business to which subsection (2), (8), (9), (10) or (11) above apply are regulated terms for the purposes of section 97.

(13)In subsections (4), (5), (8) and (9) above, “qualifying day” means the day specified in the transfer agreement as the qualifying day for the purposes of this subsection.

Textual Amendments

F621S. 100(2)(c) and word preceding it repealed (21.3.1997) by 1997 c. 32, ss. 40(a), 46(2), Sch. 9

F622Words in s. 100(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 47; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxviii)

F623S. 100(5)(6) repealed (21.3.1997) by 1997 c. 32, ss. 40(b), 46(2), Sch. 9

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C138S. 100 modified (21.3.1997) by 1997 c. 32, s. 46(1), Sch. 8 para. 9(1)

[F626101 Protective provisions for specially formed successors.U.K.

(1)No company specially formed by a building society to be its successor shall, at any time during the protective period—

(a)offer for sale or invite subscription for any shares in the company or allot or agree to allot any such shares with a view to their being offered for sale, or

(b)allot or agree to allot any share in the company, or

(c)register a transfer of shares in the company,

if the effect of the offer, the invitation, the allotment or the registration of the transfer would be that more shares than the permitted proportion would be held by any one person (other than the society), or by any two or more persons who are parties to a concert party agreement which relates to shares in the company.

(2)The articles of association of the company shall include provision such as will secure that the company does not offer, invite subscription for, allot or register transfers of, shares in contravention of subsection (1) above and no alteration in those provisions may be made by the company during the protective period.

(3)Any provision (including any altered provision) of the company’s articles of association which is to any extent inconsistent with subsection (1) above shall, to that extent, be void; and any allotment or registration of a transfer of shares in contravention of that subsection shall be void.

(4)This section shall cease to apply to a company if—

(a)a [F627person who is an authorised person within the meaning of section 31 of the Financial Services and Markets Act 2000] becomes a subsidiary undertaking of the company, or the company or such an undertaking acquires the whole, or substantially the whole, of the business of such [F628a person];

(b)a special resolution to that effect is passed by the requisite majority of the members of the company; or

(c)the [F629appropriate authority] by notice to the company gives a direction to that effect;

and the [F629appropriate authority] shall not give such a direction unless it considers it desirable to do so in the interests of the depositors and potential depositors of the company.

[F630(4A)The PRA must consult the FCA before giving a direction under this section.]

(5)If this section ceases to apply to a company, any provision included by virtue of subsection (2) above in its articles of association shall cease to have effect.

(6)In this section—

and any expression used in this section and in [F634the Companies Acts (as defined in section 2 of the Companies Act 2006)] has the same meaning in this section as in [F635those Acts].

(7)For the purposes of this section—

(a)shares held by a person in a fiduciary capacity shall be treated as not held by him;

(b)shares held by a person as nominee for another shall be treated as held by the other; and

(c)shares shall be regarded as held as nominee for another if any voting rights attaching to them are exercisable only on his instructions or with his consent or concurrence.

(8)Any reference in this section to shares includes a reference—

(a)to any warrant or other instrument entitling the holder to subscribe for shares; and

(b)to any certificate or other instrument issued by or on behalf of the company and conferring a right to acquire shares otherwise than by subscription;

and for the purposes of subsection (1) above any shares to which any such instrument relates shall be deemed to be held by the holder of the instrument.]

Textual Amendments

F626S. 101 substituted (21.3.1997) by 1997 c. 32, s. 41 (with s. 46(1), Sch. 8 para. 10)

F627Words in s. 101(4)(a) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 197(2)(a)

F628Words in s. 101(4)(a) substituted (1.12.2001) by S.I. 2001/3649, arts. 1, 197(2)(b)

F631Definition of “the Authority" in s. 101(6) repealed (1.12.2001) by S.I. 2001/2617, art. 13(2), Sch. 4; S.I. 2001/3538, art. 2(a)

F633Definition of “financial institution" in s. 101(6) repealed (1.12.2001) by S.I. 2001/3649, arts. 1, 197(3)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C139S. 101(4) modified (22.3.2001) by 2001 c. i, s. 14 (with s. 13)

C140S. 101(4): functions transferred (1.6.1998) by 1998 c. 11, s. 21(a)(iii); S.I. 1998/1120, art. 2

102 Transfer regulations.U.K.

(1)The [F636Treasury] may, by transfer regulations under this section, make provision regulating transfers of business under section 97.

(2)Transfer regulations may, in particular—

(a)make provision for and in connection with the transition from regulation by and under this Act to regulation by and under [F637the Companies Acts] F638. . .

(b)make provision for the treatment, in the hands of companies taking such transfers, of the property, rights and liabilities transferred and for the modification of any enactment in its application to property, rights and liabilities so transferred;

(c)make provision for the purposes of and incidental to section 100 [F639and sections 101, 102B, 102C and 102D].

(3)The power to make transfer regulations is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4)Any terms of a transfer of business to which transfer regulations apply are regulated terms for the purposes of section 97.

Textual Amendments

F636Words in s. 102(1) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 185(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

F638Words in s. 102(2)(a) repealed (1.12.2001) by S.I. 2001/2617, art. 13(2), Sch. 4 ; S.I. 2001/3538, art. 2(a)

F639Words in s. 102(2)(c) substituted (21.3.1997 with application as mentioned in s. 2(2) of the amending Act) by 1997 c. 41, s. 1(3)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C141S. 102(1)(2): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, art. 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(a)

[F640102A Rights of second-named joint shareholders.U.K.

(1)This section applies where the terms of a transfer of business by a building society to the company which is to be its successor include such provision as is mentioned in section 100(1).

(2)If—

(a)a person (“A”) held shares in the society throughout the requisite period;

(b)any shares in the society held by A were jointly held for any period (“the joint ownership period”) constituting the whole or part of the requisite period;

(c)A was the second-named holder of the jointly held shares for the whole or part of the joint ownership period; and

(d)no person who has priority over A for the purposes of this section held shares in the society throughout the requisite period,

the jointly held shares shall be treated for the purposes of subsections (8) and (9) of section 100 as having been held by A alone.

(3)The following persons shall have priority over A for the purposes of this section, namely—

(a)where A was not the first-named holder of the jointly held shares for any part of the joint ownership period—

(i)any person who was the first-named holder of those shares for the whole or part of that period; and

(ii)where A was the second-named holder of those shares for part only of that period, any person who was the second-named holder of those shares for a later part of that period; and

(b)where A was the first-named holder of the jointly held shares for part of the joint ownership period, any person who was the first-named holder of those shares for a later part of that period.

(4)If a person dies during the requisite period at a time when he is named in the records of the society as a joint holder of any shares jointly held, this section shall have effect in relation to any later time as if he had never been so named.

(5)In this section—

Textual Amendments

F640S. 102A inserted (1.5.1995 with application as mentioned in s. 2(2) of the amending Act) by 1995 c. 5, s. 1(1)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

[F641102B Protection of interests of beneficiaries in the case of trustee account holders.U.K.

(1)This section shall have effect (notwithstanding anything to the contrary in the rules of the society) where the terms of the transfer of the business of a building society to its successor include provision for a distribution to be made to its members, and where more than one distribution is provided for, shall have effect in relation to each of them.

(2)In this section “distribution” in relation to a society means—

(a)a distribution among members of the society of part of the funds of the society or its successor, other than a distribution within section 100(2)(b), or

(b)the conferring of rights in relation to shares in the successor on members of the society,

in consideration of the transfer.

(3)Subject to the following provisions of this section and section 102C, a trustee account holder shall be treated by the society and its successor as not being disentitled from sharing in the distribution—

(a)as such trustee account holder, and

(b)also in relation to another account which he may hold as a trustee account holder or in relation to another account which he may hold otherwise than as a trustee account holder,

by reason only of his holding more than one account; and the terms of the transfer of business in question shall comply with this subsection.

(4)A trustee account holder shall not be entitled to share in a distribution as such trustee account holder by virtue of any provision of this section if—

(a)the society has notified that account holder that he must make, in relation to any account as respects which he is a trustee account holder, a statutory declaration under the M16Statutory Declarations Act 1835 complying with subsection (5); but

(b)the trustee account holder does not give the society that declaration before such date as may be specified in the society’s notice to him.

(5)A statutory declaration complies with this subsection if the person making it declares in it—

(a)that he is a trustee account holder in respect of an account identified in the declaration,

(b)the name and address of each beneficiary for whom he holds the account,

(c)the reason why it is not reasonably practicable for any beneficiary to act in relation to that account himself, and

(d)in a case where section 102D(8) applies, the names and addresses of all the trustee account holders of the account during the period referred to in that subsection.

(6)In any case, where in response to a notice under subsection (4) (and within the time specified in that notice), a person gives a society a statutory declaration complying or purporting to comply with subsection (5) that he is a trustee account holder as respects any account he holds with that society then, subject to section 102C, the society and its successor—

(a)shall treat him as such an account holder in respect of that account, and

(b)shall not be liable to any other person in respect of any distribution to him (whether or not the society makes any enquiry into his eligibility before making the distribution).]

Textual Amendments

F641Ss. 102B-102D inserted (21.3.1997 with application as mentioned in s. 2(2) of the amending Act) by 1997 c. 41, s. 1(1)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

Marginal Citations

[F642102C Consequences of false declaration.U.K.

(1)Where it is shown, in relation to a person who has made a statutory declaration to a society purporting to comply with section 102B(5), that, at the time the declaration is made, he is not a trustee account holder in relation to the account in question, then—

(a)a distribution shall not be made to him in pursuance of section 102B if it is so shown before the distribution is made;

(b)if a distribution is made to him, he shall be liable—

(i)to repay to the society’s successor any funds, and to surrender to it any shares or rights to any shares, which he may have received as the holder of that account,

(ii)if any shares or rights to any shares are not surrendered, to pay the successor an amount equal to the relevant value of those shares or rights.

(2)Where subsection (1)(b) applies in relation to a person, he shall also be liable to pay to the successor interest (at the rate applicable to judgment debts or, as respects Scotland, to decrees of the Court of Session)—

(a)on any funds which he is liable to repay to the successor under sub-paragraph (i) of subsection (1)(b),

(b)on the relevant value of any shares or rights which are surrendered under that sub-paragraph, and

(c)on any amount payable under subsection (1)(b)(ii),

as from the day on which he received the funds, shares or rights until subsection (1)(b) is complied with in relation thereto.

(3)In subsections (1) and (2) “relevant value”, in relation to any shares or rights to any shares, means the market value of those shares on the first day on which they are quoted on the Stock Exchange Daily Official List, and section 272 of the M17Taxation of Chargeable Gains Act 1992 shall apply for the purposes of this subsection.

(4)Where the successor receives any payment in circumstances where subsection (1)(b) applies, the amount of the payment shall be treated as settlement of a debt due to the successor and accordingly not as an amount due to members of the society.

F643F644(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F643(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F642Ss. 102B-102D inserted (21.3.1997 with application as mentioned in s. 2(2) of the amending Act) by 1997 c. 41, s. 1(1)

F644S. 102C(5) repealed (1.10.2009) by Companies Act 2006 (c. 46), s. 1300(2), Sch. 16; S.I. 2008/2860, art. 4, Sch. 1 Pt. 1 (with arts. 7 8 Sch. 2) (which transitional provisions in Sch. 2 are amended (1.10.2009) by S.I. 2009/2476, arts. 1(3), 2(3)(4) and by S.I. 2009/1802, arts. 1, 18, Sch.)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

Marginal Citations

[F645102D Provisions supplementary to sections 102B and 102C.U.K.

(1)This section has effect for the purposes of sections 102B and 102C.

(2)“Trustee account holder”, in relation to any society, is a person who is the holder of an account as respects which all the conditions in subsection (4) are satisfied and which he holds in trust for another person, but subject to subsection (5).

(3)Any reference in this section or in sections 102B and 102C to the holder of an account (however expressed) includes a reference to a person to whom the society has advanced a loan secured on land.

(4)The conditions referred to in subsection (2) are—

(a)that he is a member of the society by virtue of holding that account;

(b)that the account holder—

(i)is the sole account holder or the representative joint holder (within the meaning of paragraph 7 of Schedule 2 to this Act), or

(ii)in the case of a borrowing member, is not a joint borrower or is the representative joint borrower (within the meaning of paragraph 8 of that Schedule);

(c)that it is not reasonably practicable for any one or more of the persons for whom he holds the account, by reason of ill-health or old age or any physical or mental incapacity or disability, to act in relation to the account himself.

(5)Where a person holds more than one account in trust for any other person or persons and the beneficiary or any of the beneficiaries in respect of two or more of those accounts (“the duplicate accounts”) are the same, then—

(a)the account holder shall not be a trustee account holder in respect of any of those duplicate accounts except the one which was first opened, and

(b)accordingly, section 102B(3) and (4) shall apply only in relation to that first opened duplicate account.

(6)“Beneficiary”, in relation to any account or any trustee account holder, is the person or any of the persons for whose benefit the account is held or for whose benefit the trustee account holder holds the account (as the case may be).

(7)Any beneficiary of any account who is a child shall be disregarded for the purposes of subsection (4) above unless he suffers ill-health or any physical or mental incapacity or disability which if suffered by an adult would prevent it being reasonably practicable for such an adult to act in relation to the account himself.

(8)In any case where—

(a)the identity of the trustee account holder changes during any period which is relevant to the distribution in question, and

(b)the account is not closed but continues to be held for the benefit of the same beneficiaries (disregarding any who have died),

the trustee account holders during that period shall be treated for the purpose of section 102B and the distribution as one person.

(9)Any reference to a person holding an account in trust for any other person includes a reference—

(a)to any person holding an account for another person in pursuance of any order, direction or authority made or given under [F646the Mental Capacity Act 2005] or under Part VIII of the M18Mental Health (Northern Ireland) Order 1986;

[F647(b)to an attorney holding an account for another person under—

(i)an enduring power of attorney or lasting power of attorney registered under the Mental Capacity Act 2005, or

(ii)an enduring power registered under the Enduring Powers of Attorney (Northern Ireland) Order 1987;]

(c)in relation to Scotland—

(i)to a curator bonis and a judicial factor holding an account for another person; and

(ii)to a person holding an account for another person under a factory and commission or power of attorney which continues to have effect by virtue of section 71 of the M19Law Reform (Miscellaneous Provisions) (Scotland) Act 1990;

and references to a beneficiary shall be construed accordingly.

(10)Where rights to acquire shares are to be conferred on one or more members of the society by reference to more than one account, in accordance with the provisions of section 102B, those rights shall not, without more, be taken, for the purposes of section 100(8), to confer rights to acquire the shares in priority to other subscribers.

(11)The [F648Treasury may] make regulations prescribing—

(a)the time within which the notice required by section 102B(4)(a) must be given, and

(b)the minimum time which may be specified in the notice for the purposes of section 102B(4)(b),

but, if such regulations are not made, any such notice must be given in such time, and must specify such time, as will give the trustee account holder a reasonable opportunity to make the declaration and give it to the society in compliance with the notice.

(12)Regulations under subsection (11) shall be made by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F645Ss. 102B-102D inserted (21.3.1997 with application as mentioned in s. 2(2) of the amending Act) by 1997 c. 41, s. 1(1)

F646Words in s. 102D(9)(a) substituted (1.10.2007) by Mental Capacity Act 2005 (c. 9), s. 68(1), Sch. 6 para. 32(a) (with ss. 27-29, 62); S.I. 2007/1897, art. 2(1)(d)

F648Words in s. 102D(11) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II, para. 186 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C134Ss. 97-102D applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

C135Ss. 97-102D excluded by 2009 c. 1, s. 84D(6) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C142S. 102D(11): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, art. 4(1), Sch. 1 Pt. III (with art. 5); S.I. 2001/3538, art. 2(a)

Marginal Citations

Cancellation of registrationU.K.

103 Cancellation of registration.U.K.

(1)Where [F649, having consulted the PRA,] the [F650FCA] is satisfied, with respect to a building society—

(a)that the society has been dissolved by virtue of section 93(5), 94(10), 97(9) or 97(10), or

(b)that the society has been wound up under the applicable winding up legislation and dissolved, [F651or

(c)that the society has been dissolved following building society insolvency or building society special administration.]

the [F650FCA] shall cancel the registration of the society.

(2)Where [F652, having consulted the PRA,] the [F650FCA] is satisfied, with respect to a building society—

(a)that a certificate of incorporation has been obtained for the society by fraud or mistake and that the society [F653does not have permission under [F654Part 4A] of the Financial Services and Markets Act 2000 to accept deposits], or

(b)that the society has ceased to exist,

the [F650FCA] may cancel the registration of the society.

(3)Without prejudice to subsection (2) above, the [F650FCA] may, if it thinks fit [F655after consulting the PRA], cancel the registration of a building society at the request of the society, evidenced in such manner as the [F650FCA] may direct.

(4)Before cancelling the registration of a building society under subsection (2) above, the [F650FCA] shall give to the society not less than two months’ previous notice, specifying briefly the grounds of the proposed cancellation.

(5)Where the registration of a building society is cancelled under subsection (2) above, the society may appeal to—

(a)the High Court, where the principal office of the society is situated in England and Wales or in Northern Ireland, or

(b)the Court of Session, where that office is situated in Scotland.

and on any such appeal the High Court or the Court of Session, as the case may be, if it thinks it just to do so, may set aside the cancellation.

(6)Where the registration of a building society is cancelled under subsection (2) or (3) above, then, subject to the right of appeal conferred by subsection (5) above, the society, so far as it continues to exist, shall cease to be a society incorporated under this Act (and accordingly shall cease to be a building society within the meaning of this Act).

(7)Subsection (6) above shall have effect in relation to a building society without prejudice to any liability actually incurred by the society; and any such liability may be enforced against the society as if the cancellation had not taken place.

(8)Any cancellation of the registration of a building society under this section shall be effected in writing signed by the [F650FCA] .

(9)As soon as practicable after the cancellation of the registration of a society under this section the [F650FCA] shall cause notice thereof to be published in the London Gazette, the Edinburgh Gazette or the Belfast Gazette according to the situation of the society’s principal office, and if it thinks fit, in one or more newspapers.

Textual Amendments

F653Words in s. 103(2)(a) substituted (17.8.2001 for specified purposes and otherwise 1.12.2001) by S.I. 2001/2617, art. 13(1), Sch. 3 Pt. II para. 187(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(a)

Modifications etc. (not altering text)

C143S. 103 excluded by 2009 c. 1, s. 84D(7) (as inserted (10.1.2015) by The Building Societies (Bail-in) Order 2014 (S.I. 2014/3344), arts. 1, 2(3))

C144S. 103(5)(6)(7) applied by S.I. 1986/2168, art. 10(3)(b)

Part XIU.K. Miscellaneous and Supplementary and Conveyancing Services

Miscellaneous and supplementaryU.K.

104 Power to amend, etc. to assimilate to company law.U.K.

(1)If, on any modification of the statutory provisions in force in Great Britain or Northern Ireland relating to companies, it appears to the Treasury to be expedient to modify the relevant provisions of this Act for the purpose of assimilating the law relating to companies and the law relating to building societies, the Treasury may, by order, make such modifications of the relevant provisions of this Act as they think appropriate for that purpose.

(2)The “relevant provisions of this Act” are the following provisions as for the time being in force, that is to say—

(a)so much of Part VI as relates to investigations or inspections;

(b)the provisions of Part VII (management);

(c)the provisions of Part VIII (accounts and audit); F656 . . .

(d)so much of Part X as relates to winding up [F657or insolvency][F658; and

(e)section 110 (provisions exempting officers and auditors from liability).].

(3)The power conferred by subsection (1) above includes power to modify the relevant provisions of this Act so as to—

(a)confer power to make orders, regulations, rules or other subordinate legislation;

(b)create criminal offences; or

(c)provide for the charging of fees but not any charge in the nature of taxation.

(4)An order under this section may—

(a)make consequential amendments of or appeals in other provisions of this Act; or

(b)make such transitional or saving provisions as appear to the Treasury to be necessary or expedient.

(5)The power to make an order under this section is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(6)In this section—

Subordinate Legislation Made

P2S. 104: power exercised by S.I. 1991/1729

S. 104: power exercised (4.12.1991) by S.I. 1991/2738

Textual Amendments

F656Word in s. 104(2) omitted (1.10.1991) by virtue of Companies Act 1989 (c. 40, SIF 27), s. 211(1); S.I. 1991/1996, art. 2(1)(b)

F657Words in s. 104(2) inserted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 48; S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xii)

F658Word in s. 104(2) and s. 104(2)(e) added (1.10.1991) by Companies Act 1989 (c. 40, SIF 27), s. 211(1); S.I. 1991/1996, art. 2(1)(b)

[F659104A Registration of charges: application of company law.U.K.

(1)For the purpose of securing the registration of charges created by building societies, the Secretary of State may, by order made with the concurrence of the Treasury F660... , provide that such of the provisions of [F661Part 25 of the Companies Act 2006 (company charges)] as may be specified in the order shall apply in relation to building societies, and charges created by building societies, with such modifications as may be so specified.

(2)An order under this section may make different provision for different cases or different areas and may contain such incidental, supplemental and transitional provisions as may appear to the Secretary of State to be necessary or expedient.

(3)The power to make an order under this section is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F659S. 104A inserted (9.6.1997) by 1997 c. 32, s. 42; S.I. 1997/1427, art. 2(j)

F660Words in S. 104A(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

[F662105 Limited power to anticipate future statutory instrument powers.U.K.

(1)This section has effect as regards any power conferred under any provision of this Act on building societies or building societies of any description by—

(a)an instrument a draft of which has to be approved by a resolution of each House of Parliament before it can be made, or

(b)an instrument which is subject to annulment in pursuance of a resolution of either House of Parliament and which defers its operation until a future date;

and in this section “the anticipation date” is, in the case of an instrument falling within paragraph (a), the date on which either House approves the draft and, in the case of an instrument falling within paragraph (b), the date on which it was laid before Parliament.

(2)Every building society or, as the case may be, every building society of the description to which the instrument applies, has, as from the anticipation date, power, for the purposes of the power conferred by the instrument, to do such things, subject to subsection (3) below, as are reasonably necessary to enable it—

(a)to decide whether or not, and to what extent, to exercise (and in the case of an adoptable power to adopt) the power, and

(b)if it decides to exericse the power, to exercise it as from the date when it becomes exercisable by the society.

(3)Subsection (2)(b) above does not authorise a society—

(a)to make contracts, other than conditional contracts, for the acquisition of land, the acquisition of a business or the acquisition of shares in any company if that company offers the public any service or facility within the power,

(b)to issue invitations to members of the society or the public to apply for any power to be exercised for their benefit, or

(c)to retain shares in a company which offers the public any service or facility within the power;

and, in this subsection, “conditional”, in relation to contracts with respect to the exercise of a power, means conditional on the power’s becoming exercisable by the society.

(4)The power conferred by this paragraph, and activities carried on under it, for the purposes of an adoptable power are not to be treated as included in, or in activities comprised in, that adoptable power for the purposes of paragraph 16 of Schedule 2 to this Act.]

Textual Amendments

F662S. 105 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 49, Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxix)(cc)(xiv)

106 Public file of the society.U.K.

(1)The [F663FCA] shall prepare and maintain a file relating to each building society (to be known as the public file) and the file shall—

(a)contain the documents or, as the case may be, the copies of the documents and the records of the matters directed by or under any provision of this Act to be kept in the public file of the society; and

(b)be available for inspection on reasonable notice by members of the public [F664subject to subsection (3) below].

(2)Any member of the public shall be entitled, [F664subject to subsection (3) below], to be furnished with a copy of all or any of the documents or records kept in the public file of a building society.

[F665(3)The [F663FCA] may charge a reasonable fee for making the public file available to any person for inspection under subsection (1)(b) above, or for furnishing any person with a copy of any documents or records under subsection (2) above.]

Textual Amendments

F664Words in S. 106(1)(b)(2) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 189(b) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F665S. 106(3) inserted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 189(c) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

107 Restriction of use of certain names and descriptions.U.K.

(1)Subject to subsections (2) to (9) below, no person carrying on in the United Kingdom a business of any description shall, unless that person is a building society, use any name or in any other way so describe himself or hold himself out so as to indicate, or reasonably be understood to indicate—

(a)that he is a building society,

(b)that he, or his business, is connected with one or more building societies, or

(c)that he, or his business, is connected with building societies generally.

(2)Subsection (1) does not prohibit the use by an institution carrying on the business of taking deposits and making loans secured on land which has its principal place of business in a country or territory outside the United Kingdom, of the name under which the institution carries on business in that country or territory if—

(a)the name is used in immediate conjunction with a description distinguishing the institution from a building society, being a description which has been approved for the purposes of this subsection by the [F666FCA] and the approval has not been revoked under subsection (7) below, and

(b)where the name appears in writing, that description is sufficiently prominent to secure that a person who reads the name will also read the description.

(3)For a description to distinguish an institution from a building society for the purposes of subsection (2) above it must distinguish it by reference to all or any of the following matters,—

(a)the situation of its principal place of business,

(b)its legal status or constitution, and

(c)the law (if any) which authorises it to take deposits in the United Kingdom,

as the [F666FCA] determines in its case, but need not indicate any other distinction.

(4)Subsection (1) above does not prohibit a person from carrying on a business under a name which indicates a connection between—

(a)that person, or his business, and one or more building societies, or

(b)that person, or his business, and building societies generally,

if the name has been approved for the purposes of this subsection by the [F666FCA] and the approval has not been revoked under subsection (7) below.

(5)No name shall be approved for the purposes of subsection (4) above unless the [F666FCA] , having regard to—

(a)the true connection (if any) in fact existing between the person using, or proposing to use, the name and the particular society or societies in question or with building societies generally, as the case may be, and

(b)in the cases referred to in subsection (4)(a) above, the respective natures of the business of that person and the society or societies in question,

is satisfied that the connection indicated by the name is not misleading; and, in so far as the name indicates investment or other financial support on the part of a building society the [F666FCA] shall not approve the use of the name unless it is satisfied that the name indicates no more investment or support than is the case and than is, in the opinion of the [F666FCA] , within the financial capacity of the building society to provide.

(6)An application for approval under subsection (2) or (4) above shall be made to the [F666FCA] in such form as it directs and accompanied by such information or evidence as it requires generally or in the particular case.

(7)The [F666FCA] may revoke any approval under subsection (2) or (4) above of a distinguishing description or a name, as the case may be, if it is of the opinion—

(a)in the case of a distinguishing description, that, by reason of any change in the matters by reference to which the distinction is made, the description does not or does not any longer distinguish the institution as required by subsection (2) above, or

(b)in the case of a name.

(i) that the name has proved to be misleading to the public,

(ii)that the approval has been obtained by fraud or mistake, or

(iii)that there has been a change in the facts to which the [F666FCA] had regard in giving its approval,

but it shall not do so without first giving the person to whom the approval was given an opportunity of making representations with respect to the proposed revocation of that approval.

(8)Subsection (1) above does not prohibit a person from using a description (other than his name) which, or from holding himself out in a way that, indicates a connection between himself or his business and one or more building societies if and to the extent he has been authorised to do so in writing by the society or societies in question.

(9)Subsection (1) above does not prohibit a person from using a description (other than his name) which, or from holding himself out in a way that, indicates a connection between himself or his business and building societies generally where the connection indicated is not misleading.

(10)Where on an application for—

(a)the first registration of a company, or the registration of a company by a new name, by [F667the registrar of companies under the Companies Act 2006], or

[F668(b)approval by the Secretary of State of words or expressions for inclusion in a business name under section 1194 of the Companies Act 2006,]

it appears to the registrar, [F669or the Secretary of State], as the case may be, that the use of the name or the words or [F670expressions] by the person seeking to register with it would contravene subsection (1) above, the registration shall not be made or the approval given.

(11)A person who contravenes subsection (1) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale; and where the contravention involves a public display or exhibition of the offending name, description or other matter, there shall be a fresh contravention of the subsection on each day during which that person causes or permits the display or exhibition to continue for which that person shall be liable on summary conviction to a fine not exceeding £200.

[F671(12)In this section—

Textual Amendments

F671S. 107(12) substituted (1.12.2001) by 2001/3649 arts. 1, 198(2)

F672108. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

109 Exemption from stamp duty.U.K.

[F673(1)]The following instruments shall be exempted from all such stamp duties (if any) as apart from this section would be chargeable on them, that is to say—

(a)any copy of the rules of a building society;

(b)any transfer of a share in a building society;

(c)any bond or other security to be given to, or on account of, a building society or by an officer of a building society;

(d)any instrument appointing an agent of a building society or revoking such an appointment; and

(e)any other instrument whatsoever which is required or authorised to be given, issued, signed, made or produced in pursuance of this Act or of the rules of a building society.

[F674(2)No transfer effected by subsection (6) or (7) of section 97 shall give rise to any liability to stamp duty]

Textual Amendments

Modifications etc. (not altering text)

[F675109A.Exemptions from stamp duty land taxU.K.

(1)A land transaction effected by or in consequence of—

(a)an amalgamation of two or more building societies under section 93; or

(b)a transfer of engagements between building societies under section 94,

is exempt from charge for the purposes of stamp duty land tax.

(2)Relief under this section must be claimed in a land transaction return or an amendment of such a return.

(3)In this section—

Textual Amendments

110 Officers and auditors not to be exempted from liabilityU.K.

(1)Subject to subsection (3) below, any provision to which this section applies, whether contained in the rules of a building society or in any contract with a building society or otherwise, shall be void.

(2)This section applies to any provision for—

(a)exempting any director, other officer or person employed as auditor of a building society from any liability which, by virtue of any rule of law, would otherwise attach to him in respect of the negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the society, or

(b)indemnifying any such person against any such liability.

[F676(3)Subsection (1) above shall not prevent a building society from

(a)purchasing and maintaining for a person insurance against any such liability, or

(b)indemnifying a person against any liability incurred by him in defending any proceedings (whether civil or criminal) in which judgment is given in his favour or he is acquitted.]

(4)[F677Section 1157 of the Companies Act 2006 (power of court] to grant relief in certain cases of negligence, default, breach of duty or breach of trust) shall apply in relation to officers and auditors of a building society as it applies in relation to officers and auditors a company.

Textual Amendments

F676S. 110(3) substituted (1.1.1992) by S.I. 1991/2738, art.2

111 Time limit for commencing proceedings.U.K.

(1)Notwithstanding any limitation on the time for the taking of proceedings contained in any Act, summary proceedings for any offence under this Act [F678, other than an offence in relation to which provision is made in subsection (1A),] may, subject to subsection (2) below, be commenced [F679by the FCA] at any time within the period of one year beginning with the date of which evidence sufficient [F680in its opinion] to justify a prosecution for the offence, comes to its knowledge.

[F681(1A)Notwithstanding any limitation on the time for taking proceedings contained in any Act, summary proceedings for the offences under the provisions listed in subsection (1B), in the circumstances specified in that subsection in relation to those provisions, may be commenced by the PRA, after notifying the FCA, or by the FCA, after notifying the PRA, at any time within the period mentioned in subsection (1C).

(1B)The provisions and the circumstances are—

(a)section 52 (powers to obtain information and documents etc.), if—

(i)the failure referred to in subsection (10) of that section is a failure to furnish any information or accountant’s report, to produce any documents or material, or to provide any explanation or make any statement to the PRA, or

(ii)the information, explanation or statement referred to in subsection (11) or (12) of that section is furnished, provided or made to the PRA;

(b)section 55 (investigations), if the person appointed under subsection (1) of that section was appointed by the PRA;

(c)section 81 (laying and furnishing accounts), if the default referred to in subsection (4) of that section relates to a failure to send a copy of the accounts to the PRA in accordance with subsection (2) of that section;

(d)section 87 (dissolution by consent), if the failure referred to in subsection (5) or (7) of that section relates to a failure to give notice to the PRA;

(e)section 88 (voluntary winding up), if the failure referred to in subsection (4) of that section relates to a failure to send a copy of the resolution to the PRA in accordance with subsection (2) of that section;

(f)section 91 (power of court to declare dissolution of building society void), if the failure referred to in subsection (5) of that section relates to a failure to send a copy of an order to the PRA in accordance with subsection (4) of that section;

(g)section 95 (mergers: provisions supplementing sections 93 and 94), if the application referred to subsection (3) of that section was made, or should have been made, to the PRA;

(h)section 98 (transfers of business: supplementary provisions), if the application referred to subsection (2) of that section was made, or should have been made, to the PRA;

(i)Schedule 8A, paragraph 3(5) (directions under section 42B(3)), if the PRA has given a direction under section 42B(3);

(j)Schedule 8A, paragraph 9(5) (directions under section 42B(4)), if the PRA has given a direction under section 42B(4);

(k)Schedule 11, paragraph 3 (auditors: appointment), if the failure referred to in sub-paragraph (2) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (1) of that paragraph;

(l)Schedule 11, paragraph 6 (auditors: removal), if the failure referred to in sub-paragraph (3) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (2) of that paragraph;

(m)Schedule 11, paragraph 7 (auditors: resignation), if the default referred to in sub-paragraph (8) of that paragraph relates to a failure to send any notice or statement to the PRA in accordance with sub-paragraph (3) or (7) of that paragraph;

(n)Schedule 15, paragraph 21 (application of companies winding up legislation to building societies: winding up by the court), if the failure referred to in sub-paragraph (4) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (3) of that paragraph;

(o)Schedule 15, paragraph 48 (modified application of Insolvency (Northern Ireland) Order 1989: winding up by the High Court), if the failure referred to in sub-paragraph (4) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (3) of that paragraph; and

(p)Schedule 16, paragraph 6 (mergers: penalty), if the default referred to in sub-paragraph (1) of that paragraph relates to a failure to send a copy of a statement or notification to the PRA in accordance with paragraph 5(1) of that Schedule.

(1C)The period is one year beginning with the date on which evidence comes to the knowledge of one or both of the FCA and the PRA, being evidence sufficient in the opinion of the FCA or the PRA (as the case may be) to justify a prosecution.]

(2)Nothing in subsection (1) [F682or (1A)] above shall authorise the commencement of proceedings for any offence at a time more than three years after the date on which the offence was committed.

(3)For the purposes of subsection (1) [F683and subsection (1C)] of this section a certificate, purporting to be signed by or on behalf of the [F684FCA or the PRA] , as to the date on which such evidence as is mentioned in [F685the relevant subsection] came to its knowledge, shall be conclusive evidence of that date.

[F686(4) In the application of this section to Scotland—

(a)for subsection (1), substitute—

“(1)Notwithstanding any limitation on the time for the taking of proceedings contained in any Act, summary proceedings for any offence under this Act may, subject to subsection (2), be commenced by the Lord Advocate at any time within the period of one year beginning with the date on which evidence sufficient in the opinion of the Lord Advocate to justify a prosecution for the offence, comes to the knowledge of the Lord Advocate”;

(b)omit subsections (1A), (1B) and (1C); and

(c)for subsection (3), substitute—

“(3)For the purposes of subsection (1) of this section a certificate, purporting to be signed by or on behalf of the Lord Advocate, as to the date on which such evidence as is mentioned in that subsection came to the knowledge of the Lord Advocate, shall be conclusive evidence of that date.”.]

(5)In the application of this section to Scotland, [F687section 136(3) of the Criminal Procedure (Scotland) Act 1995] shall apply for the purposes of this section as it applies for the purposes of that section.

Textual Amendments

F687Words in s. 111(5) substituted (S.) (1.4.1996) by 1995 c. 40, ss. 5, 7(2), Sch. 4 para. 65

112 Offences: liability of officers and defence of due diligence.U.K.

(1)Where an offence under any provision of this Act committed by a building society is proved to have been committed with the consent or connivance of, or to be attributable to any neglect on the part of, any officer of the society he, as well as the society, shall be guilty of that offence and liable to be proceeded against and punished in accordance with that provision.

F688(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)Where an offence under any provision of this Act committed by a body corporate other than a building society is proved to have been committed with the consent or connivance, or to be attributable to any neglect on the part of, any officer of the body corporate he, as well as the body corporate, shall be guilty of that offence and liable to be proceeded against and punished accordingly.

(4)In any proceedings for an offence under this Act, it shall be a defence for a person charged to prove that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any person under his control

Textual Amendments

F688S. 112(2) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

113 Evidence.U.K.

[F689(1)Any document bearing the seal or stamp of the [F690FCA] shall be received in evidence without further proof.

(1A)Any document purporting to have been signed by a person authorised to do so on behalf of the [F691FCA or the PRA] shall, in the absence of any evidence to the contrary, be received in evidence without proof of the signature.

(1B)In subsections (1) and (1A), “document” means any document issued, received or created by the [F691FCA or the PRA] for the purposes of or in connection with this Act.]

(2)Any printed document purporting to be a copy of the rules or memorandum of a building society, and certified by the secretary or other officer of the society to be a true copy of its rules or memorandum as registered, shall be received in evidence and shall, in the absence of any evidence to the contrary, be deemed to be a true copy of its rules or memorandum.

Textual Amendments

F689S. 113(1)-(1B) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) for s. 113(1) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 192 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

114 Records.U.K.

(1)Subject to any other provision of this Act or regulations under it, any record to be kept by a building society may be kept in any manner.

(2)Where any such record is not kept by making entries in a bound book, but by some other means, adequate precautions shall be taken for guarding against falsification and facilitating its discovery.

(3)The power in subsection (1) above includes power to keep the record by recording matters otherwise than in legible form so long as the recording is capable of being reproduced in a legible form; and any duty imposed by or under this Act to allow inspection of, or to furnish a copy of, the record or any part of it is to be treated as a duty to allow inspection of, or to furnish, a reproduction of the recording or of the relevant part of it in a legible form.

(4)The [F692Treasury may by regulations], make such provision in addition to subsection (3) above as [F693they consider] appropriate in connecton with such records as are kept otherwise than in legible form; and the regulations may make modifications of this Act so far as it relates to the records of building societies.

(5)If default is made in complying with this section the building society shall be liable on summary conviction—

(a)to a fine not exceeding level 4 on the standard scale, and

(b)in the case of a continuing offence, to an additional fine not exceeding £100 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

Textual Amendments

F692Words in S. 114(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 193(a) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F693Words in s. 114(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 193(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C146S. 114(4): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2000/2617 arts. 2(b), 4(1) Sch. 1 Pt. III; S.I. 2001/3538, art. 2

115 Service of notices.U.K.

(1)This section has effect in relation to any notice, directions or other document required or authorised by or under any provision of this Act or by the rules of a building society to be served on any person other than the [F694FCA and the PRA] but subject, in the case of notices or other documents to be given or sent to members of a building society, to any provision of its rules.

F695(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2)Any such document may be served on the person in question—

(a)by delivering it to him;

(b)by leaving it at his proper address; or

(c)by sending it by post to him at that address.

[F696(2A)The reference in subsection (2)(a) to delivering a document to a person includes a reference to sending it electronically to an electronic address which that person has notified for the purpose in accordance with express provision made by this Act.]

(3)Any such document may—

(a)in the case of a building society, be served on the secretary of the society;

(b)in the case of a body corporate (other than a building society), be served on the secretary or clerk of that body;

(c)in the case of a partnership, be served on any partner;

(d)in the case of an unincorporated association other than a partnership, be served on any member of its governing body.

(4)For the purposes of this section and section 7 of the M20Interpretation Act 1978 (service of documents) in its application to this section, the proper address of any person is—

(a)in the case of a building society or its secretary, the address of its principal office;

(b)in the case of a member of a building society, his registered address;

(c)in the case of a director or the chief executive of a building society, his officially notified address;

(d)in the case of a body corporate (other than a building society) its secretary or clerk, the address of its registered or principal office in the United Kingdom;

(e)in the case of an unincorporated association (other than a partnership) or a member of its governing body, its principal office in the United Kingdom;

and, in any other case, his last-known address (whether of his residence or of a place where he carries on business or is employed).

Textual Amendments

F695S. 115(1A) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Marginal Citations

[F697115ADeemed agreement to use of web siteU.K.

(1)For the purposes of this Act, a person is to be taken to have agreed with a building society to access a document, information or facility on a web site if—

(a)the person has been asked individually by the society to agree to access documents, information or facilities generally, or documents, information or facilities of the description in question, on a web site, and

(b)the society has not received a response within the period of 28 days beginning with the date on which the society's request was received.

This is subject to subsections (2) to (4).

(2)A person is not to be taken to have so agreed if the society's request—

(a)did not state clearly what the effect of a failure to respond would be, or

(b)was sent less than 12 months after a previous request made to the person for the purposes of this section in respect of the same or a similar description of document, information or facility.

(3)A person who is taken to have made an agreement by virtue of subsection (1) may revoke the agreement.

(4)Subsection (1) does not apply in relation to the following documents—

(a)a statement required to be sent to members by paragraph 1(1) of Schedule 16 (statements in connection with proposed mergers);

(b)a merger statement (within the meaning of Part 2 of that Schedule) required to be sent to members by paragraph 3 of that Schedule;

(c)a transfer statement or transfer summary (within the meaning of Part 1 of Schedule 17) required to be sent to members by paragraph 4(1) or (2) of that Schedule;

(d)a transfer proposal notification (within the meaning of Part 1A of Schedule 17) required to be sent to members by paragraph 5B(1) of that Schedule.

Textual Amendments

115BRight to hard copy versionU.K.

(1)Where a person has received a document or information from a building society otherwise than in hard copy form, the person is entitled to require the society to send the person a version of the document or information in hard copy form.

(2)The society must send the document or information in hard copy form within 21 days of receipt of the request from the person.

(3)The society may not make a charge for providing the document or information in that form.

(4)Subsection (1) does not apply if the recipient of the document or information is the FCA or the PRA.

(5)A building society that fails to comply with this section is to be treated as having contravened rules made under section 137A of the Financial Services and Markets Act 2000.

(6)For the purposes of this section a person is treated as receiving a document or information from a building society if—

(a)the society is required by this Act to send the document or information to the person, and

(b)the requirement to send it is treated as satisfied.

(7)For the purposes of this section—

(a)a document or information is sent or supplied in hard copy form if it is sent or supplied in a paper copy or similar form capable of being read, and

(b)a document or information can be read only if it can be read with the naked eye, or (to the extent that it consists of images) it can be seen with the naked eye.

Textual Amendments

115COther agreed forms of communicationU.K.

(1)A document or information that is sent or supplied by a building society otherwise than in hard copy form or electronically or by means of a web site is validly sent or supplied if it is sent or supplied in a form or manner that has been agreed by the intended recipient.

(2)For the purposes of this section “hard copy form” is to be read in accordance with section 115B(7).]

Textual Amendments

[F698116 Form of documents.U.K.

(1)The [F699FCA and the PRA may each] , by directions under this section, make provision with respect to the form of, and the particulars to be included in, any document to be sent to it under this Act.

[F700(1A)The PRA and the FCA must each consult the other before issuing a direction under this section if the document in question is required to be sent to both of them.]

(2)The directions have effect subject to any other provision of or made under this Act.]

Textual Amendments

F698S. 116 substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 195 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

117 Financial year of building societies.U.K.

[F701(1)A building society's financial years (apart from its final financial year) are determined according to its year-end date in each calendar year.

(1A)The year-end date of a building society established before 25th August 1894 is—

(a)the date up to which, as at 1st January 1987, the accounts of the society were annually made up, or

(b)if the society has, at any time before the day on which subsection (1) comes into force (“the relevant day”), altered its financial year in exercise of a power within subsection (1B), 31st December.

(1B)The powers referred to in subsection (1A)(b) are—

(a)the power conferred by section 70(2) of the Building Societies Act 1960,

(b)the power conferred by section 128(2) of the Building Societies Act 1962, and

(c)the power conferred by subsection (3) of this section (as it had effect immediately before the relevant day).

(1C)The year-end date of a building society established on or after 25th August 1894 and before the relevant day is 31st December.

(1D)The year-end date of a building society established on or after the relevant day is the last day of the month in which the anniversary of its establishment falls.

(1E)The financial year of a building society established before the relevant day is the period of 12 months ending with the year-end date of the society (but see subsection (1G)).

(1F)In the case of a building society established on or after the relevant day—

(a)the initial financial year of the society shall be the period of more than 6 months, but not more than 18 months, beginning with the date of its establishment and ending with its year-end date, and

(b)its subsequent financial years are successive periods of 12 months beginning immediately after the end of the previous financial year and ending with its year-end date (but see subsection (1G)).

(1G)The final financial year of a building society is a period of less than 12 months that begins immediately after the end of the previous financial year and ends with the date as at which the society makes up its final accounts.

(1H)This section has effect subject to section 117A (alteration of financial year).]

F702(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F702(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F701S. 117(1)-(1H) substituted for s. 117(1) (18.2.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 15(2) (with Sch. 9 para. 18)

[F703117AAlteration of financial yearU.K.

(1)A building society may by notice given to the FCA specify a new year-end date.

(2)A notice given under subsection (1) has effect in relation to—

(a)the financial year in which the notice is given (“the current financial year”), and

(b)subsequent financial years.

(3)The notice must state whether the current financial year—

(a)is to be shortened, so as to come to an end on the first occasion on which the new year-end date falls or fell after the beginning of the current financial year, or

(b)is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the current financial year.

(4)A notice extending a building society's financial year is not effective if given less than 5 years after the end of an earlier financial year of the society that was extended under this section.

(5)A financial year of a building society may not be extended so as to exceed 18 months and a notice under subsection (1) is ineffective if the current financial year as extended in accordance with the notice would exceed that limit.]

Textual Amendments

[F704118 Qualifying asset holding for certain powers.U.K.

(1)This section has effect for determining for the purposes of this Act whether, in any financial year, a building society has a “qualifying asset holding”.

(2)A building society has a qualifying asset holding in any financial year, if, and only if, the aggregate value of its total commercial assets, as shown in its annual accounts for the previous year, is not less than £100 million or such other amount as may be substituted for it under subsection (3) below.

(3)The Commission, with the consent of the Treasury, may by order made by statutory instrument substitute for the amount for the time being specified in subsection (2) above such other amount as the Commission considers appropriate.

(4)An order under subsection (3) above may contain such transitional provisions as the Commission considers necessary or expedient.

(5)An instrument containing an order under subsection (3) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F704S. 118 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 52, Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxx)(cc)(xv)

F705118A. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F705S. 118A repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

119 Interpretation.U.K.

(1)In this Act, except where the context otherwise requires—

[F742(1ZA)In this Act references to the Bank of England do not include the Bank acting in its capacity as the Prudential Regulation Authority.]

[F743(1A)Any reference in this Act to the seal of the [F744FCA] is a reference to the seal provided for in regulations made under section 109(1)(b) of the Friendly Societies Act 1974 (and not to the [F745FCA’s] common seal).]

(2)In relation to [F746loans] secured on land in Scotland, “mortgage” means a heritable security, “mortgagor” and “mortgagee” mean respectively the debtor and creditor in a heritable security and connected expressions shall be construed accordingly.

F747(2A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F748(2B). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F749(2C). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)For the purposes of any provision of this Act referring to the value of a person’s shareholding in a building society—

(a)the value of a person’s shares shall be taken as the amount standing to his credit in respect of payments made F750... on the shares and interest credited F750... by way of capitalisation; and

(b)shares held by a person to whom, as the holder of the share, the society has made [F751a loan], shall be disregarded.

[F752(3A)Any reference in this Act (however expressed) to loans being owed to a building society or a subsidiary undertaking of a building society is a reference to their being so owed either at law or in equity.]

[F753(4)Subject to [F754section 9A(7)], the value in sterling of—

(a)any transaction effected by or with a building society or connected undertaking in another currency, or

(b)any assets or liabilities of a building society or connected undertaking denominated in another currency,

shall be determined for any purpose of this Act in accordance with directions given by the [F755appropriate authority] under this subsection.]

F756(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F706Definitions in s. 119(1) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 53(1)(a), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pts. I(j)(k)(l)(xiv), II(w)(y)(z)(xxxi)(cc)(xvi)

F707Words in s. 119(1) inserted (3.1.1995) by 1994 c. 40, ss. 39, 82(2)(e), Sch. 11 para. 7(6)

F708Words in s. 119(1) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 7

F711Definition of “authorisation" in s. 119(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F714Definition in s. 119(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(c); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F716Words in s. 119(1) inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 7

F717Definitions of “the central office", “the Chief Registrar", “the Commission" and “the criteria of prudent management" in s. 119(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F719Definition in s. 119(1) inserted (9.6.1997 for certain purposes only, 1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(d); S.I. 1997/1427, art. 2(k)(n)(xii); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F720Definition in s. 119(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(e); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F721Words in S. 119(1) repealed (1.12.2001) by S.I. 2001/3649 art. 199(3)

F722Words in the definition of “deferred shares" s. 119(1) substituted (17.8.2001 for certain purposes otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 197(a)(iv) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F723Definition in s. 119(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(g); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F724Definition in s. 119(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(h); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F725Definition of “Investor Protection Board" in s. 119(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F726Definitions in s. 119(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(i); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F727Definition in s. 119(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(j); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F728Definition in s. 119(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(k); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F729Definition of “non-EEA laws" in s. 119(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F732Definition in s. 119(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(l); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F734Definition of “prescribed" in s. 119(1) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F736Definition in s. 119(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(m); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F737Definition in s. 119(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(n); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F738Definitions in s. 119(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(1)(o); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F743S. 119(1A) inserted (17.8.2001 for certain purposes otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 197(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F746Word in s. 119(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(2); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F747S. 119(2A)(2C) repealed (1.12.2001) by S.I. 2001/3649 art. 1999(4)

F749S. 119(2A)(2C) repealed (1.12.2001) by S.I. 2001/3649 art. 1999(4)

F750Words in s. 119(3)(a) ceased to have effect (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 53(3)(a); and repealed (1.12.1997) by 1997 c. 32, s. 46(2), Sch. 9; S.I. 1997/1427, art. 2(k)(n)(xiii); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(k)(l)(xiv)(o)(vii)

F751Words in s. 119(3)(b) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(3)(b); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F752S. 119(3A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(4); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F753S. 119(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 53(5); S.I. 1997/2668, art. 2, Sch. Pts. I(j)(l)(xiv), II(w)(z)(xxxi)

F754Words in S. 119(4) substituted (17.8.2001 for certain purposes otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 197(c)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F756S. 119(5) repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

Modifications etc. (not altering text)

C147S. 119(1): Functions of the Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

C148Definition of “total commercial assets" modified by S.I. 1986/2168, art. 4(2)(a)(ii)(3)

Marginal Citations

[F757119A.Meaning of “associated undertaking”U.K.

(1)In this Act “associated undertaking”, in relation to a building society, means an undertaking (other than a subsidiary undertaking of the society)—

(a)in which the society (or the group of which the society is a member) holds a participating interest, and

(b)over whose operating and financial policy the society (or group) exercises a significant influence.

(2)A “participating interest” means an interest in the shares of the undertaking held on a long term basis for the purpose of securing a contribution to the activities of the society (or group) by the exercise of control or influence arising from or related to that interest.

(3)For this purpose—

(a)a holding of 20% or more of the shares of an undertaking is presumed to be a participating interest unless the contrary is shown;

(b)an “interest in shares” includes—

(i)an interest that is convertible into an interest in shares, and

(ii)an option to acquire shares or any such interest,

and an interest or option falls within sub-paragraph (i) or (ii) notwithstanding that the shares to which it relates are, until the conversion or the exercise of the option, unissued;

(c)an interest held on behalf of an undertaking is treated as held by it.

(4)A holding of 20% or more of the voting rights in an undertaking is presumed to result in the exercise of such influence as is mentioned in subsection (1)(b), unless the contrary is shown.

(5)For this purpose—

(a)the voting rights in an undertaking means the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote on all, or substantially all, matters affecting the undertaking; and

(b)the provisions of paragraphs 5 to 11 of Schedule 7 to the Companies Act 2006 (rights to be taken into account and attribution of rights) apply in determining whether the society (or the group) holds 20% or more of the voting rights in an undertaking.

(6)References in this section to the group of which the society is a member at any time are to the undertakings that would fall to be included in the consolidation if consolidated group accounts were to be drawn up by the society at that time.

(7)An undertaking is not an “associated undertaking” of a building society for the purposes of this Act if, in such accounts, it would fall to be dealt with as a joint venture (that is, an undertaking managed jointly with one or more undertakings not included in the consolidation).]

Textual Amendments

120 Amendments, repeals, revocations and transitional and saving provisions.U.K.

(1)The enactment specified in Schedule 18 to this Act shall have effect with the amendments made by that Schedule.

(2)Subject to the saving provisions of Schedule 20, and of any order under section 121, the enactments specified in Schedule 19 to this Act are hereby repealed or revoked to the extent specified in the third column of that Schedule.

(3)Where any enactment amended or repealed or revoked by subsection (1) or (2) above extends to any part of the United Kingdom, the amendment or repeal or revocation extends to that part.

(4)The transitional and saving provisions of Schedule 20 to this Act shall have effect.

Modifications etc. (not altering text)

C149S. 120(2) excluded by S.I. 1986/2168, art. 2(2)

121 Power to make transitional and saving provisions.U.K.

(1)The Treasury may, by order made by statutory instrument, make such provision as appears to them to be necessary or expedient for the purposes of the transition to the provisions of this Act from the existing enactments applicable in England and Wales, Scotland or Northern Ireland to building societies.

(2)An order under this section may—

(a)modify any of the existing enactments or provisions of this Act, in particular in their application to proceedings pending before the Chief Registrar or the Commission;

(b)create criminal offences or otherwise provide for the enforcement of obligations imposed by or under the order;

(c)provide for the charging of fees but not of any charge in the nature of taxation.

(3)An order under this section which contains any provision authorised by subsection (2)(b) or (c) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(4)In this section “the existing enactments” means the enactments in force at the passing of this Act, including any enactment amended by Schedule 18 to this Act.

Modifications etc. (not altering text)

122 Northern IrelandU.K.

(1)F758... subject to section 120(3), this Act extends to Northern Ireland.

(2)Subject to any Order made by virtue of subsection (1)(a) of section 3 of the M25Northern Ireland Constitution Act 1973 building societies shall not be a transferred matter for the purposes of that Act but shall for the purposes of subsection (2) of that section be treated as specified in Schedule 3 to that Act.

Textual Amendments

F758Words in s. 122(1) repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

Marginal Citations

F759123. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

Textual Amendments

F759S. 123 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Provision of conveyancing services by recognised institutions and practitionersE+W+S

Prospective

F760124 Recognition of building societies, other institutions and individuals as suitable to provide conveyancing services.E+W+S

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F760S. 124 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

GeneralU.K.

125 Short title.U.K.

This Act may be cited as the Building Societies Act 1986.

126 Commencement.U.K.

(1)This Act shall come into operation as follows.

(2)Part I (and Schedule 1) shall come into operation at the end of the period of two months beginning with the day on which this Act is passed.

(3)The remaining provisions of this Act, except sections 121, F761... 125, this section, in Schedule 20, paragraph 7 (and section 120(4) so far as it relates to that paragraph) F761..., shall come into operation on such day as the Treasury may appoint by order made by statutory instrument and different days may be appointed for different provisions or different purposes.

F762(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(5)Any reference to the commencement of or the commencement date for a provision of this Act is a reference to the date appointed under this section for that provision to come into operation.

Textual Amendments

F761Words in s. 126(3) repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

F762S. 126(4) repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

Modifications etc. (not altering text)

C151Power of appointment conferred by s. 126(3) partly exercised: S.I. 1986/1560, 1989/1083

C152Power of appointment conferred by s. 126(4) not yet exercised

SCHEDULES

F763SCHEDULE 1U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F763Sch. 1 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Sections 5, 93, 94 and 97.

SCHEDULE 2U.K. Establishment, Incorporation and Constitution of Building Societies

Modifications etc. (not altering text)

C155Sch. 2 modified (3.1.1995) by 1994 c. 40, ss. 17(3), 82(2)

C156Sch. 2 applied (with modifications) (7.4.2010) by The Building Societies (Financial Assistance) Order 2010 (S.I. 2010/1188), arts. 1(2), 8

Part IU.K. General

Requirements for establishmentU.K.

1(1)Any ten or more persons may establish a society under this Act by taking the following steps—U.K.

(a)agreeing upon the purpose or principal purpose of the society and upon the extent of its powers in a memorandum the provisions of which comply with the requirements of this Part of this Schedule;

(b)agreeing upon rules for the regulation of the society which comply with the requirements of this Part of this Schedule;

(c)sending to the [F766FCA] [F767three] copies of the memorandum and the rules, each copy signed by at least ten of those persons (or, if there are only ten, by all of them) and by the intended secretary.

(2)Where copies of the memorandum and rules are sent to the [F766FCA] in accordance with sub-paragraph (1)(c) above, the [F766FCA] , if satisfied that—

(a)the provisions of the memorandum are in conformity with this Act and any instruments under it,

(b)the rules are in conformity with this Act,

(c)the intended name of the society is not, in its opinion, undesirable,

shall register the society and issue it with a certificate of incorporation.

(3)On registering a building society under sub-paragraph (2) above, the [F766FCA] shall—

(a)retain and register one copy of the memorandum and of the rules,

(b)return another copy to the secretary of the society, together with a certificate of registration, and

(c)keep another copy, together with a copy of the certificate of incorporation, and of the certificate of registration of the memorandum and the rules, in the public file of the society.

F768[(4)In this Act “memorandum”, in relation to a building society, means the memorandum of the purpose and the extent of the powers of the society including the record of any alteration under paragraph 4 below.]

Textual Amendments

F767Words in Sch. 2 para. 1(1)(c) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(b) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F768Sch. 2 Pt. I para. 1(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(2); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

The memorandumU.K.

2[F769(1)The memorandum of a building society shall state the purpose or principal purpose of the society to be that of making loans which are secured on residential property and are funded substantially by its members.U.K.

(2)The memorandum of a building society shall specify—

(a)the name of the society and the address of its principal office;

(b)any purposes of the society other than that mentioned in sub-paragraph (1) above; and

(c)the powers of the society.]

(4)The provisions of the memorandum of a building society, as read with the provisions of ths Act as in force for the time being, are binding upon—

(a)each of the members and officers of the society; and

(b)all persons claiming on account of a member or under the rules;

and all such members, officers and persons so claiming and all persons dealing with the society shall be taken to have notice of those provisions.

[F770(5)Where any adoptable power conferred by virtue of an instrument under a provision of this Act ceases, by reason of the amendment or revocation of the instrument, to be available to building societies or building societies of any description, every society affected by the amendment or revocation shall annex to its memorandum a note of the fact that, as from the operative date of the instrument, it no longer has that power and shall send a copy of the note to the [F771Authority] which shall keep the copy in the public file of the society.]

Textual Amendments

F769Sch. 2 Pt. I para. 2(1)(2) substituted for Sch. 2 Pt. I para. 2(1)-(3) (1.12.1997 in specified cases and for specified purposes and otherwise ) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F770Sch. 2 Pt. I para. 2(5) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(3), 47(3), Sch. 7 para. 56(4), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxiii)(cc)(xviii)

F771Words in Sch. 2 para. 2(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 13(1), Sch. 3 Pt. II para. 200(a); S.I. 2001/3538, art. 2(1)

The rulesU.K.

3(1)The rules of a building society shall provide for the matters specified in the Table in sub-paragraph (4) below.U.K.

(2)The rules of a building society are binding upon each of the members and officers of the society and on all persons claiming on account of a member or under the rules; and all such members, officers and persons (but no others) shall be taken to have notice of the rules.

(3)Nothing in this paragraph shall be taken to authorise any provision to be made which is inconsistent with this Act or an instrument made under it by F772. . . the Treasury or to affect the operation of any provision of this Act making rules void to any specified extent.

(4)The Table referred to in sub-paragraph (1) above is as follows:—

TABLE OF MATTERS TO BE COVERED BY THE RULES

  • 1. The name of the society and the address of its principal Office.

  • 2. The manner in which the [F773funds of the society are] to be raised.

  • 3. The manner in which the terms are to be determined on which shares are to be issued and the manner in which shareholders are to be informed of changes in the terms on which their shares are held.

  • 4. Whether any preferential or deferred shares are to be issued and, if so, within what limits.

  • 5. The manner in which [F774loans] are to be made and repaid, and the conditions on which a borrower may redeem the amount due from him before the end of the period for which the [loan] was made.

  • 6. The manner in which losses are to be ascertained and provided for.

  • 7. The manner in which membership is to cease.

  • 8. The manner of remunerating the auditors.

  • 9. As respects directors—

    • (a) the manner of electing them and whether they may be co-opted;

    • (b) any conditions which must be satisfied with respect to the holding of shares in the society if a person is to become, or is to remain, a director;

    • (c) the manner of remunerating and, where it is not to be fixed by resolution at the annual general meeting, the maximum amount of the remuneration to be paid to, directors; and

    • (d) the circumstances in which pensions may be awarded to persons by virtue of their office as director and the method of determining the terms of such pensions.

  • 10. The powers and duties of the board of directors.

  • 11. The custody of the mortgage deeds and other securities belonging to the society.

  • 12. The form, custody and use of the society’s common seal.

  • 13. The calling and holding of meetings and, in particular—

    • (a) the right of members to requisition meetings;

    • (b) the right of members to move resolutions at meetings;

    • (c) the manner in which notice of any resolutions to be moved at meetings is to be given to members;

    • (d) the procedure to be observed at meetings;

    • (e) the form of notice for the convening of a meeting and the manner of its service;

    • (f) the voting rights of members, the right to demand a poll and the manner in which a poll is to be taken.

  • 14. The entitlement of members to participate in the distribution of any surplus assets after payments to creditors [F775on the dissolution by consent] of the society.

  • [F77615. The entitlement of members, on the winding up of the society, to participate in the distribution of any surplus assets after payments are made in satisfaction of the society’s liabilities to creditors and shareholding members under the companies winding up legislation as modified by Parts 1 to 3 of Schedule 15 to this Act.]

[F777(5)Nothing in the rules of a society shall prevent the service of a notice or other document by the society—

(a)by sending it electronically to an electronic address notified for the purpose in accordance with express provision made by this Act; or

(b)by its publication on a web site in accordance with any such provision.]

Textual Amendments

F772Words in Sch. 2 para. 3(3) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F773Words in Sch. 2 Pt. I para. 3(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(5)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F774Words in Sch. 2 Pt. I para. 3(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(5)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

Requirements for alteration of purpose, powers and rulesU.K.

4[F778(1)A building society may by special resolution alter its purposes, alter its powers or alter its rules.]U.K.

(2)Where a building society alters its purpose or powers or its rules under this paragraph, it shall send to the [F779FCA] —

(a)three copies of a record of the alteration signed by the secretary; and

(b)a statutory declaration by the secretary that the alteration was effected by a resolution passed as a special resolution and that the record is a true record of the resolution.

(3)On altering its purpose or powers or its rules under this paragraph the building society shall determine the date on which it intends the alteration to take effect; and the record of the alteration shall specify that date (in this paragraph referred to as “the specified date”).

(4)Where copies of a record of an alteration of a building society’s purpose, powers or rules are sent to the [F780FCA] under sub-paragraph (2) above and the [F780FCA] is satisfied that the alteration is in conformity with this Act and (where applicable) any instruments under it, the [F780FCA] shall, [F781subject to paragraph 19] below—

(a)retain and register one of the copies,

(b)return another to the secretary of the society together with a certificate of registration of the alteration, and

(c)keep another copy, together with a copy of the certificate of registration of the alteration, in the public file of the society.

(5)An alteration of the purpose or powers or of the rules of a building society under this paragraph shall take effect on the specified date or, if registration of the alteration is not effected under sub-paragraph (4) above until a later date, that later date.

(6)Any provision in the rules of a building society that the memorandum or rules may be altered without passing a special resolution shall be void.

(7)If a building society arranges for the publication in consolidated form of its rules or memorandum as altered for the time being, it shall send a copy to the [F782FCA] and the [F782FCA] —

(a)shall keep the copy in the public file of the society, but

(b)shall not register the copy.

(8)If a building society fails to comply with sub-paragraph (2) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F778Sch. 2 Pt. I para. 4(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(6); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F781Words in Sch. 2 Pt. I para. 4(4) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(3), 47(3), Sch. 7 para. 56(7), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxiii)(cc)(xviii)

Modifications etc. (not altering text)

C157Sch. 2 para. 4(1)(3) modified (3.1.1995) by 1994 c. 40, ss. 17(2), 82(2)

MembershipU.K.

5[F783(1)The rules of a building society shall provide that no person shall be a member of the society unless he is a shareholding member or a borrowing member or both.U.K.

(2)In this Act, in relation to a building society—

(2A)If the rules of a building society so provide, an individual shall cease to be a borrowing member at any time if at that time the society—

(a)takes possession of, or exercises its power of sale in relation to, the whole or any part of the land on which the loan is secured; or

(b)obtains an order for foreclosure absolute or, in Scotland, foreclosure in respect of the whole or any part of that land.

(2B)Unless the rules of a building society so provide, an individual shall not be a borrowing member at any time if at that time the loan is owed to the society in equity rather than at law.]

(3)A person who is a minor—

(a)may, if the rules do not otherwise provide, be admitted as a member of a building society and give all necessary receipts; but

(b)may not [F784propose a resolution,] vote or hold any office in the society; and

(c)may not [F785join in requisitioning a special meeting or] nominate, or join in nominating, a person for election as a director of the society.

Textual Amendments

F783Sch. 2 Pt. I para. 5(1)-(2B) substituted for Sch. 2 para. 5(1)(2) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(1), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

F784Words in Sch. 2 Pt. I para. 5(3)(b) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(2)(a), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

F785Words in Sch. 2 Pt. I para. 5(3)(c) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(2)(b), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

Liability of membersU.K.

[F7866(1)The liability at any time of a shareholding member of a building society shall be limited to the amount which, at that time, has been actually paid, or is in arrear, on his shares in the society.U.K.

(2)The liability at any time of a borrowing member of a building society shall be limited to the amount which, at that time, is payable under the mortgage or other security by which his indebtedness to the society in respect of the loan is secured.]

Textual Amendments

F786Sch. 2 Pt. I para. 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(3), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

Joint shareholdersU.K.

7(1)Two or more persons may jointly hold shares in a building society and the following provisions of this paragraph shall apply to any shares so held.U.K.

(2)In this paragraph, in relation to any shares jointly held, “representative joint holder” means that one of the joint holders who is named first in the records of the society.

(3)Except where the rules of the society otherwise provide, any notice or other document may be given or sent by the society to the joint holders by being given or sent to the representative joint holder; but this sub-paragraph shall not prevent any of the joint holders from exercising the rights under this Act of a member of a building society to obtain from the society on demand a copy of F787... the annual accounts and the annual business statement.

(4)For the purpose of determining—

(a)who is entitled to vote in an election of directors of the society;

(b)who is qualified to vote on a resolution of the society, and

(c)where it is relevant, the number of votes a person may then give,

the shares shall be treated as held by the representative joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares (other than the representative joint holder) shall not be entitled to vote in any such election or qualified to vote on any such resolution.

(5)For the purposes of sections 87 and 93 to 102 the shares shall be treated as held by the representative joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares (other than the representative joint holder) shall not be regarded as a member of the society for the purposes of those sections.

[F788(5A)In its application to section 100, sub-paragraph (5) above shall have effect subject to the provisions of section 102A.]

(6)The representative joint holder (but none of the other joint holders) shall have the right to join in making an application under section 56 and any reference in that section to the total membership of a building society shall be construed accordingly.

(7)In the register to be maintained under paragraph 13 below the entry of that one of the joint holders who is the representative joint holder shall indicate that fact.

(8)The joint holders shall be entitled to choose the order in which they are named in the records of the society.

Textual Amendments

F787Words in Sch. 2 para. 7(3) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 7(b)

F788Sch. 2 para. 7(5A) inserted (1.5.1995 with application as mentioned in s. 2(2) of the amending Act) by 1995 c. 5, s. 1(2)

Joint borrowersU.K.

8(1)Where [F789a loan] secured on land is made by a building society to two or more persons jointly the following provisions of this paragraph shall apply to their rights as borrowing members of the society.U.K.

(2)In this paragraph, in relation to any rights of theirs as borrowing members, “representative joint borrowers” means that one of the joint borrowers who is named first in the records of the society.

(3)Except where the rules of the society otherwise provide, any notice or other document may be given or sent by the society to the joint borrowers by being given or sent to the representative joint borrowers; but this sub-paragraph shall not prevent any of the joint borrowers from exercising the rights under this Act of a borrowing member of a building society to obtain from the society on demand a copy of F790... the annual accounts and the annual business statement.

(4)For the purpose of determining—

(a)who is entitled to vote in any election of directors of the society, and

(b)who is qualified to vote on a resolution of the society,

the rights of the joint borrowers as borrowing members of the society shall be treated as the rights of the representative joint borrower alone; and accordingly a person who is a member of the society by reason only of being a joint borrower (other than the representative joint borrower) shall not be entitled to vote in any such election or qualified to vote on any such resolution.

(5)For the purposes of sections 87 and 93 to 102 the rights of the joint borrowers as borrowing members of the society shall be treated as the rights of the representative joint borrower alone; and accordingly a person who is a member of the society by reason only of being a joint borrower (other than the representative joint borrower) shall not be regarded as a borrowing member of the society for the purposes of those sections.

(6)The representative joint borrower (but none of the other joint borrowers) shall have the right to join in making an application under section 56 and any reference in that section to the total membership of a building society shall be construed accordingly.

(7)In the register to be maintained under paragraph 13 below the entry of that one of the joint borrowers who is the representative joint borrower shall indicate that fact.

(8)The joint borrowers shall be entitled to choose the order in which they are named in the records of the society.

Textual Amendments

F789Words in Sch. 2 para. 8(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(8); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F790Words in Sch. 2 para. 8(3) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 7(b)

Use and change of nameU.K.

9(1)The common seal of a building society shall bear the registered name of the society.U.K.

F791[(2)Every building society shall paint or affix, and keep painted or affixed, its registered name on the outside of every office or place in which its business is carried on, in a conspicuous position and in letters easily legible.

(2A)Every building society shall state its registered name in legible characters in all of the following documents, [F792in every electronic communication containing any of the following documents and on every web site on which any of the following documents is published,] namely—

(a)its business letters;

(b)its account statements, including those relating to deposit, share, loan or mortgage accounts;

(c)its passbooks;

(d)its notices and publications, including all documents sent to members;

(e)its invoices and receipts;

(f)its letters of credit and any instruments creating or acknowledging its indebtedness;

(g)its contracts, agreements, mortgages and deeds; and

(h)its bills of exchange, promissory notes, endorsements, cheques and orders for money or goods.]

(3)A building society may change its name by special resolution.

(4)Where a society changes its name in accordance with this paragraph notice of the change of name shall be sent to the [F793FCA] and, unless the [F793FCA] is of the opinion that the changed name is undesirable, the [F793FCA] shall register the notice of the change of name and give the society a certificate of registration.

(5)A change of name shall take effect on the date on which the certificate of registration under sub-paragraph (4) above is issued or on such later date as may be specified in the certificate.

(6)The [F793FCA] shall keep a copy of the certificate of registration issued under sub-paragraph (4) above in the public file of the society.

(7)A change of name shall not affect the rights and obligations of the society or of any of its members or of any other person concerned.

[F794(8)For the purposes of this paragraph and paragraphs 10 to 10C below “registered name”, in relation to a building society, means the name of the society which is for the time being registered with the [F793FCA] .]

Textual Amendments

F791Sch. 2 Pt. I para. 9(2)(2A) substituted for Sch. 2 para. 9(2) (1.12.1997) by 1997 c. 32, s. 36(1); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F794Sch. 2 Pt. I para. 9(8) inserted (1.12.1997) by 1997 c. 32, s. 36(2); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

Offences relating to society’s nameU.K.

[F79510(1)If a building society does not—U.K.

(a)paint or affix its registered name; or

(b)keep its registered name painted or affixed,

as required by paragraph 9(2) above, the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(2)A building society which, without reasonable excuse, does not comply with paragraph 9(2A) above shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(3)If an officer of a building society or a person on its behalf issues or authorises the issue of any document mentioned in paragraph 9(2A)(a) to (g) above, in which the society’s registered name is not stated as required by that paragraph, he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(4)If an officer of a building society or a person on its behalf signs or authorises to be signed on behalf of the building society any document mentioned in paragraph 9(2A)(h) above in which the society’s registered name is not stated as required by that paragraph—

(a)he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and

(b)he shall be further personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount of it (unless it is duly paid by the building society).

(5)If a building society fails to send to the [F796FCA] a notice which it is required to send to it under paragraph 9(4) above, the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.]

Textual Amendments

F795Sch. 2 Pt. I para. 10 substituted (1.12.1997) by 1997 c. 32, s. 36(3); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F797[Restrictions on business names]U.K.

Textual Amendments

F797Cross-heading inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

[F79810A(1)This paragraph and paragraph 10B below apply where a building society carries on business under a name other than the following, namely—U.K.

(a)its registered name;

(b)its registered name with the omission of the words “Building Society”; and

(c)its registered name with an addition which merely indicates that the business is carried on in succession to a former building society with which it has merged.

(2)The society shall not, without the written approval of the [F799FCA] , carry on business under a name which—

(a)would be likely to give the impression that the business is connected with Her Majesty’s Government or with any local authority, or

(b)includes any word or expression for the time being specified in regulations made under sub-paragraph (3) below.

(3)The [F800Treasury may], by regulations—

(a)specify words or expressions for the use of which as or as part of a business name the approval of the [F801FCA] is required by sub-paragraph (2) above, and

(b)in relation to any such word or expression, specify a Government department or other body for the purposes of sub-paragraph (4) below.

(4)Where the society proposes to carry on business under a name which is or includes any such word or expression, and a government department or other body is specified under sub-paragraph (3)(b) above in relation to that word or expression, the society shall—

(a)request (in writing) the relevant body to indicate whether (and if so why) it has any objections to the proposal, and

(b)submit to the [F802FCA] a statement that such a request has been made and a copy of any response received from the relevant body.

(5)For the purposes of this paragraph “local authority” means—

(a)any local authority within the meaning of the M29Local Government Act 1972, the Common Council of the City of London or the Council of the Isles of Scilly;

(b)any local authority within the meaning of the M30Local Government etc. (Scotland) Act 1994;

(c)any district council within the meaning of the M31Local Government Act (Northern Ireland) 1972.]

Textual Amendments

F798Sch. 2 Pt. I paras. 10A-10C inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F800Words in Sch. 2 para. 10A(3) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(e) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C158 Sch. 2 para. 10A(3); Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; 2001/3538 art. 2(1)

Marginal Citations

F803[Use of business names: required disclosure]U.K.

Textual Amendments

F803Cross-heading inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

[F80410B(1)Paragraph 9(2A) above shall have effect as if after the words “in legible characters” there were inserted the words “ which are reasonably prominent ”.U.K.

(2)The society shall in all documents mentioned in paragraph 9(2A) above state in legible characters an address in the United Kingdom at which service of any document relating in any way to the business will be effective.

(3)The society shall also in any premises where the business is carried on and to which the members of the society, the customers of the business or suppliers of any goods or services to the business have access, display in a prominent position so that it may easily be read by such persons a notice containing the society’s registered name and the address mentioned in sub-paragraph (2) above.

(4)The society shall secure that the registered name and the address mentioned in sub-paragraph (2) above is immediately given, by written notice, to any person with whom anything is done or discussed in the course of the business and who asks for the registered name or the address.

(5)The [F805Treasury may], by regulations require a notice under sub-paragraph (3) or (4) above to be displayed or given in a specified form.]

Textual Amendments

F804Sch. 2 Pt. I paras. 10A-10C inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F805Words in Sch. 2 para. 10B(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(e) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C159Sch. 2 para. 10B(5); Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

F806[Use of business names: supplementary]U.K.

Textual Amendments

F806Cross-heading inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

[F80710C(1)A building society which contravenes paragraph 10A(2) above shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.U.K.

(2)A building society which, without reasonable excuse, does not comply with paragraph 9(2A) or 10B(2), (3) or (4) above, or any regulations made under paragraph 10B(5) above, shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(3)Where paragraph 10A above applies any legal proceedings brought by the society to enforce a right arising out of a contract made in the course of the business in respect of which the society was, at the time the contract was made, in breach of paragraph 9(2A) or 10B(2), (3) or (4) above shall be dismissed if the defendant (or, in Scotland, the defender) to the proceedings shows—

(a)that he has a claim against the plaintiff (pursuer) arising out of that contract which he has been unable to pursue by reason of the plaintiff’s (pursuer’s) breach of paragraph 9(2A) or 10B(2), (3) or (4) above, or

(b)that he has suffered some financial loss in connection with the contract by reason of the latter’s breach of paragraph 9(2A) or 10B(2), (3) or (4) above,

unless the court before which the proceedings are brought is satisfied that it is just and equitable to let the proceedings continue.

(4)Sub-paragraph (3) above is without prejudice to the right of any person to enforce such rights as he may have against another person in any proceedings brought by that person.

(5)Regulations made under paragraph 10A(3) or 10B(5) above shall be made by statutory instrument subject to annulment by resolution of either House of Parliament.

(6)Such regulations may contain such transitional provisions and savings as the [F808Treasury think] fit, and may make different provision for different cases or classes of case.]

Textual Amendments

F807Sch. 2 Pt. I paras. 10A-10C inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F808Words in Sch. 2 para. 10C(6) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(f) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C160Sch. 2 para. 10C(6): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(1)

Change of principal officeU.K.

11(1)A building society may change its principal office—U.K.

(a)in such manner as its rules direct, or

(b)if there is no such direction in the rules, [F809by an ordinary resolution].

(2)Notice of any such change and of the date of it shall, within seven days after the change, be sent to the [F810FCA] and the [F810FCA] shall keep the notice in the public file of the society.

(3)It is not necessary to alter the memorandum or rules of a building society by reason only that its principal office is changed.

(4)If a building society fails to send to the [F810FCA] a notice which it is required to send to it under sub-paragraph (2) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F809Words in Sch. 2 Pt. I para. 11(1)(b) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 56(9); S.I. 1997/1427, art. 2(k)(n)(xv)

Societies to supply copies of rules etc.U.K.

12(1)A building society shall, on demand, give a copy of its statutory documents—U.K.

(a)free of charge, to any member of the society to whom a copy of those documents has not previously been given, and

(b)to any other person, upon payment of such fee as the society may require, not exceeding the prescribed amount.

(2)The reference in sub-paragraph (1) above to a copy of a building society’s statutory documents is a reference to—

(a)a printed copy of the society’s rules for the time being, with a copy of the certificate of incorporation of the society annexed to it, and

(b)a printed copy of the memorandum of the society for the time being.

(3)If a building society fails to comply with the requirements of sub-paragraph (1) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(4)In sub-paragraph (1) above the “prescribed amount” means £1 or such other amount as the [F811Treasury prescribe] by order made by statutory instrument.

Textual Amendments

F811Words in Sch. 2 para. 12(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(g) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C161Sch. 2 para. 12(4): Functions of Building Societies Commission transferred (1.12.2001) to Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; 2001/3538 art. 2(1)

Register of membersU.K.

13[F812(1)Every building society shall maintain a register of members showing—U.K.

(a)the name and [F813postal] address of each member; and

(b)whether each member is a shareholding member or a borrowing member or both.]

[F814(1A)Where a member has notified to the building society an electronic address for the purpose of receiving notices or documents required to be sent by the society under this Act, the register shall show—

(a)the electronic address in addition to the postal address of the member; and

(b)the purposes for which the electronic address has been notified.]

(2)The register shall be kept at the principal office or at such other place or places as the directors think fit.

(3)If a building society contravenes sub-paragraph (1) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(4)For the purposes of this Act “registered address” in relation to a member of a building society, means—

(a)the [F815postal] address shown in the register maintained under this paragraph, except in a case where paragraph (b) below applies;

(b)where the member has requested that communications from the society be sent to some other [F816postal] address, that other address.

Textual Amendments

F812Sch. 2 Pt. I para. 13(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(10); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

Exception to duties to send documentsU.K.

14(1)A building society is not obliged by any provision of this Act or its rules to send a notice or other document to a member in whose case the society has reason to believe that communications sent to him at his registered address are unlikely to be received by him.U.K.

(2)Where the requirement relates to notice of a meeting or postal ballot of the society, the society must, instead, comply with the advertising requirements of paragraph 35 below.

Right of members to obtain particulars from the registerU.K.

15[F817(1)At any time when a building society—U.K.

(a)has had its [F818permission under [F819Part 4A] of the Financial Services and Markets Act 2000 to accept deposits cancelled]; and

(b)has not [F820subsequently been given such permission],

a member of the society shall, subject to sub-paragraph (1A) below, have the right to obtain, from the register kept under paragraph 13 above, the names and addresses of members of the society, for the purpose of communicating with them on a subject relating to the affairs of the society.

(1A)Sub-paragraph (1) above shall not apply unless the member in question—

(a)is qualified under the rules of the society to join in a members’ requisition for a special meeting, or to join in nominating a person for election as a director; or

(b)would be so qualified if any requirements as to length of time a person must have been a shareholding or borrowing member were omitted.

(2)If, at any time not falling within sub-paragraph (1) above, a member of a building society who is qualified under the rules of the society to join in a members’ requisition for a special meeting, or to join in nominating a person for election as a director, makes a written application to the [F821FCA] for the right to obtain names and addresses from the register, the [F821FCA] —

(a)if satisfied that the applicant—

(i)requires that right for the purpose of communicating with members of the society on a subject relating to its affairs; and

(ii)has not, since making the application, voluntarily ceased to be a member of the society; and

(b)having regard to the interests of the members as a whole and to all the other circumstances; F822...

F822(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F823(2A)The [F821FCA] may charge a reasonable fee for considering an application under sub-paragraph (2) above.]

(3)Any direction under sub-paragraph (2) above may be given subject to such limitations or conditions as the [F821FCA] may think fit.

[F824(3A)The FCA must consult the PRA before giving a direction under sub-paragraph (2).]

(4)Before giving a direction under sub-paragraph (2) above, the [F821FCA] shall give particulars of the application to the building society and shall afford the society an opportunity of making representations with respect to the application; and the [F821FCA] shall, if the applicant or the society so requests, afford to the applicant and to the society an opportunity of being heard by it.

(5)A member entitled under this paragraph to obtain the names of members of a building society may apply in writing to the society, describing in the application the subject on which he proposes to communicate with other members of the society; and the society shall give him all necessary information as to the place or places where the register, or part of it, is kept, and reasonable facilities for inspecting the register and taking a copy of any names and addresses in the register.

(6)A building society shall not be obliged to disclose to a member making an application under this paragraph any particulars contained in the register other than the names of the members and their addresses, and may construct the register in such a way that it is possible to disclose the names and addresses to inspection without disclosing any such other particulars.

[F825(7)No information obtained under sub-paragraph (1) or (2) above or this sub-paragraph and relating to a member of the society may be disclosed except—

(a)with the consent of that member; or

(b)in the case of information obtained under sub-paragraph (1) or (2) above, for purposes connected with the purpose mentioned in that paragraph.

(8)Any person who discloses information in contravention of sub-paragraph (7) above shall be liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

F826(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F826(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F826(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

Textual Amendments

F817Sch. 2 Pt. I para. 15(1)(1A)(2) substituted for Sch. 2 para. 15(1)(2) (9.6.1997) by 1997 c. 32, s. 37(1); S.I. 1997/1427, art. 2(i)

F818Words in Sch. 2 para. 15(1)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(h)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F820Words in Sch. 2 para. 15(1)(b) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(h)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F822Sch. 2 para. 15(c) and the word “and" immediately preceding repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b),13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F823Sch. 2 para. 15(2A) inserted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(h)(v) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F825Sch. 2 Pt. I para. 15(7)-(11) inserted (9.6.1997) by 1997 c. 32, s. 37(2); S.I. 1997/1427, art. 2(i)

F826Sch. 2 para 15(9)-(11) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F827[Part IIU.K. Capacity of society and power of directors to bind it]

Textual Amendments

F827Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F828 Capacity of society not limited by its memorandum]U.K.

Textual Amendments

F828Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F82916(1)The validity of an act done by a building society shall not be called into question on the ground of lack of capacity by reason of anything included in the society’s memorandum.U.K.

(2)A member of a building society may bring proceedings to restrain the doing of an act which but for sub-paragraph (1) above would be beyond the society’s capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.

(3)It remains the duty of the directors of a building society to observe any limitations on their powers flowing from the society’s memorandum; and action by the directors which but for sub-paragraph (1) above would be beyond the society’s capacity may only be ratified by the society by special resolution.

(4)A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; relief from any such liability must be agreed to separately by special resolution.]

Textual Amendments

F829Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F830 Power of directors to bind society]U.K.

Textual Amendments

F830Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F83117(1)In favour of a person dealing with a building society in good faith, the power of the board of directors to bind the society, or authorise others to do so, shall not be limited by reason of anything included in the society’s constitution, that is to say, its memorandum and rules.U.K.

(2)For this purpose—

(a)a person deals with a building society if he is a party to any transaction or other act to which the society is a party;

(b)a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors under the society’s constitution; and

(c)a person shall be presumed to have acted in good faith unless the contrary is proved.

(3)The references above to limitations on the directors’ powers under the society’s constitution include limitations deriving from a resolution of the society passed at a general meeting or special meeting or on a postal [F832or electronic] ballot, or from any agreement between the members of the society.

(4)Notwithstanding anything in paragraph 3(2) above, sub-paragraph (1) above applies in relation to members of the society, and to persons claiming on account of members or under the rules of the society, as it applies in relation to other persons.

(5)Sub-paragraph (1) above does not affect any right of a member of the society to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.

(6)Nor does that sub-paragraph affect any liability incurred by the directors, or any other person, by reason of the directors’ exceeding their powers.]

Textual Amendments

F831Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

F833[ No duty to enquire as to capacity of society etc.]U.K.

Textual Amendments

F833Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F83418(1)A party to a transaction with a building society is not bound to enquire as to whether it is permitted by the society’s constitution or as to any limitation on the powers of the board of directors to bind the society or authorise others to do so.U.K.

(2)Notwithstanding anything in paragraph 3(2) above, sub-paragraph (1) above applies in relation to members of the society as it applies in relation to other persons.]

Textual Amendments

F834Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

Powers of central officeU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part IIIU.K. Meetings, Resolutions and Postal Ballots

Modifications etc. (not altering text)

C162Sch. 2 Pt. III (paras. 20–36) excluded (temp.) by S.I. 1986/2168, art. 3(1)(2)

C163Sch. 2 Pt. III (paras. 20–36) modified by S.I. 1987/426, art. 4

Annual general meetingU.K.

20(1)Subject to sub-paragraph (2) below, every building society shall hold a meeting in the first four months of each financial year as its annual general meeting (in addition to any other meetings in that year) and shall specify the meeting as such in the notices calling it.U.K.

(2)Sub-paragraph (1) above does not require a building society to hold an annual general meeting in the calendar year in which it is incorporated.

(3)If default is made in holding a meeting in accordance with sub-paragraph (1) above, the [F835FCA] may—

(a)call, or direct the calling of, an annual general meeting in that financial year, and

(b)give such ancillary or consequential directions as it thinks expedient, including directions modifying or supplementing the operation of the rules of the society in relation to the calling, holding and conducting of the meeting.

(4)Notwithstanding anything in the rules of a building society, the business which may be dealt with at the annual general meeting shall include any resolution whether special or not.

(5)In any case where default is made—

(a)in holding an annual general meeting in accordance with sub-paragraph (1) above, or

(b)in complying with any directions of the [F835FCA] given under sub-paragraph (3) above,

the building society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F836[Special meeting on members’ requisition]U.K.

Textual Amendments

F836Sch. 2 Pt. III para. 20A and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 25, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(q)

[F83720A(1)On a members’ requisition, a building society shall—U.K.

(a)duly call a special meeting, and specify the meeting as such in the notice calling it; and

(b)if so required by the requisition, send to each member entitled to receive notice of the meeting a copy of a statement of not more than 500 words with respect to the matters to be dealt with at the meeting;

and where a meeting is so called no business shall be conducted at the meeting other than that stated in the notice calling it or (where applicable) that mentioned in sub-paragraph (8)(b) below.

[F838(1A)Where a copy of a statement is required to be sent to a member under sub-paragraph (1)(b)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (1B) are satisfied.

(1B)The requirements of this sub-paragraph are satisfied in the case of a statement if—

(a)the society and that member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)no later than one working day after the statement is first capable of being accessed on a web site that person is notified F839... of—

(i)the publication of the statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the statement may be accessed, and how it may be accessed; and

(d)a copy of the statement is published continuously on that web site throughout the period beginning (so far as practicable) at the same time as copies of the statement are sent to members in accordance with sub-paragraph (1)(b), and ending with the conclusion of the meeting.]

(2)A members’ requisition is a requisition of not less than the requisite number of members of the society; and that number is [F840500] or such lesser number as may be specified in the rules of the society.

(3)The requisition—

(a)must state the objects of the meeting, be signed by the requisitionists and be deposited at the society’s principal office; and

(b)may consist of several documents in like form each signed by one or more requisitionists and each after the first deposited within three months of the date on which the first was deposited.

(4)Where the requisition consists of several documents, the date of its deposit shall be taken to be the date on which the document signed by the requisitionist making up the requisite number is deposited at the society’s principal office.

(5)The rules of the society may require a requisitionist—

(a)to state his full name and address;

(b)to fulfil one or other of the following conditions, namely—

(i)to have been a shareholding member for a specified period and to hold, or to have held at any time during that period, shares in the society to such value (not greater than the prescribed amount) as is specified in the rules; and

(ii)to have been a borrowing member for a specified period and to owe to the society, or to have owed to the society at any time during that period, a mortgage debt of such amount (not greater than the prescribed amount) as is so specified; and

(c)to identify a share or mortgage account with the society which will evidence the fact that he fulfils one or other of those conditions;

and in this sub-paragraph “specified period” means such period (not more than two years) before the date of the requisition as is specified in the rules.

(6)No objection may be made by virtue of such rules to the requisition or, where the requisition consists of several documents, to any of those documents unless it is made within 14 days of the requisition or document being deposited at the society’s principal office.

(7)The rules of the society may also require a sum of money, not exceeding [F841£50] per requisitionist, to be deposited with the requisition; and, where any money is so deposited, it shall be forfeited to the society, or returned to the persons who deposited it, as provided by the rules.

(8)The rules shall not provide for any deposited money to be forfeited to the society except—

(a)where a quorum is not present within half an hour after the time appointed for the meeting; or

(b)where and to the extent that those eligible to vote at the meeting decide by ordinary resolution that the money should be applied to defray the whole or any part of the expenses of holding the meeting.

(9)If the rules of a building society so provide, sub-paragraph (1) above does not require the society—

(a)to call a special meeting if the only or main object of the meeting is to move a resolution in substantially the same terms as any resolution which has been defeated at a meeting or on a postal [F842or electronic] ballot during the period beginning with the third annual general meeting before the date on which the requisition is deposited at the society’s principal office; or

(b)to call a special meeting to be held during the period of four months beginning one month after the end of its financial year.

(10)Sub-paragraph (1)(b) above does not require the society to send copies of a statement to members entitled to receive notice of a meeting in any case where—

(a)publicity for the statement would be likely to diminish substantially the confidence in the society of investing members of the public; or

(b)the rights conferred by sub-paragraph (1)(b) above are being abused to seek needless publicity for defamatory matter or for frivolous or vexatious purposes;

and that provision shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of a statement which does not relate directly to the affairs of the society.

(11)Where sub-paragraph (1)(b) above requires copies of a statement to be sent to members entitled to receive notice of a meeting, the proceedings at the meeting are not invalidated by—

(a)the accidental omission to send a copy of the statement to a member entitled to receive one, or

(b)the non-receipt of such a copy by such a member.

[F843(11A)Where, in a case in which sub-paragraph (1A)(b) is relied on for compliance with a requirement of sub-paragraph (1)(b)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (1B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings at the meeting.]

(12)The [F844appropriate authority] shall hear and determine any dispute arising under sub-paragraph (10)(a) above, whether on the application of the society or of any other person who claims to be aggrieved.

(13)The [F845Treasury may], by order substitute—

(a)for the number specified in sub-paragraph (2) above; or

(b)for the sum specified in sub-paragraph (7) above,

such other number or sum as appears to [F846them] to be appropriate; and an order under this subsection may make such supplementary, transitional and saving provision as appears to the [F847Treasury] to be necessary or expedient.

(14)The power to make an order under sub-paragraph (13) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

Textual Amendments

F837Sch. 2 Pt. III para. 20A and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 25, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(q)

F839Words in Sch. 2 para. 20A(1B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(2)

F840Figure in Sch. 2 para. 20A substituted (1.12.1999) by S.I. 1999/3031, art. 2

F845Words in Sch. 2 para. 20A(13) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(k)(i) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F846Word in Sch. 2 para. 20A(13) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(k)(ii) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F847Word in Sch. 2 para. 20A(13) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(k)(iii) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C164Sch. 2 para. 20A(13): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617 arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

F848[Failure to comply with members’ requisition]U.K.

Textual Amendments

F848Sch. 2 Pt. III para. 20B and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 26, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(r)

F849[20B(1)This paragraph applies where a members’ requisition is deposited at a building society’s principal office and the society is not relieved of the obligation to call a special meeting by paragraph 20A(9)(a) above.U.K.

(2)Subject to sub-paragraph (5) below, if the society does not within 28 days from the date of the deposit of the requisition duly call a meeting to be held within 63 days from that date—

(a)the requisitionists, or any proportion of them exceeding one half, may themselves call a meeting to be held within five months from that date; and

(b)no business shall be conducted at a meeting so called other than that stated in the notice calling it or (where applicable) that mentioned in paragraph 20A(8)(b) above.

(3)A meeting called under sub-paragraph (2) above by requisitionists shall be called in the same manner, as nearly as may be, as that in which meetings are to be called by the society.

(4)If—

(a)paragraph 20A(1)(b) above requires the society to send to each member entitled to receive notice of the meeting a copy of a statement of not more than 500 words with respect to the matters to be dealt with at the meeting; and

(b)subject to sub-paragraph (5) below, that requirement is not complied with within 28 days from the date of the deposit of the requisition,

the requisitionists, or any proportion of them exceeding one half, may themselves send a copy of the statement to each such member.

(5)If the rules of the society make such provision as is mentioned in paragraph 20A(9)(b) above, any days falling within the period there mentioned shall be disregarded in determining any period for the purposes of sub-paragraph (2) or (4)(b) above.

(6)Any reasonable expenses incurred by the requisitionists by reason of the failure of the society to call a meeting, or to comply with such a requirement as is mentioned in sub-paragraph (4) above, shall be repaid to the requisitionists by the society.

(7)Any sum so repaid shall be recoverable by the society from such of the directors of the society as were responsible for the failure (whether by the retention of fees or other remuneration in respect of services or otherwise).]

Textual Amendments

F849Sch. 2 Pt. III para. 20B and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 26, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(r)

Length of notice for calling meetingsU.K.

21(1)Any provision contained in the rules of a building society shall be void to the extent that it provides for the calling of a meeting of the society (other than an adjourned meeting) by less than 21 days’ notice expiring with the date of the meeting or, if earlier, the date specified by the society, under its rules, as the final date for the receipt of [F850appointments of] proxies to vote at the meeting.U.K.

(2)A meeting of a building society may be called by 21 days’ notice, unless the rules provide for longer notice of the meeting to be given.

(3)Where notice of a meeting is given in accordance with sub-paragraph (2) above, the notice shall be taken for the purposes of this Act or any other enactment to have been duly given according to the rules of the building society.

Textual Amendments

Persons entitled to notice of meetingsU.K.

22(1)Subject to the provisions of this Part of this Schedule, notice of a meeting of a building society shall be given to every member of the society who would be eligible to vote at the meeting if the meeting were held on the date of the notice.U.K.

F851[(2)Notice of the meeting shall, subject to those provisions, be given also to every person—

(a)who becomes a shareholding or borrowing member of the society after the date of the notice under sub-paragraph (1) above and before the specified date; or

(b)who, being such a member at the date of that notice, attains the age of 18 after that date and on or before the date of the meeting,

and who would (in either case) be eligible to vote at the meeting if he remained such a member until the date of the meeting.

(2A)In sub-paragraph (2) above “the specified date” means the date specified by the society as the final date for the receipt of [F852appointments of] proxies to vote at the meeting.]

(3)Accidental omission to give notice of a meeting to, or non-receipt of notice of a meeting by, any person entitled to receive notice of the meeting does not invalidate the proceedings at that meeting.

Textual Amendments

F851Sch. 2 Pt. III para. 22(2)(2A) substituted for Sch. 2 Pt. III para. 22(2) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(2); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

Modifications etc. (not altering text)

C165Sch. 2 Pt. III paras. 22, 34 excluded by S.I. 1987/426, art. 3

[F853Transmission of notice of meeting to an electronic addressU.K.

Textual Amendments

F853Sch. 2 paras. 22A, 22B and cross-headings inserted (20.3.2003) by The Building Societies Act 1986 (Electronic Communications) Order 2003 (S.I. 2003/404), arts. 1(1), 14

22A(1)Where a notice of a meeting of a society is required to be sent to a person under any provision of this Act, the notice may be sent to him electronically only if it is sent to an electronic address notified by him to the society for the purpose.U.K.

(2)In a case in which this paragraph is relied on for compliance with a requirement to send a notice, a notice given in accordance with this paragraph is to be treated as given to a person on the day that the notice is transmitted.

Publication of notice of meeting on a web siteU.K.

22B(1)A requirement under any provision of this Act to send a notice of a meeting of the society to a person shall also be treated as satisfied if the conditions set out in sub-paragraph (2) are satisfied.U.K.

(2)The conditions of this sub-paragraph are satisfied in the case of a notice of a meeting of a society if—

(a)the society and the person have agreed that notices which are required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the notice in question

(c)that person is notified F854... of—

(i)the publication of the notice on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the notice may be accessed, and how it may be accessed; and

(d)the notice is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the conclusion of the meeting.

(3)A notification given for the purposes of sub-paragraph (2)(c) must—

(a)state that it concerns a notice of a meeting of the society served in accordance with this Act;

(b)specify the place, date and time of the meeting; and

(c)state whether the meeting is to be an annual or special general meeting.

(4)In a case in which this paragraph is relied on for compliance with a requirement to send a notice, a notice given in accordance with this paragraph is to be treated as given to a person on the day that person is notified in compliance with sub-paragraphs (2)(c) and (3).

(5)Where, in a case in which this paragraph is relied on for compliance with a requirement to send a notice of a meeting—

(a)a notice is published for a part, but not all, of the period mentioned in sub-paragraph (2)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings of the meeting.]

Textual Amendments

F854Words in Sch. 2 para. 22B(2)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(3)

Members’ entitlement to vote on resolutionsU.K.

23[F855(1)A member of a building society is entitled to vote—U.K.

(a)on an ordinary resolution or a special resolution if he was, at the end of the last financial year before the voting date, and is, on that date, a shareholding or borrowing member of the society;

(b)on a shareholding members’ resolution, if he was, at the end of that year, and is, on that date, a shareholding member of the society; and

(c)on a borrowing members’ resolution if he was, at the end of that year, and is, on that date, a borrowing member of the society,

but subject, in either case, to paragraphs 5(3), 7(4) and 8(4) above [F856and sub-paragraph (5A) below] and, in the case of paragraphs (a) and (b), to sub-paragraph (3) below.]

(2)Subject to the following provisions of this paragraph, any provision in the rules of a building society is void to the extent that it would have the effect of restricting the rights conferred on members by sub-paragraph (1) above.

F857[(3)If the rules of the society so provide, a shareholding member is not entitled to vote on an ordinary resolution or a special resolution as such a member, or to vote on a shareholding members’ resolution—

(a)if he did not have a qualifying shareholding at the qualifying shareholding date; or

(b)if he ceased to hold shares at some time between that date and the voting date.

(4)Where a building society’s rules make such provision as is mentioned in sub-paragraph (3)(a) above, a shareholding member shall be taken to have had a qualifying shareholding at the qualifying shareholding date if he had such a holding—

(a)at the end of the last financial year before the voting date, except where paragraph (b) below applies; or

(b)in a case where the voting date falls during that part of a financial year which follows the conclusion of the annual general meeting commenced in that year, at the beginning of the period of 56 days immediately preceding the voting date for members voting in person at a meeting or, as the case may be, on a postal [F858or electronic] ballot.]

(5)For the purposes of this paragraph a member of a building society has a “qualifying shareholding” at any time if at that time he holds shares in the society to a value not less than the prescribed amount or such lesser amount as may be specified in the rules.

[F859(5A)If the rules of the society so provide, a member who is also an employee of the building society shall not be entitled to exercise, directly or indirectly, any voting rights that the member may have with respect to a relevant resolution.

(5B)For the purposes of sub-paragraph (5a), a relevant resolution is a resolution to approve an increase in the maximum ratio between the fixed and variable components of remuneration as permitted by Article 94(1)(g)(i) of the capital requirements directive (whereby the level of the variable component may be set at up to 200% of the level of the fixed component), where the member referred to would be directly affected by the increase.

(5C)In sub-paragraph (5B) the “capital requirements directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.]

(6)In this paragraph “voting date”, with reference to any resolution, means—

(a)the date of the meeting at which the resolution is intended to be moved, except where paragraph (b) or (c) below applies;

(b)where voting on the resolution is to be conducted by postal ballot [F860or by electronic ballot in the case of which not all the voting is electronic (within the meaning of paragraph 33A of Schedule 2)], the date which the society specifies as the final date for the receipt of completed ballot papers;

[F861(bb)in the case of an election conducted by electronic ballot in which all the voting is electronic voting (within the meaning of that paragraph), the date which the society [F862specifies] as the final date for registering votes;]

(c)in the case of a member appointing a proxy to vote instead of him at a meeting, the date which the society specifies as the final date for the receipt of [F863appointments of] proxies to vote on that resolution.

Textual Amendments

F855Sch. 2 Pt. III para. 23(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F857Sch. 2 Pt. III para. 23(3)(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(4); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

ProxiesU.K.

24(1)A member of a building society who is entitled to attend and vote at a meeting of the society—U.K.

(a)may appoint another person (whether a member of the society or not) as his proxy, to attend and, subject to sub-paragraph (3) below, to vote at the meeting instead of him, and

(b)may direct the proxy how to vote at the meeting.

[F864(1A)A form for the appointment of a proxy—

(a)may be sent electronically to a member if it is sent to an electronic address notified by that member to the society for the purpose;

(b)is to be treated as having been sent electronically to a member, where the conditions in sub-paragraph (1B) below are satisfied.

(1B)The conditions are that—

(a)the society and the member have agreed that a form may instead be accessed by the member on a website;

(b)F865... the member is notified of—

(i)the publication of the form on a website;

(ii)the address of that website; and

(iii)the place on that website where the form may be accessed, and how it may be accessed; and

(c)the form is published on the website throughout the period beginning with the day on which the member is notified in accordance with paragraph (b) above and ending with the last day specified for the return of appointments of proxies.

(1C)If the form is absent from the website for part of the period referred to in sub-paragraph (1B)(c), the absence is to be disregarded if it is wholly attributable to circumstances that it would not be reasonable to have expected the society to prevent or avoid.

(1D)Where a form for the appointment of a proxy is made available by a society on a website in accordance with subsection (1A)(b), the society may also make available on the website a facility for completing the form and returning the appointment in an electronic communication (but see paragraph 34).]

(2)Where the society, under its rules, specifies a final date for the receipt of [F866appointments of] proxies to vote at a meeting, a person appointed a proxy by a member who at that date is entitled to attend and vote at the meeting may act as his proxy at the meeting whether or not the member ceases to be so entitled after that date.

(3)A proxy is entitled to vote on a poll but, subject to any provision in the rules of the building society, not otherwise.

(4)In every notice calling a meeting of a building society there shall appear with reasonable prominence a statement—

(a)that a member entitled to attend and vote may appoint a proxy (or, where it is allowed, one or more proxies) to attend and vote at the meeting instead of him;

(b)that the proxy need not be a member of the society; and

(c)that the member may direct the proxy how to vote at the meeting.

[F867(4A)Every form for the appointment of a proxy sent by a building society to persons entitled to notice of a meeting of the society must contain provision enabling that person to direct the proxy how to vote at the meeting.]

(5)If default is made in complying with sub-paragraph (4) above in respect of a meeting of a building society, [F868or in complying with sub-paragraph (4A) above in respect of a form of appointment of a proxy,] the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale, and so shall any officer who is also guilty of the offence.

(6)Any provision contained in the rules of a building society shall be void in so far as it would have the effect of requiring [F869the appointment of a proxy, or any] document necessary to show the validity of, or otherwise relating to, the appointment of a proxy, to be received by the society or any other person more than seven days before a meeting or adjourned meeting in order that the appointment may be effective at the meeting or adjourned meeting.

Textual Amendments

F864Sch. 2 para. 24(1A)-(1D) substituted for Sch. 2 para. 24(1A)(1B) (12.4.2011) by The Mutual Societies (Electronic Communications) Order 2011 (S.I. 2011/593), arts. 1(1), 2(1)

F865Words in Sch. 2 para. 24(1B)(b) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(4)

F867Sch. 2 Pt. III para. 24(4A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(5); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F868Words in Sch. 2 Pt. III para. 24(5) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(6); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

Right to demand a pollU.K.

25(1)Any provision contained in the rules of a building society shall be void in so far as it would have the effect either—U.K.

(a)of excluding the right to demand a poll at a meeting of the society on any question other than the election of a chairman of the meeting or the adjournment of the meeting, or

(b)of making ineffective a demand for a poll on any such question which is made by not less than ten members having the right to vote at the meeting.

(2)[F870Any appointment of] a proxy to vote at a meeting of a building society shall be taken also to confer authority to demand or join in demanding a poll; and for the purposes of sub-paragraph (1) above a demand by a person as proxy of a member shall be the same as the demand by the member.

Textual Amendments

Special resolutionsU.K.

26U.K.No resolution of a building society shall be passed as a special resolution[F871, or as a shareholding members’ resolution,] unless it is required to be so passed by or under any provision of this Act or by the rules of the society.

Textual Amendments

F871Words in Sch. 2 Pt. III para. 26 inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(7); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

27(1)A resolution of a building society shall be a special resolution when it has been passed by not less than three-quarters of the number of the members of the society qualified to vote on a special resolution and voting either—U.K.

(a)in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a special resolution has been duly given; or

(b)in a postal [F872or electronic] ballot on the resolution of which notice specifying that the resolution will not be effective unless it is passed as a special resolution has been duly given.

(2)In any rules made by a building society on or after 1st October 1960, whether before or after the commencement of this Act, “special resolution”, unless the context otherwise requires, means a special resolution as defined in this paragraph.

Textual Amendments

[F87327AU.K.A resolution of a building society shall be a shareholding members’ resolution when it has been passed by not less than three-quarters of the number of the shareholding members of the society—

(a)qualified to vote on a shareholding members’ resolution; and

(b)voting in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a shareholding members’ resolution has been duly given.]

Textual Amendments

F873Sch. 2 Pt. III para. 27A inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(8); S.I. 1997/2668, art. 2, Sch. Pt. II((w)(z)(xxxiv)

Borrowing members’ resolutionsU.K.

28U.K.No resolution of a building society shall be passed as a borrowing members’ resolution unless it is required to be so passed by or under any provision of this Act or by the rules of the society.

29[F874(1)A resolution of a building society shall be a borrowing members’ resolution when it has been passed by a majority of the borrowing members of the society voting in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a borrowing members’ resolution has been duly given.]U.K.

F875[(2)For the purposes of this Part of this Schedule, an individual who is indebted to a building society in respect of a loan fully secured on land is not a borrowing member of the society at any time if at that time the amount of his mortgage debt is less than the prescribed amount.]

(3)Where a borrowing member’s resolution approving a transfer of engagements by a building society is moved, only those borrowing members whose mortgages are to be transferred shall be entitled to vote on the resolution.

(4)In any rules made by a building society after the commencement of this paragraph, “borrowing members’ resolution”, unless the context otherwise requires, means a borrowing members’ resolution as defined in this paragraph.

Textual Amendments

F874Sch. 2 Pt. III para. 29(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(9); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F875Sch. 2 Pt. III para. 29(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(4), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)

Transfer resolutionsU.K.

30(1)The transfer resolutions required for the purposes of section 97 for the approval by members of a building society of a transfer of its business are two resolutions, of which—U.K.

(a)one is passed as a borrowing members’ resolution, and

(b)the other (“the requisite shareholders’ resolution”) is passed in accordance with sub-paragraphs (2) to (5) below.

(2)In a case where the successor is to be a specially formed company, the requisite shareholders’ resolution—

(a)must be passed as a [F876shareholding members’ resolution], and

(b)must be passed on a poll on which not less than [F87750] per cent. of the members of the society qualified to vote on a [F876shareholding members’ resolution] voted;

and the notice of the resolution required by [F878paragraph 27A above] must specify that the resolution will not be effective unless both of the requirements specified in this sub-paragraph are fulfilled.

(3)Subject to any direction under sub-paragraph (5) below, in a case where the successor is to be an existing company, the requisite shareholders’ resolution must be passed as a [F879shareholding members’ resolution] and either—

(a)must be passed by not less than 50 per cent. of the members qualified to vote on a [F879shareholding members’ resolution], or

(b)must be passed by the holders, being members qualified to vote on a [F879shareholding members’ resolution], of shares in the society to a value, on the voting date, representing not less than 90 per cent. of the total value of the shares held on that date by the members so qualified to vote;

and, in either case, the resolution must be a resolution in relation to which the notice required by [F880paragraph 27A] above includes a statement specifying that the resolution will not be effective unless either of the above requirements is fulfilled [F881has been duly given].

(4)If the [F882appropriate authority] considers it expedient, in relation to a transfer of the business of a building society to an existing company, to do so for the purpose of protecting the investments of the shareholders of or depositors with the society, the [F883it] may give a direction under sub-paragraph (5) below.

[F884(4A)If the appropriate authority is the PRA, it must consult the FCA before giving a direction under sub-paragraph (5).]

(5)A direction under this sub-paragraph is a direction that, for the purposes of the transfer of business specified in the direction, the requisite shareholders’ resolution is to be effective if it is passed as a [F885shareholding members’ resolution].

(6)The Treasury F886. . . may by order amend sub-paragraph (2)(b), (3)(a) or (3)(b) above so as to substitute for the percentage for the time being specified in the subparagraph such other percentage as [F887they think] appropriate.

(7)The power to make orders under sub-paragraph (6) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8)In this paragraph “voting date”, with reference to a requisite shareholders’ resolution, has the same meaning as in paragraph 23(6) above.

Textual Amendments

F876Words in Sch. 2 Pt. III para. 30(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(10)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F877Words in Sch. 2 para. 30(2)(b) substituted (5.12.1997) by S.I. 1997/2714, art. 2

F878Words in Sch. 2 Pt. III para. 30(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(10)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F879Words in Sch. 2 Pt. III para. 30(3) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(11)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F880Words in Sch. 2 Pt. III para. 30(3) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(11)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F881Words in Sch. 2 Pt. III para. 30(3) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(3), 47(3), Sch. 7 para. 57(11)(c), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxiv)(cc)(xviii)

F883Words in Sch. 2 para. 30(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(l)(i)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F885Words in Sch. 2 Pt. III para. 30(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(12); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F886Words in Sch. 2 para. 30(6) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F887Words in Sch. 2 para. 30(6) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(m)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C166Sch. 2 para. 30: power to modify conferred (16.1.2009) by Building Societies (Funding) and Mutual Societies (Transfers) Act 2007 (c. 26), ss. 3, 6(2); S.I. 2009/36, art. 2

C167Sch. 2 para. 30 applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

Members’ right to propose and circulate resolutionsU.K.

31(1)If at least the requisite number of qualified members of a building society give notice to the society of their intention to have moved on their behalf a resolution, other than [F888a shareholding members’ resolution or] a borrowing members’ resolution, specified in the notice at an annual general meeting of the society, it shall be the duty of the society, subject to sub-paragraphs (4), (5) and (6) below—U.K.

(a)to include in the notice of the annual general meeting a notice specifying the intention to have the resolution moved on their behalf at the meeting and, where applicable, the intention to move it as a special resolution;

(b)at the request of the members intending to have the resolution moved on their behalf, to send to each member entitled to receive notice of the meeting a copy of any statement of not more than [F889500 words] with respect to the matter referred to in the resolution.

(2)For the purposes of sub-paragraph (1) above—

(a)“the requisite number”—

F890[(i)in the case of a society in relation to which the difference between the total assets of the society as shown in the accounts last prepared by it under [F891section 72A or 72E] immediately before the date on which the members gave notice to the society under sub-paragraph (1) above and the aggregate of—

(aa)the liquid assets of the society as shown in those accounts in pursuance of regulations [F892under section 72C or 72G or in accordance with international accounting standards, as appropriate]; and

(bb)the fixed assets of the society as so shown,

exceeds £100 million, is [F893five hundred] or such lesser number as is specified for the purpose in the rules of the society, and]

(ii)in the case of any other society is [F894one hundred] or such lesser number as is specified for the purpose in the rules of the society;

(b)every member of a building society is a “qualified member” unless the rules make other provision for the purpose which is not rendered void under sub-paragraph (3) below.

(3)Any provision contained in the rules of a building society shall be void to the extent that it would have the effect of requiring a qualified member, for the purposes of sub-paragraph (1) above,—

F895[(a)to have been a member for more than two years ending with the qualifying date; or

(b)if he claims eligibility as a shareholding member, to hold, or to have held at any time, shares in the society to a value greater than the prescribed amount in force on the qualifying date; or

(c)if he claims eligibility as a borrowing member, to owe to the society, or to have owed to the society at any time, a mortgage debt of an amount greater than the prescribed amount in force on the qualifying date;]

and for the purposes of this sub-paragraph the qualifying date is the date on which the notice is given to the society under sub-paragraph (1) above.

(4)Sub-paragraph (1) above does not require a building society to send notices of a resolution or copies of a statement to members of the society in any case where—

(a)publicity for the resolution or, as the case may be, the statement would be likely to diminish substantially the confidence in the society of investing members of the public; or

(b)the rights conferred by sub-paragraph (1) are being abused to seek needless publicity for defamatory matter or for frivolous or vexatious purposes;

and that sub-paragraph shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of a resolution or statement which does not relate directly to the affairs of the society.

(5)If the rules of a building society so provide, sub-paragraph (1) above does not require notice of a resolution to be given to members of the society if the resolution is in substantially the same terms as any resolution which has been defeated at a meeting or on a postal [F896or electronic] ballot during the period beginning with the third annual general meeting before the date on which notice of the resolution is given to the society.

(6)No copies of a statement with respect to a resolution shall be sent to members of a building society if, on any of the grounds in sub-paragraph (4) or (5) above, the society does not give the notice of the resolution to them required by sub-paragraph (1)(a) above.

(7)The [F897PRA] shall hear and determine any dispute arising under sub-paragraph (4)(a) above, whether on the application of the building society or of any other person who claims to be aggrieved.

(8)If a building society fails to comply with the requirements of sub-paragraph (1) above where notice is duly given under that sub-paragraph, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

[F898(9)For the purposes of this paragraph “liquid assets” and “fixed assets”, in the case of societies which produce IAS individual accounts or IAS group accounts, have the same meaning as given in section 6(16).]

Textual Amendments

F888Words in Sch. 2 Pt. III para. 31(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(13)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F889Words in Sch. 2 Pt. III para. 31(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(13)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F890Sch. 2 Pt. III para. 31(2)(a)(i) substituted (1.1.1998) by S.I. 1997/2840, art. 2(2) (with transitional provisions in art. 3)

F891Words in Sch. 2 para. 31(2)(a)(i) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 8(a)

F892Words in Sch. 2 para. 31(2)(a)(i) (aa) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 8(b)

F893Words in Sch. 2 para. 31(2)(a)(i) substituted (1.12.1999) by S.I. 1999/3033, art. 2

F894Words in Sch. 2 para 31(2)(a)(ii) substituted (1.12.1999) by S.I. 1999/3033 art. 2

F895Sch. 2 Pt. III para. 31(3)(a)-(c) substituted for Sch. 2 para. 31(3)(a)(b) (1.1.1998) by S.I. 1997/2840, art. 2(3) (with transitional provisions in art. 3)

F898Sch. 2 para. 31(9) inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 8(c)

Members’ resolutions: supplementary provisionsU.K.

32(1)Notice of a resolution given under paragraph 31(1) above must be given to the building society not later than the last day of the financial year preceding the financial year in which is held the annual general meeting at which it is intended to move the resolution; and any statement to be sent to members under paragraph 31 (1)(b) above must also be notified to the society not later than that day.U.K.

(2)The notices of a resolution and the copies of a statement required to be sent to members by paragraph 31(1)(a) or (b) above shall be sent to them in the same manner and (so far as practicable) at the same time as the notice of the annual general meeting at which the resolution is intended to be moved; and, where it is not practicable for them to be sent at the same time as the notice, they shall be sent as soon as practicable thereafter.

[F899(2A)Sub-paragraph (2B) applies where, in a case in which a society gives notice in accordance with paragraph 22A or 22B of this Schedule of the annual general meeting at which a resolution is intended to be moved, the notice of the resolution and the copy of a statement in respect of the resolution that are required to be sent to a member under paragraph 3 1 (1)(a) or (b) are not transmitted or published at the same time as the notice.

(2B)The requirement of sub-paragraph (2) to send a member his notice of the resolution and his copy of a statement in the same manner as the notice of the annual general meeting is satisfied if—

(a)a notice of the resolution and a copy of the statement are made available to the member in the same way as the notice; or

(b)such a notice and such a copy (without being made available to the member in that way) are sent to the member in a manner set out by the society for the purpose in the notice.

(2C)Where a notice of a resolution and copy of a statement are sent to a member electronically under sub-paragraph (2B), they must be sent to an electronic address notified by the member for the purpose.

(2D)The requirements of sub-paragraph (2) or (2B)(a) are satisfied by the publication of a notice of the resolution and a copy of the statement on a web site only if—

(a)the notice of the annual general meeting at which the resolution is intended to be moved is a notice given to that member by being published on a web site;

(b)an agreement between the society and the member to his accessing information on a web site applies to the notice of a resolution and copy of a statement for the meeting in question;

(c)the member is notified F900... of—

(i)the publication of the notice of a resolution and copy of a statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the notice and copy may be accessed, and how they may be accessed;

(d)the notification for the purposes of paragraph (c) is given no later than the day after the date on which the notice of a resolution and the copy of a statement are first capable of being accessed on the notified web site;

(e)that date was the same as the date on which the notice of the annual general meeting was first capable of being accessed on a web site or (in a case to which sub-paragraph (2B)(a) applies) was as soon as practicable after that date;

(f)the notice of a resolution and copy of a statement are continuously published on the notified web site for a period beginning (so far as practicable) at the same time as the notices and statements are sent to members in accordance with sub-paragraph (2), and ending with the conclusion of the annual general meeting at which the resolution is moved.]

(3)Where notices of a resolution, or copies of a statement in respect of a resolution, intended to be moved at a meeting of a building society are required to be sent to any persons, the proceedings at the meeting are not invalidated by—

(a)the accidental omission to send a notice or copy to a person entitled to receive one, or

(b)the non-receipt of a notice or copy by such a person.

[F901(3A)Where, in a case in which sub-paragraph (2D) is relied on for compliance with a requirement of sub-paragraph (2) or (2B)(a)—

(a)a notice or copy [F902is] published for a part, but not all, of the period mentioned in subparagraph (2D)(f), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings at the meeting.]

(4)The [F903Treasury] may by order vary—

(a)the definition of “requisite number” or “qualified member” in sub-paragraph (2) of paragraph 31 above, or

(b)the descriptions of provisions which are rendered void by sub-paragraph (3) of that paragraph.

whether by the addition of any description or other provision or by the substitution or deletion of any definition, description or other provision for the time being specified or contained in that paragraph.

(5)An order under sub-paragraph (4) above shall be made by statutory instrument subject to annulment in pursu" ance of a resolution of either House of Parliament.

(6)An order under sub-paragraph (4) above may contain transitional, consequential or supplementary provision.

Textual Amendments

F900Words in Sch. 2 para. 32(2D)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(5)

F903Words in Sch. 2 para. 32(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(o) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C168Sch. 2 paras. 32(4)(6): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

Postal ballotsU.K.

33(1)The rules of a building society may provide for the voting in an election of directors or on any resolution of the society [F904(other than a shareholding members’ resolution or a borrowing members’ resolution)] to be conducted in all, or in any particular, circumstances by postal ballot; F905...U.K.

[F906(1A)Rules made pursuant to sub-paragraph (1) may also make provision in relation to the use of electronic communications in the conduct of a postal ballot.]

(2)Where, under the rules of a society, a postal ballot is to take place, the following provisions of this paragraph have effect.

(3)Notice of a postal ballot shall be given not less than 21 nor more than 56 days before the date which the society specifies as the final date for the receipt of completed ballot papers (referred to in this paragraph as “the voting day”).

(4)Subject to the provisions of this Part of this Schedule, notice of a postal ballot shall be given to every member of the society who would be entitled to vote in the election or on the resolution if the voting date for the election or the resolution fell on the date of the notice.

[F907(5)Notice of the postal ballot shall, subject to those provisions, be given also to every person—

(a)who becomes a shareholding or borrowing member of the society after the date of the notice under sub-paragraph (4) above and before the voting day; or

(b)who, being such a member at the date of that notice, attains the age of 18 after that date and on or before the voting day,

and who would (in either case) be eligible to vote in the election or on the resolution if he remained such a member until that day.

[F908(5A)Where a notice of a postal ballot is required to be given to a person by sub-paragraph (4) or (5), the notice may be sent to him electronically only if it is sent to an electronic address notified by the person to the society for the purpose.

(5B)In a case in which notice of a postal ballot is sent electronically to an electronic address in accordance with sub-paragraph (5A), the notice is to be treated as given to a person on the day on which it is transmitted.

(5C)A requirement of sub-paragraph (4) or (5) to send a notice of a postal ballot shall also be treated as satisfied if—

(a)the society and the person have agreed that notices which are required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the notice in question

(c)that person is notified F909... of—

(i)the publication of the notice on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the notice may be accessed, and how it may be accessed; and

(d)the notice is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the voting date (within the meaning of section 60(17)).

(5D)In a case in which sub-paragraph (5B) is relied on for compliance with a requirement of sub-paragraph (4) or (5), a notice of a postal ballot is to be treated as sent to a person on the day when notification is given in accordance with sub-paragraph (5C)(d).

(5E)Where, in a case in which sub-paragraph (5C) is relied on for compliance with a requirement of sub-paragraph (4) or (5)—

(a)a notice of a postal ballot is published for a part, but not all, of the period mentioned in sub-paragraph (5C)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the postal ballot.]

(6)Notice of a postal ballot—

(a)shall contain such other notices relating to the election or resolution [F910(“related notices”)], and

(b)shall be accompanied by such other documents [F911(“accompanying documents”)],

as would be required to be given or sent to a member in connection with notice of a meeting, had it been intended to hold the election or vote on the resolution at a meeting instead of by postal ballot with the exception, however, of any notice relating to voting by proxy at a meeting.

[F912(6A)Where the notice of a postal ballot is required by sub-paragraph (6) to contain a related notice or to be accompanied by an accompanying document—

(a)in a case where the notice of that ballot is given to a person electronically in accordance with sub-paragraph (5A), the related notice or accompanying document may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice of the postal ballot;

(b)in a case where notice of that ballot is given on a web site in accordance with subparagraph (5C), the requirement to send the related notice or accompanying document to that person shall also be treated as satisfied if the conditions set out in sub-paragraph (6B) are satisfied.

(6B)The conditions of this sub-paragraph are satisfied in the case of a related notice or accompanying document if—

(a)the society and that member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the related notice or accompanying document in question;

(c)at the same time and in the same manner as the society notifies that person of the publication of the notice of the postal ballot, it notifies him of—

(i)the publication of the related notice or accompanying document on a web site,

(ii)the address of that web site,

(iii)the place on that web site where that statement or notification may be accessed, and how it may be accessed; and

(d)the related notice or accompanying document is published continuously on that web site throughout the period beginning with the giving of that notification in accordance with paragraph (c) and ending with the voting date (within the meaning of section 60(17)).

(6C)Where notice of a postal ballot and any related notice or accompanying document is sent to a person electronically, that person may return the completed voting paper to the society either—

(a)by post; or

(b)electronically by sending it to an electronic address notified by the society to that person for the purpose,

unless the rules of the society make provision to the contrary.]

(7)Accidental omission—

(a)to give notice of a postal ballot, or

(b)to send any document required by sub-paragraph (6) above to accompany such a notice,

to any person entitled to receive it, or non-receipt of such a notice or document by such a person, does not invalidate the postal ballot.

[F913(7A)Where, in a case in which sub-paragraph (6A)(b) is relied on for compliance with a requirement of sub-paragraph (6)—

(a)a related notice or accompanying document is published for a part, but not all, of the period mentioned in sub-paragraph (6B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the postal ballot.]]

Textual Amendments

F904Words in Sch. 2 Pt. III para. 33(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(14); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F907Sch. 2 Pt. III para. 33(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(15); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F909Words in Sch. 2 para. 33(5C)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(3)

[F914Electronic ballotsU.K.

Textual Amendments

33A.(1)Where—U.K.

(a)the rules of a building society provide for a postal ballot to be conducted in any circumstances in the case of an election or resolution, and

(b)those rules do not expressly prohibit the conduct of an electronic ballot in those circumstances,

the ballot in the case of that election or resolution may, in those circumstances, be an electronic ballot instead of a postal ballot.

(2)A ballot in the case of an election or resolution is an electronic ballot if it is conducted—

(a)in accordance with the following provisions of this paragraph as to electronic voting; and

(b)in so far as it is not conducted with those provisions, as if it were a postal ballot.

(3)But voting in the case of an election or resolution may not be conducted by an electronic ballot in which all the voting is electronic voting in accordance with sub-paragraphs (8) to (10) unless the rules of the society expressly permit it.

(4)The rules of a building society may provide for voting in the case of—

(a)an election of directors, or

(b)a resolution of the society other than a share holding members' resolution or a borrowing members' resolution,

to be conducted by an electronic ballot in which all the voting is electronic voting in accordance with sub-paragraphs (8) to (10).

(5)Where voting may be conducted by electronic ballot by virtue of sub-paragraph (1) the rules of the society may contain provision supplementing rules relating to postal ballots in so far as it is necessary to provide for the conduct of electronic voting in accordance with subparagraphs (8) to (10).

(6)Where voting may be conducted by electronic ballot by virtue of sub-paragraph (1) or (3) the rules of the society may make provision as to the consequences of any irregularities occurring in the course of a ballot, including (but not restricted to) provision as to the validity of multiple votes cast by a member in the same election or on the same resolution.

(7)In the case of an electronic ballot, the society is not required to send notice of the ballot to any person if—

(a)that person has agreed, in accordance with sub-paragraph (9)(a) below, that notices of electronic ballots and a voting facility may be accessed by him on a web site; and

(b)the society notifies that person in accordance with sub-paragraph (9)(c) below.

(8)The voting of a person in an electronic ballot is electronic if—

(a)a person has access on a web site to the notice of the electronic ballot, any document which is required to accompany the notice and a facility for registering his vote;

(b)that person registers his vote by means of that facility; and

(c)the conditions set out in sub-paragraph (9) are satisfied.

(9)The conditions of this sub-paragraph are satisfied if—

(a)the society and the person have agreed that notices of electronic ballots, any document which is required to accompany the notice, and a voting facility may be accessed by him on a web site;

(b)that agreement applies to the electronic ballot and accompanying documents in question;

(c)that person is notified F915... of—

(i)the publication of the notice and documents and the availability of the voting facility on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the notice, any such documents, and the facility may be accessed, and how they may be accessed; and

(d)the notice and each such document continues to be published and the facility continues to be available on that web site throughout the period beginning with the giving of that notification and ending with the date which the society specifies as the final date for the registration of votes.

(10)A notice given for the purposes of sub-paragraph (9)(c) must—

(a)state that it concerns a notice of an electronic ballot given in accordance with this Act; and

(b)state whether the voting to be conducted by the electronic ballot is in an election or on a resolution or both.

(11)Nothing in sub-paragraph (9) shall invalidate an electronic ballot where—

(a)any notice or document that is required to be published, and any facility which is required to be made available, for the period mentioned in sub-paragraph (6)(d) is published or made available for a part, but not all, of that period, but

(b)the failure to publish that notice or document, or make that facility available, throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid.

(12)Sub-paragraphs (3) to (7) of paragraph 33 apply, with the modification specified in subparagraph (13) below, in relation to notices of an electronic ballot as they apply in relation to notices of a postal ballot.

(13)Sub-paragraph (3) of paragraph 33 has effect as if the reference to the receipt of completed ballot papers included a reference to the registration of votes by means of a voting facility on a web site.

(14)For the purposes of sub-paragraph (3) of paragraph 33 (as applied to electronic ballots by sub-paragraph (13) above), in a case in which a person is notified for the purposes of subparagraph (9)(c), a notice of an electronic ballot is treated as given to a person on the day when notification is given in accordance with that sub-paragraph.]

Textual Amendments

F915Words in Sch. 2 para. 33A(9)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(6)

Declarations to be made in proxy and ballot formsU.K.

34(1)If a member of a building society who purports to exercise his right—U.K.

(a)to appoint a proxy to vote instead of him at a meeting of the society, or

(b)to vote in a postal [F916or electronic] ballot, or

(c)to vote on a poll at a meeting of the society,

fails to make a declaration in accordance with sub-paragraph (2) below in the F917... appointment or, as the case may be, on the voting paper, the appointment made or, as the case may be, the vote cast by him is invalid.

[F918(2)A person making a declaration in pursuance of sub-paragraph (1) above shall—

(a)declare that he has attained the age of 18 years or will have attained that age on or before the voting date or, where he is voting by proxy, on or before the date of the meeting;

(b)where the vote is to be cast on a shareholding members’ resolution, declare—

(i)that on the voting date he is or, so far as he can reasonably foresee, will be a shareholder of the society; and

(ii)where the person is not entitled to vote unless he had a qualifying shareholding on the qualifying shareholding date, that he had or, so far as he can reasonably foresee, will have such a shareholding on that date;

(c)where the vote is to be cast on a borrowing members’ resolution, declare that on the voting date he is or, so far as he can reasonably foresee, will be a borrowing member of the society; and

(d)where the vote is to be cast on an ordinary or special resolution, declare either as mentioned in paragraph (b) above, or as mentioned in paragraph (c) above, or both.]

[F919(2A)Where an appointment of a proxy is [F920returned in an electronic communication in accordance with paragraph 24(1D)], the requirements of sub-paragraph (2) above are satisfied only if—

(a)the appointment incorporates the terms of the declaration required by that subparagraph; and

(b)the authenticity and integrity of the appointment is established (whether by an electronic signature or otherwise) in such manner as may have been agreed between the member and the society.

(2B)Where a member voting in a postal ballot returns a completed voting paper electronically as mentioned in sub-paragraph (6E)(b) of paragraph 33 above, the requirements of sub-paragraph (2) above are satisfied only if—

(a)the voting paper incorporates the terms of the declaration required by that subparagraph; and

(b)the authenticity and integrity of the completed paper is established (whether by electronic signature or otherwise) in such manner as may have been agreed between the member and the society.

(2C)Where a member registers a vote on a web site in accordance with sub-paragraph (8)(b) of paragraph 33A above, the requirements of sub-paragraph (2) above are satisfied only if—

(a)at the place on the web site where the voting facility is accessed, the member has confirmed the terms of the declaration specified by that sub-paragraph; and

(b)the authenticity and integrity of the member’s vote is established (whether by electronic signature or otherwise) in such a manner as may have been agreed between the member and the society.]

(3)A building society shall secure that every document issued by it for use as a voting paper [F921and every] appointment of a proxy incorporates a form of declaration under this paragraph for completion by the member using it.

[F922(3A)A building society shall ensure that—

(a)every voting paper sent by it to a member by means of an electronic communication incorporates a declaration in accordance with sub-paragraph (2) above, and

(b)every voting facility provided by it on a web site is accompanied by such a declaration,

for completion or confirmation by the member purporting to exercise his right to vote.]

(4)If a building society fails to comply with the requirements of sub-paragraph (3) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(5)In this paragraph—

Textual Amendments

F918Sch. 2 Pt. III para. 34(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(16); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

Modifications etc. (not altering text)

C169Sch. 2 Pt. III paras. 22, 34 excluded by S.I. 1987/426, art. 3

Advertising requirements in lieu of notice of meetings, etc.U.K.

35(1)The advertising requirements referred to in paragraph 14 above, in relation to notices of meetings or postal [F924or electronic] ballots of building societies, are as follows.U.K.

(2)Notice of the holding of the meeting or of the postal ballot must be given either—

(a)by displaying a notice in a prominent position in every branch office, or

(b)by advertisement in one or more newspapers circulating in the areas in which the members of the society reside,

according as the rules of the society provide.

(3)The notice must be given not later than 21 days before the date of the proposed meeting or, as the case may be, the final date for the receipt of completed ballot papers [F925or for the registration of votes in an electronic ballot (as the case may be)].

(4)The notice shall state where members may obtain copies of the resolutions and any statements with respect to the matter referred to in a resolution, forms relating to voting by proxy and, in the case of a postal ballot, the ballot papers[F926, or, in the case of an electronic ballot, how members may access electronic voting facilities].

Textual Amendments

The prescribed amountU.K.

36(1)For the purposes of this Part of this Schedule, the “prescribed amount” is £100 or such other amount as the [F927Treasury by order specify] for the time being.U.K.

(2)The power to make an order under sub-paragraph (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(3)An order under sub-paragraph (1) above may contain transitional, consequential or supplementary provision.

Textual Amendments

F927Words in Sch. 2 para. 36(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(p) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C170Sch. 2 para. 36(1)(3): functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

[F928SCHEDULE 2AU.K. Discharge of mortgages: supplementary provisions

Textual Amendments

F928Sch. 2A inserted (1.12.1997) by 1997 c. 32, s. 7(2), Sch. 2; S.I. 1997/2668, art. 2, Sch. Pt. I(a)

Main provisionsE+W+N.I.

1(1)When all money intended to be secured by a mortgage given to a building society has been fully paid or discharged, the society may endorse on or annex to the mortgage one or other of the following—E+W+N.I.

(a)a receipt in the prescribed form signed by any person acting under the authority of the board of directors;

(b)a reconveyance of the mortgaged property to the mortgagor;

(c)a reconveyance of the mortgaged property to such person of full age, and on such trusts (if any), as the mortgagor may direct.

(2)Where in pursuance of sub-paragraph (1) above a receipt is endorsed on or annexed to a mortgage, not being a [F929charge or incumbrance registered under the M32Land Registration Act 1925] [F929registered charge (within the meaning of the Land Registration Act 2002)], the receipt shall operate in accordance with section 115(1), (3), (6) and (8) of the M33Law of Property Act 1925 (discharge of mortgages by receipt) in the like manner as a receipt which fulfils all the requirements of subsection (1) of that section.

(3)Section 115(9) of the Law of Property Act 1925 shall not apply to a receipt in the prescribed form endorsed or annexed by a building society in pursuance of sub-paragraph (1) above; and in the application of that subsection to a receipt so endorsed or annexed which is not in that form, the receipt shall be taken to be executed in the manner required by the statute relating to the society if it is signed as mentioned in sub-paragraph (1)(a) above.

(4)[F930The foregoing sub-paragraphs shall, in the case of a mortgage of registered land, have effect without prejudice to the operation of the Land Registration Act 1925 or any rules in force under it.]

(5)In this paragraph—

(6)This paragraph does not extend to Scotland.

Textual Amendments

F929Words in Sch. 2A para. 1(2) substituted (E.W.) (13.10.2003) by Land Registration Act 2002 (c. 9), s. 136(2), Sch. 11 para. 19(2) (with s. 129); S.I. 2003/1725, art. 2(1)

F931Words in Sch. 2A para. 1(5) repealed (E.W.) (13.10.2003) by Land Registration Act 2002 (c. 9), s. 136(2), Sch. 11 para. 19(4), Sch. 13 (with s. 129, Sch. 12 para. 1); S.I. 2003/1725, art. 2(1)

Marginal Citations

Application of paragraph 1 to Northern IrelandU.K.

2(1)In its application to Northern Ireland, paragraph 1 above shall have effect with the following modifications.U.K.

(2)In sub-paragraph (1) after the words “on such trusts” there shall be inserted the words “ or uses ”.

(3)In sub-paragraph (2)—

(a)for the words from “charge” to “Property Act 1925” there shall be substituted the words “ charge on registered land, the receipt shall operate in accordance with Article 3(1), (7) and (9) of the M34Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983 ”; and

(b)for the words “subsection (1) of that section” there shall be substituted the words “ paragraph (1) of that Article ”.

(4)For sub-paragraphs (3) and (4) there shall be substituted the following sub-paragraphs—

“(3)If the mortgage is registered in accordance with the M35Registration of Deeds Act (Northern Ireland) 1970, the registrar under that Act shall—

(a)on production of the receipt mentioned in sub-paragraph (1) above make a note in the Abstract Book against the entry relating to the mortgage that the mortgage is satisfied; and

(b)grant a certificate, either on the mortgage or separately, that the mortgage is satisfied.

(4)The certificate granted under sub-paragraph (3)(b) above shall—

(a)be received in all courts and proceedings without further proof; and

(b)have the effect of clearing the register of the mortgage.”

(5)In sub-paragraph (5) for the definition of “registered land” there shall be substituted the following definition—

Marginal Citations

Power to prescribe form of documentsU.K.

3(1)The [F932Treasury] may make rules for prescribing anything authorised or required by paragraph 1 above to be prescribed; and in this Schedule “prescribed” means prescribed by rules made under this paragraph.U.K.

(2)The power to make rules under this paragraph shall be exercisable by statutory instrument.]

Textual Amendments

F932Words in Sch. 2A para. 3(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 201 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C171Sch. 2A para. 3(1): Functions of the Chief Registrar, Assistant Registrar for Scotland, Assistant Registrars and the Central Office transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. I; S.I. 2001/3538, art. 2

F933SCHEDULE 3U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F934SCHEDULE 4U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F936SCHEDULE 5U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F936Sch. 5 repealed (1.12.2001) by S.I. 2001/2617 arts. 2(b), 13(2), Sch. 4 (with art. 13(3) Sch. 5); S.I. 2001/3538, art. 2

F940SCHEDULE 6U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F940Sch. 6 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

Sch. 6 continued (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9, 11, 24 Sch. 1 Pt. 1; S.I. 2001/3538, art. 2

Section 32.

SCHEDULE 7U.K. Investors: Special Provisions

Members or depositors dyingU.K.

1(1)The provisions of this paragraph have effect where a member of, or depositor with, a building society dies, testate or intestate, domiciled in any part of the United Kingdom leaving a sum of money in the funds of the society not exceeding £5000.U.K.

(2)If a person claiming to be beneficially entitled to the sum of money under the will or the applicable law of intestacy furnishes to the society—

(a)satisfactory evidence of the death, and

(b)a statutory declaration that the member or depositor has died and that the person claiming the amount is beneficially entitled under the will or the applicable law of intestacy to receive it,

the society may, without probate of the will or the grant of letters of administration or confirmation, as the case may be, pay the sum of money to that person.

(3)Where a building society has paid a sum of money to any person in reliance on evidence of death and a statutory declaration furnished as mentioned in sub-paragraph (2) above, the payment shall be valid and effectual with respect to any demand against the funds of the society from any other person claiming to be entitled to it but without prejudice to that other person’s pursuing his remedy for the amount against the person who received it.

(4)The Treasury may from time to time by order direct that this paragraph shall have effect as if for the reference in sub-paragraph (1) above to £5,000 there were substituted a reference to such higher amount as may be specified in the order.

(5)An order under sub-paragraph (4) above shall apply in relation to deaths occurring after the expiration of a period of one month beginning with the date on which the order comes into force.

(6)The power to make an order under sub-paragraph (4) above is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

Receipts by depositors under ageU.K.

2U.K.Any receipt or acknowledgment given to a building society by a person who is a minor in respect of the payment to him of any sum due in respect of a deposit made by him with the society, shall not be invalid on the ground of his minority.

F942SCHEDULE 7AU.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F942Sch. 7A repealed (1.12.2001) by S.I. 2001/2617 arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

Section 34.

SCHEDULE 8U.K. Powers to Provide Services

[F943Part IU.K. The Services

Textual Amendments

F943Parts of Sch. 8 varied by S.I. 1988/1141, arts. 5, 6, Sch. 5 so as to have effect as set out in that Sch. 5

1U.K.Banking services.

2U.K.Investment services.

3U.K.Insurance services.

4U.K.Trusteeship.

5U.K.Executorship.

6U.K.Land services.]

Part IIU.K. General Restrictions On Services

1U.K.Subject to paragraphs 2, 3, 4 and 5 below, no power conferred on a building society to provide a service of a description specified in Part I of this Schedule of itself confers power—

(a)to perform the activities of—

(i)taking deposits in circumstances which require authorisation under the Banking Act 1987 (or would require authorisation were the taker not a building society),

(ii)making advances or loans of any description,

(iii)acquiring the right to be paid any sum owing to another person arising out of any arrangement under which money is borrowed or goods or services are provided on credit,

(iv)acquiring land,

(v)acquiring or holding any asset the power to acquire or hold which is derived from section 19 of this Act by virtue of an order made under, or partly under, that section,

(vi)acquiring or holding relevant investments, or

(vii)underwriting risks of any description, or

F944[(b)(i)to maintain a place of business in any country or territory for the purpose of providing that service unless the society also conducts the principal busi ness of a building society in that country or territory, save where that service is provided in any of the countries listed in paragraph (ii) below;

(ii)any member State, Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland,]

but nothing in this paragraph prohibits performance of any activity performance of which is within the capacity of a building society by virtue of any power arising otherwise than under this Schedule.

Textual Amendments

F944Sch. 8 Pt. II para. 1(b) substituted (1. 6. 1992) by S.I. 1992/509, art.3

2U.K.Paragraph 1 above shall not be taken to prevent—

(a)the power to provide banking services from conferring the power—

(i)to arrange the taking of deposits,

(ii)to arrange the lending of money, and

(iii)to arrange the bailment of leasable chattels,

(b)the power to provide investment services from conferring the power to arrange the acquisition or holding of relevant investments, or

(c)the power to provide insurance services from conferring the power to arrange the provision of insurance of any description.

3U.K.Where, as part of the power to provide banking services, a building society becomes guarantor of the discharge of liabilities of another person and is required to pay sums which that other person is obliged to pay, the right to recover those sums from that other person (with or without interest on them) shall not be treated as excluded by paragraph 1 above.

[F9454U.K.The right to recover any sum overdrawn (with or without interest on it) on an unauthorised overdraft on an account with a building society shall not be treated as excluded by paragraph 1 above.]

Textual Amendments

F945Sch. 8 Pt. II para. 4 substituted by S.I. 1989/839, art. 3(a)

5U.K.Acquiring or holding relevant investments shall not be treated as excluded by paragraph 1 above where it arises out of—

(a)any element of investment services comprising—

(i)acquiring or holding relevant investments as a nominee,

(ii)establishment and management of pension schemes,

(iii)establishment and management of personal equity plans, or

(iv)establishment and management of collective investment schemes,

(b)the service of trusteeship, or

(c)the service of executorship.

[F9466U.K.Paragraph 1 above shall not be taken to prevent the power to provide the service of trusteeship or the power to provide the service of executorship from conferring the power on a building society acting in the capacity of trustee or personal representative—

(i)to make advances or loans of any description, or

(ii)to acquire land.]

Textual Amendments

F946Sch. 8 Pt. II para. 6 added by S.I. 1989/839, art. 3(b)

Part IIIU.K. Restrictions In Relation To Certain Services

Banking servicesU.K.

1U.K.In relation to the power to provide banking services—

F947(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F948(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F948(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F947(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F947(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)provision of foreign exchange services, except where it arises for the purpose of or in the course of the provision of money transmission services, is restricted, save in excepted transactions, to their provision to individuals,

(g)arranging the provision of foreign exchange services is, subject to the exception in subparagraph (f) above, restricted, save in excepted transactions, to their provision to individuals, and

(h)administration of the issue of shares or corresponding membership rights by bodies corporate or of transferable instruments and registration of the transfer or cancellation of such shares, rights or instruments is restricted to administration and registration by a building society which has a qualifying asset holding.

Textual Amendments

F947Sch. 8 Pt. III para. 1(a)(d)(e) deleted (1.6.1995) by S.I. 1995/1189, art. 2

F948Sch. 8 Pt. III para. 1(b)(c) repealed by S.I. 1989/839, art. 3(c)

Investment servicesU.K.

2U.K.In relation to the power to provide investment services—

(a)managing investments (except in relation to management of pension schemes) is restricted to managing by a building society which has a qualifying asset holding,

(b)acquiring and holding relevant investments as a nominee is restricted to acquisition and holding by a building society which has a qualifying asset holding,

(c)establishment and management of pension schemes is restricted to schemes which do not include provisions requiring the investment of any of the funds within the scheme in shares in or deposits with a building society of which the trustee or manager of the scheme is a subsidiary,

(d)establishment of personal equity plans is restricted to establishment by a building society which has a qualifying asset holding, and

(e)establishment of collective investment schemes is restricted to establishment by a building society which has a qualifying asset holding.

TrusteeshipU.K.

[F9493U.K.In relation to the power to provide the service of trusteeship—

(a)a building society may not accept trusteeship of a prohibited trust, and

(b)a building society which becomes aware that a trust of which it is trustee has become a prohibited trust shall retire as trustee of that trust as soon as it is practicable to do so.]

Textual Amendments

F949Sch. 8 Pt. III para. 3 substituted by S.I. 1989/839, art. 3(d)

Land servicesU.K.

4U.K.In relation to the power to provide land services—

(a)the carrying on of estate agency work is restricted to carrying on by a subsidiary or other associated body of a building society,

(b)removal and storage of furniture is restricted to removal and storage by a subsidiary or other associated body of a building society which society has a qualifying asset holding,

(c)management of land is restricted to management by a building society which has a qualifying asset holding,

(d)management of land is restricted to land which is or is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land under the same management which is or is to be used primarily for residential purposes,

(e)arranging the management of land is restricted to land which is or is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land under the same management which is or is to be used primarily for residential purposes,

(f)development of land is restricted to development by a building society which has a qualifying asset holding,

(g)development of land is restricted to land which is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land developed by the developer which is or is to be used primarily for residential purposes,

(h)development of land is restricted to land of a local authority in Great Britain or of a development corporation or land which is charged in favour of the developer of the land to secure repayment of the costs of development, and

(i)arranging the development of land is restricted to land which is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land developed by the developer which is or is to be used primarily for residential purposes.

5U.K.No employee of a building society, a subsidiary or other associated body of which carries on estate agency work, whose duties include—

(a)making a report on the value of land which is to secure an advance,

(b)making an assessment of the adequacy of the security of an advance to be secured on land, or

(c)authorising the making of an advance to be secured on land,

shall perform any service on behalf of that subsidiary or other associated body.

Part IVU.K. Supplementary

Powers—generalU.K.

1U.K.Any power derived from this Schedule to perform any activity includes the power to arrange its performance but a restriction in Part III of this Schedule on the power to perform any activity does not imply an equivalent restriction on the power to arrange its performance.

Powers—specific servicesU.K.

2U.K.Without prejudice to the general scope of any service specified in Part I of this Schedule—

(a)the power to provide banking services includes power,

(i)to administer the issue of, and payments in respect of, shares or corresponding membership rights in bodies corporate or transferable instruments and to register the transfer or cancellation of such shares, rights or instruments, and

(ii)to provide advice on taxation and financial planning,

(b)the power to provide investment services includes power to provide advice on taxation and financial planning,

(c)the power to provide the service of executorship includes power—

(i)to act as administrator of the estates of deceased persons, and

(ii)to assist in the making of wills, and

(d)the power to provide land services includes power to carry out the removal and storage of furniture.

Banking—particular provisionsU.K.

3(1)A building society shall, so far as regards the carrying on of an activity which comprises provision of a banking service for the purposes of this Schedule, be treated for all purposes as a bank and a banker and as carrying on the business of banking or a banking undertaking whether or not it would be so treated apart from this paragraph.U.K.

(2)This paragraph does not affect the determination of any question as to the status of a building society as a bank or banker for other purposes.

4U.K.Where an account of a person with a building society has, by virtue of the provision of banking services under this Schedule, become overdrawn, it shall be the duty of the building society to take all reasonable steps to recover as soon as practicable from that person the amount due to it on the overdrawn account.

5(1)For the purposes of paragraph 1(f) and (g) of Part III of this Schedule, a transaction consisting in the provision of foreign exchange services is an excepted transaction where the value of the transaction is less than £10,000.U.K.

(2)For the purposes of subparagraph (1) above the value of a transaction consisting in the provision of foreign exchange services is, where the building society is selling foreign currency, the sum paid to it and, where the building society is purchasing foreign currency, the sum paid by it.

Land services—sanctionU.K.

6U.K.If a person performs any service in contravention of paragraph 5 of Part III of this Schedule he shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

InterpretationU.K.

7U.K.This Schedule is to be construed as relating only to the capacity of building societies to provide the services for the time being specified in it and not as making lawful any activity, whether of a building society or a subsidiary or other associated body of a building society, which would not be lawful apart from this Schedule.

Modifications etc. (not altering text)

C172Sch. 8 Pt. IV para. 7 extended (1. 1. 1993) by S.I. 1992/3218, reg. 82(1), Sch. 10 Pt. I para.22(d)

8U.K.In this Schedule—

Textual Amendments

F950Definitions inserted by S.I. 1989/839, art. 3(e)

F951Definition substituted by S.I. 1989/839, art. 3(f)

F954Definition inserted by S.I. 1989/839, art. 3(g)

[F955SCHEDULE 8AU.K. Transfer directions: modifications of Part X

Textual Amendments

F955Sch. 8A inserted (9.6.1997) by 1997 c. 32, s. 17(2), Sch. 4; S.I. 1997/1427, art. 2(c)

Part IU.K. Directions under section 42B(3)

PreliminaryU.K.

1U.K.This Part of this Schedule applies where a direction is given under section 42B(3) (“the direction”).

Compensation for loss of officeU.K.

2(1)The consent of the [F956appropriate authority] shall be sufficient authority for the provision for any such compensation as is mentioned in section 96(1)(a).U.K.

(2)A resolution of the board of directors passed in pursuance of the direction shall be sufficient authority for any such payments as are mentioned in section 96(1)(b).

Textual Amendments

Statements to membersU.K.

3(1)The following provisions of this paragraph shall apply in place of paragraph 1 of Schedule 16.U.K.

(2)The society shall send to every member entitled to notice of a meeting of the society, a statement containing—

(a)the particulars required, in relation to prescribed matters, by regulations under section 42B(8); and

(b)particulars of any other matters required by the [F956appropriate authority] in the case of the particular transfer of engagements,

with or without other particulars regarding that transfer.

[F957(2ZA)The PRA must consult the FCA before requiring any particulars under sub-paragraph (2)(b).]

[F958(2A)Where a statement is required to be sent to a member under sub-paragraph (2)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified to the society by that member for the purpose;

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

(2B)The conditions of this sub-paragraph are satisfied in the case of a statement if—

(a)the society and that person have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)F959... the society notifies him within the period specified in sub-paragraph (3) below of—

(i)the publication of the notice and any statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the documents may be accessed, and how they may be accessed; and

(d)that statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the [F956appropriate authority] whether to confirm the transfer pursuant to section 95.

(2C)In a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings of the meeting.]

(3)The statement shall be sent—

(a)where the [F956appropriate authority] has given the society a direction under section 42B(1)(a), within the period (not being less than 28 days) specified in [F960a final notice given by the [F956appropriate authority] under section 390 of the Financial Services and Markets Act 2000];

(b)where the [F956appropriate authority] has not given the society such a direction, within 14 days of the board of directors passing a resolution in pursuance of the direction.

[F961(3A)For the purposes of sub-paragraph (3) above, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2), a statement published on a web site in accordance with sub-paragraph (2B) is to be treated as sent to a person on the day that the notification is given in accordance with sub-paragraph (2B)(c).]

(4)No statement shall be sent unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under sub-paragraph (2)(b) above, have been approved by the [F956appropriate authority] .

(5)A failure to comply with a requirement of this paragraph shall not invalidate the transfer of engagements; but, if the society fails without reasonable excuse to comply with such a requirement the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F960Words in Sch. 8A para. 3(3)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 204(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Application for confirmationU.K.

4U.K.No application for confirmation by the [F956appropriate authority] of the transfer of engagements may be made under Part III of Schedule 16 until after the society has complied with the requirements of paragraph 3 above.

Textual Amendments

Grounds for not confirming transferU.K.

5U.K.Section 95 shall apply as if—

(a)for paragraphs (a) and (b) of subsection (4) there were substituted the following paragraph—

“(a)the members or a proportion of them would be unreasonably prejudiced by the transfer;”; and

(b)in subsection (6), for the words “paragraphs (a), (b) and (c)” there were substituted the words “ paragraphs (a) and (c) ” and, in paragraph (a), the words “, including the calling of a further meeting,” were omitted.

Part IIU.K. Directions under section 42B(4)

PreliminaryU.K.

6U.K.This Part of this Schedule applies where a direction is given under section 42B(4) (“the direction”).

Compensation for loss of officeU.K.

7(1)The consent of the [F956appropriate authority] shall be sufficient authority for the provision for any such compensation as is mentioned in section 99(2)(a).U.K.

(2)A resolution of the board of directors passed in pursuance of the direction shall be sufficient authority for any such payments as are mentioned in section 99(2)(b).

Textual Amendments

Increased remunerationU.K.

8U.K.If the [F956appropriate authority] consents to the inclusion of any such provision as is mentioned in section 99A(1), it shall not be necessary for an ordinary resolution approving the provision to be put before a meeting of the society.

Textual Amendments

Statements to membersU.K.

9(1)The following provisions of this paragraph shall apply in place of Part I of Schedule 17.U.K.

(2)The society shall send to every member entitled to notice of a meeting of the society, a statement containing—

(a)the particulars required, in relation to prescribed matters, by regulations under section 42B(8); and

(b)particulars of any other matters required by the [F956appropriate authority] in the case of the particular transfer of business,

with or without other particulars regarding that transfer.

[F962(2ZA)The PRA must consult the FCA before requiring any particulars under sub-paragraph (2)(b).]

[F963(2A)Where a statement is required to be sent to a member under sub-paragraph (2)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified to the society by that member for the purpose;

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

(2B)The conditions of this sub-paragraph are satisfied in the case of a statement if—

(a)the society and that person have agreed that statements that are required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)F964...the society notifies him within the period specified in sub-paragraph (3) of—

(i)the publication of the notice and any statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the documents may be accessed, and how they may be accessed; and

(d)that statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the [F956appropriate authority] whether to confirm the transfer pursuant to section 98.

(2C)Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement of sub-paragraph (2)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings of the meeting.]

(3)The statement shall be sent—

(a)where the [F956appropriate authority] has given the society a direction under [F965section 42B(1)(aa) or (b)] , within the period (not being less than 28 days) specified in [F966a final notice given by the [F956appropriate authority] under section 390 of the Financial Services and Markets Act 2000];

(b)where the [F956appropriate authority] has not given the society such a direction, within 14 days of the board of directors passing a resolution in pursuance of the direction.

[F967(3A)For the purposes of sub-paragraph (3) above, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2), a statement published on a web site in accordance with sub-paragraph (2B) is to be treated as sent to a person on the day that the notification is given in accordance with sub-paragraph (2B)(c).]

(4)No statement shall be sent unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under sub-paragraph (2)(b) above, have been approved by the [F956appropriate authority] .

(5)A failure to comply with a requirement of this paragraph shall not invalidate the transfer of business; but, if the society fails without reasonable excuse to comply with such a requirement the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Textual Amendments

F965Words in Sch. 8A para. 9(3) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 56(5), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F966Words in Sch. 8A para. 9(3)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 204(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C173Sch. 8A para. 9 amended (2.3.1998) by S.I. 1998/212, reg. 5(1), Sch. 3

Application for confirmationU.K.

10U.K.No application for confirmation by the [F956appropriate authority] of the transfer of business may be made under Part II of Schedule 17 until after the society has complied with the requirements of paragraph 9 above.

Textual Amendments

Grounds for not confirming transferU.K.

11U.K.Section 98 shall apply as if—

(a)for paragraphs (a) and (b) of subsection (3) there were substituted the following paragraph—

“(a)the members or a proportion of them would be unreasonably prejudiced by the transfer;”;

(b)in subsection (5), for the words “paragraphs (a), (b), (c) and (d)” there were substituted the words “ paragraphs (a), (c) and (d) ”; and

(c)in subsection (6), the words “the calling of a further meeting,” were omitted.]

Section 68(4).

SCHEDULE 9U.K. Directors: Requisite Particulars of Restricted Transactions

PreliminaryU.K.

1U.K.In this Schedule—

and other expressions have the same meaning as in those sections.

The requisite particularsU.K.

2(1)The particulars of a restricted transaction or arrangement required by section 68(3) are particulars of the principal terms of the transaction or arrangement.U.K.

(2)Without prejudice to the generality of sub-paragraph (1) above, the following particulars of a restricted transaction or arrangement are required—

(a)a statement of the fact either that the transaction or arrangement was made or that it subsisted during the financial year;

(b)the name of the person from whom it was made and, where that person is or was connected with a director of the building society, the name of that director;

(c)in the case of [F968a loan] or any related guarantee—

(i)the amount of the mortgage debt or corresponding liability both at the beginning and at the end of the financial year;

(ii)the maximum amount of that debt or liability during that year;

(iii)the amount of any interest which, having fallen due, has not been paid; and

(iv)the amount of any provision made in the accounts in respect of any failure or anticipated failure by the borrower to repay the whole or part of the loan or to pay the whole or part of any interest on it;

(d)in the case of a disposal of property by way of lease or hire—

(i)the value of the property;

(ii)the amount of any rental which, having fallen due, has not been paid; and

(iii)the amount of any provision made in the accounts in respect of any failure or anticipated failure by the lessee or hirer to pay the whole or part of the rent;

(e)in the case of any payment made on behalf of the director or person connected with him, the amount of the payment; and

(f)in the case of a guarantee or security—

(i)the amount for which the building society was liable under the guarantee or security both at the beginning and at the end of the financial year;

(ii)the maximum amount for which the society may become liable; and

(iii)any amount paid and any liability incurred by the society for the purposes of fulfilling the guarantee or security (including any loss incurred by reason of its enforcement).

Textual Amendments

F968Words in Sch. 9 para. 2(2)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, s. 43, Sch. 7 para. 59; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxv)

Section 69(7).

SCHEDULE 10U.K. Requisite Particulars of Income or Related Businesses

Part IU.K. Requisite Particulars Where no Adoption of Part II

ConveyancersU.K.

1U.K.Where the business associate of the building society provides conveyancing services the requisite particulars of its business in any financial year are the following—

(a)the number of cases in which it has provided conveyancing services in respect of [F969a loan] secured on land and the purchase of the land both to the society and to the borrower;

(b)the number of cases in which it has provided the society (but not the borrower) with conveyancing services in respect of [F969a loan] secured on land;

(c)the aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of conveyancing services falling within sub-paragraphs (a) and (b) above;

(d)the aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e)the aggregate amount of any fees paid to it by the society in consideration of the provision of conveyancing services in respect of any land held by the society [F970under section 6, 10, 17 or 19];

(f)the aggregate amount of any fees paid to it by the society in consideration of the provision of [F971administrative services] to the society.

Textual Amendments

F969Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F970Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F971Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Valuers and surveyorsU.K.

2U.K.Where the business associate of the building society provides the services of surveying and valuing property the requisite particulars of its business in any financial year are the following—

(a)the number of cases in which it has, in respect of any land which is to secure [F972a loan], surveyed the land or provided a valuation of it on behalf of the society or the borrower or both;

(b)the number of cases in which it has, on behalf of the society (but not the borrower), surveyed any land which is to secure [F972a loan] or provided the society with a valuation of it;

(c)the aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of the services falling within sub-paragraphs (a) and (b) above;

(d)the aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e)the aggregate amount of any fees paid to it by the society in consideration of the provision of surveying or valuing services in respect of any property held by the society [F973under section 6, 10, 17 or 19];

(f)the aggregate amount of any fees paid to it by the society in consideration of the provision of [F974administrative services] to the society.

Textual Amendments

F972Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F973Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F974Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

AccountantsU.K.

3U.K.Where the business associate of the building society provides accountancy services the requisite particulars of its business in any financial year are the following—

(a)the aggregate amount of the fees paid to it by the society for the provision of accountancy services; and

(b)the aggregate amount of any fees paid to it by the society in consideration of the provision of [F975administrative services] to the society.

Textual Amendments

F975Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Insurance agents, etc.U.K.

4U.K.Where the business associate of the building society arranges for the provision of relevant insurance the requisite particulars of its business in any financial year are the following—

(a)the aggregate of the amounts paid to it by the society or by way of commission by insurers in respect of relevant insurance effected by the society or by borrowers in compliance with the terms on which [F976loans] secured on land are made by the society; and

(b)the aggregate amount of any fees paid to it by the society in consideration of the provision of [F977administrative services] to the society.

Textual Amendments

F976Word in Sch. 10 paras. 4, 8 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F977Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Part IIU.K. Requisite Particulars on Adoption of This Part

ConveyancersU.K.

5U.K.Where the business associate of the building society provides conveyancing services the requisite particulars of its business in any financial year are the following—

(a)the prescribed band within which falls the estimated number of cases in which it has provided conveyancing services in respect of [F978a loan] secured on land and the purchase of the land both to the society and to the borrower;

(b)the prescribed band within which falls the estimated number of cases in which it has provided the society (but not the borrower) with conveyancing services in respect of [F978a loan] secured on land;

(c)the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of conveyancing services falling within sub-paragraphs (a) and (b) above;

(d)the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e)the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of conveyancing services in respect of any land held by the society [F979under section 6, 10, 17 or 19];

(f)the prescribed band within which falls the estimated aggregate of any fees paid to it by the society in consideration of the provision of [F980administrative services] to the society.

Textual Amendments

F978Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F979Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F980Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Valuers and surveyorsU.K.

6U.K.Where the business associate of the building society provides the services of surveying and valuing property the requisite particulars of its business in any financial year are the following—

(a)the prescribed band within which falls the estimated number of cases in which it has, in respect of any land which is to secure [F981a loan], surveyed the land or provided a valuation of it on behalf of the society or the borrower or both;

(b)the prescribed band within which falls the estimated number of cases in which it has, on behalf of the society (but not the borrower), surveyed any land which is to secure an advance or provided the society with a valuation of it;

(c)the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of the services falling within sub-paragraphs (a) and (b) above;

(d)the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e)the prescribed band within which falls the estimated aggregate of any fees paid to it by the society in consideration of the provision of surveying or valuing services in respect of any property held by the society [F982under section 6, 10, 17 or 19];

(f)the prescribed band within which falls the estimated aggregate amounts of any fees paid to it by the society in consideration of the provision of [F983administrative services] to the society.

Textual Amendments

F981Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F982Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F983Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

AccountantsU.K.

7U.K.Where the business associate of the building society provides accountancy services the requisite particulars of its business in any financial year are the following—

(a)the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society for the provision of accountancy services; and

(b)the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of [F984administrative services] to the society.

Textual Amendments

F984Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Insurance agents, etc.U.K.

8U.K.Where the business associate of the building society arranges for the provision of relevant insurance the requisite particulars of its business in any financial year are the following—

(a)the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society or by way of commission by insurers in respect of relevant insurance effected by the society or by borrowers in compliance with the terms on which [F985loans] secured on land are made by the society; and

(b)the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of [F986administrative services] to the society.

Textual Amendments

F985Words in Sch. 10 paras. 4, 8 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F986Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Part IIIU.K. Supplementary

Power to prescribe bands for Part II particularsU.K.

9(1)The [F987Treasury] may by order prescribe, for the purposes of the provisions of Part II of this Schedule,—U.K.

(a)series of numbers by reference to limits specified in the order, or

(b)series of monetary amounts by reference to limits so specified;

and, in any provision of Part II, “prescribed band” means, in relation to cases, any series of numbers so prescribed for the purposes of that provision and, in relation to monetary amounts, any series of monetary amounts so prescribed for the purposes of that provision.

(2)The power conferred by this paragraph includes power to prescribe different series of numbers or of monetary amounts for the purposes of different provisions.

(3)The power to make an order under this paragraph is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F987Words in Sch. 10 para. 9(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt II para. 205 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C174Sch. 10 paras. 9(1)(2): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt III; S.I. 2001/3538, art. 2

InterpretationU.K.

10(1)In this Schedule—U.K.

(2)In section 69, “the volume of the business”, in relation to any business constituted by the provision of any services referred to in any provision of Part I or Part II of this Schedule means—

(a)in the case of a paragraph of Part I, the aggregate of all the fees and commissions which are the subject of the requisite particulars under that paragraph; and

(b)in the case of a paragraph of Part II, the aggregate of the amounts which are specified in orders under paragraph 9 above as the upper limits of the prescribed bands within which fall the estimated aggregates of the fees or commissions or other amounts received which are the subject of the requisite particulars under the provisions of that paragraph

Section 72J

[F988SCHEDULE 10AU.K.Disclosures about directors, other officers and employees in notes to accounts

Textual Amendments

F988Schs. 10A, 10B inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 9

Part 1U.K.Emoluments of and dealings with directors and other officers

Aggregate amount of director’s remuneration etcU.K.

1.(1)The following must be shown—U.K.

(a)the aggregate amount of salary and fees and sums paid by way of expenses allowance (so far as they are chargeable to United Kingdom tax) paid to or receivable by directors in respect of qualifying services;

(b)the aggregate amount of bonuses paid to or receivable by directors in respect of qualifying services;

(c)the aggregate amount of the estimated money value of any other benefits paid to or receivable by directors in respect of qualifying services otherwise than in cash;

(d)the aggregate of the amount of gains made by directors on the exercise of share options;

(e)the aggregate of the following–

(i)the amount of money paid to or receivable by directors under long-term incentive schemes in respect of qualifying services; and

(ii)the net value of assets (other than money and share options) received or receivable by directors under such schemes in respect of such services;

(f)the aggregate value of any society contributions paid, or treated as paid, to a pension scheme in respect of directors' qualifying services, being contributions by reference to which the rate or amount of any money purchase benefits that may become payable will be calculated;

(g)the aggregate amount of the increase during the financial year in the value of any accrued pension or accrued lump sum comprising defined benefits payable in respect of any qualifying services performed by directors during the financial year; and

(h)the total aggregate amounts in paragraphs (a) to (g).

(2)In this paragraph–

(3)For the purposes of this paragraph amounts paid or receivable or share options granted in respect of a person’s accepting office as a director are treated as amounts paid or receivable or share options granted in respect of his services as a director.

(4)Where a pension scheme provides for any benefits that may become payable to or in respect of any director to be whichever are the greater of –

(a)money purchase benefits as determined by or under the scheme; and

(b)defined benefits as so determined,

the society may assume for the purposes of this paragraph that those benefits will be money purchase benefits, or defined benefits, according to whichever appears more likely at the end of the financial year.

(5)For the purpose of determining whether a pension scheme is a money purchase or defined benefit scheme, any death in service benefits provided for by the scheme are disregarded.

Textual Amendments

F989Words in Sch. 10A para. 1(2) substituted (24.7.2014) by Pensions Act 2011 (c. 19), ss. 29(5), 38(4); S.I. 2014/1683, art. 2

[F9911A(1)This paragraph applies for the purposes of the definition of “money purchase benefits” in paragraph 1(2).U.K.

(2)A benefit other than a pension in payment falls within this paragraph if its rate or amount is calculated solely by reference to assets which (because of the nature of the calculation) must necessarily suffice for the purposes of its provision to or in respect of the director.

(3)A benefit which is a pension in payment falls within this paragraph if—

(a)its provision to or in respect of the director is secured by an annuity contract or insurance policy made or taken out with an insurer, and

(b)at all times before coming into payment the pension was a benefit falling within this paragraph by virtue of sub-paragraph (2).

(4)For the purposes of sub-paragraph (2) it is immaterial if the calculation of the rate or amount of the benefit includes deductions for administrative expenses or commission.

(5)In this paragraph references to a pension do not include income withdrawal or dependants' income withdrawal (within the meaning of paragraphs 7 and 21 of Schedule 28 to the Finance Act 2004).]

Textual Amendments

Details of individual directors' remuneration etcU.K.

2.(1)There must be shown in respect of each director by name, so much of each of the relevant aggregates as is attributable to that director.U.K.

(2)In this paragraph “relevant aggregates” means the aggregates shown under paragraph 1(1)(a) to (h).

(3)Sub-paragraphs (2) to (5) of paragraph 1 apply for the purposes of this paragraph as they apply for the purposes of that paragraph.

Excess retirement benefits of directors and past directorsU.K.

3.(1)Subject to sub-paragraph (2), there must be shown the aggregate amount of–U.K.

(a)so much of retirement benefits paid to or receivable by directors under pension schemes; and

(b)so much of retirement benefits paid to or receivable by past directors under such schemes,

as (in each case) is in excess of the retirement benefits to which they were respectively entitled on the relevant date.

(2)For the purposes of sub-paragraph (1) the relevant date is whichever is the later of

(a)the date on which the benefits first became payable;

(b)27 March 1998; or

(c)the date on which the provisions of the Building Societies Act 1997 specified in Part 2 of the Schedule to the Building Societies Act 1997 (Commencement) (No.3) Order 1997, have come into force in accordance with Article 2 of that Order in relation to the society.

(3)Amounts paid or receivable under a pension scheme need not be included in the aggregate amount if –

(a)the funding of the scheme was such that the amounts were or, as the case may be, could have been paid without recourse to additional contributions; and

(b)amounts were paid to or receivable by all pensioner members of the scheme on the same basis,

and in this sub-paragraph “pensioner member”, in relation to a pension scheme, means any person who is entitled to the present payment of retirement benefits under the scheme.

(4)In this paragraph–

(a)references to retirement benefits include benefits otherwise than in cash; and

(b)in relation to so much of retirement benefits as consists of a benefit otherwise than in cash, references to their amount are to the estimated money value of the benefit,

and the nature of any such benefit must also be disclosed.

Compensation to directors for loss of officeU.K.

4.(1)There must be shown the amount of any compensation in respect of loss of office paid to or receivable by each director or past director by name, together with the aggregate amount of any such compensation.U.K.

(2)There must be shown the aggregate amount of any compensation referred to in sub-paragraph (1) in respect of the preceding financial year.

(3)The amounts referred to in sub-paragraph (1) include compensation received or receivable by a director or past director for–

(a)loss of office as director of the society, or

(b)loss, while director of the society or on or in connection with his ceasing to be a director of it, of–

(i)any other office in connection with the management of the society’s affairs, or

(ii)any office as director or otherwise in connection with the management of the affairs of any connected undertaking of the society.

(4)References in this paragraph–

(a)to compensation include benefits paid or receivable other than in cash; and

(b)to the amount of compensation are to the estimated money value of the benefit;

(5)The nature of any such compensation must be disclosed.

(6)In this paragraph, references to compensation for loss of office include the following–

(a)compensation in consideration for, or in connection with, a person’s retirement from office; and

(b)where such a retirement is occasioned by a breach of the person’s contract with the society or with a subsidiary undertaking of the society–

(i)payments made by way of damages for the breach; or

(ii)payments made by way of settlement or compromise of any claim in respect of the breach.

Sums paid to third parties in respect of directors' servicesU.K.

5.(1)There must be shown the aggregate amount of any consideration paid to or receivable by third parties for making available the services of any person–U.K.

(a)as a director of the society, or

(b)while director of the society–

(i)as director of any of its connected undertakings, or

(ii)otherwise in connection with the management of the affairs of the society or any of its connected undertakings.

(2)The reference in sub-paragraph (1) to consideration includes benefits paid or receivable other than in cash; and–

(a)the nature of any such consideration must be disclosed, and

(b)in relation to such consideration the reference to its amount is to the estimated money value of the benefit.

(3)The reference in sub-paragraph (1) to third parties is to persons other than –

(a)the director himself or a person connected with him or a body corporate associated with him, and

(b)the society or any of its connected undertakings.

Supplementary provisions regarding directors' remunerationU.K.

6.(1)The following applies with respect to the amounts to be shown under paragraphs 1 to 5.U.K.

(2)The amount in each case includes all relevant sums paid by or receivable from–

(a)the society;

(b)the society’s connected undertakings; and

(c)any other person,

except sums to be accounted for to the society or any of its connected undertakings.

(3)References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate associated with him (but not so as to require an amount to be counted twice).

7.(1)The amounts to be shown for any financial year under paragraphs 1 to 5 are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.U.K.

(2)But where–

(a)any sums are not shown in a note to the accounts for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 6(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or

(b)any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year,

those sums must, to the extent to which the liability is released or not enforced or they are charged as mentioned (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and must be distinguished from the amounts to be shown apart from this provision.

8.(1)Where the chief executive of the society is not also a director of the society, he is deemed, for the purposes of paragraphs 1 to 7, to be a director of the society.U.K.

(2)In such circumstances there must be a note in the accounts specifying that the chief executive has been so deemed to be a director.

Interpretation of provisions regarding directors remunerationU.K.

9.(1)Sub-paragraphs (2) and (3) apply for the interpretation of paragraphs 1 to 8.U.K.

(2)For the purposes of paragraphs 1 and 2 a reference to a connected undertaking of the society is to any undertaking which is a connected undertaking at the time the services were rendered, and for the purposes of paragraph 4 is a reference to a connected undertaking immediately before the loss of office as a director.

(3)The following definitions apply–

(a)“pension scheme” has the meaning assigned to “retirement benefits scheme” by section 611 of the Income and Corporation Taxes Act 1988;

(b)“retirement benefits” has the meaning assigned to “relevant benefits” by section 612(1) and (2) of that Act.

(4)In paragraphs 5 and 6, references to a person being “connected” with a director, and to a director being “associated with” a body corporate, shall be construed in accordance with section 70 of this Act.

Directors' loans and transactionsU.K.

10.(1)This paragraph applies, subject to sub-paragraph (4), in relation to–U.K.

(a)loans from and other transactions and arrangements with the society described in section 65 (which restricts loans to and other transactions and arrangements with directors and persons connected to them), other than those to which section 65(5) and (6) applies, and

(b)in the case of a society the directors of which are required to prepare consolidated group accounts, loans from and other transactions and arrangements with a subsidiary undertaking of the society to which paragraph (a) would apply were the society rather than the subsidiary undertaking a party to them.

(2)The notes to the annual accounts must contain a statement, in relation to such loans, transactions and arrangements, showing–

(a)the aggregate amounts outstanding under them at the end of the financial year; and

(b)the numbers of persons for whom such loans, transactions and arrangements were made.

(3)The notes to the annual accounts must, in relation to any loan, or other transaction or arrangement subsisting during or at the end of the financial year, make the following disclosures–

(a)where a copy of it or a memorandum of its terms is included in the register maintained under section 68, the existence of the register and the availability of requisite particulars from it for inspection must be disclosed;

(b)where it comes within paragraph (1)(b), its particulars must be disclosed unless it was one which would, had the subsidiary undertakings of the society formed part of the society, have been exempted from the obligations imposed by section 68.

(4)This paragraph applies in relation to loans to, and other transactions and arrangements with, a person connected with a director of the society where the society (or in the case of a subsidiary undertaking incorporated in the United Kingdom, the subsidiary undertaking) has notice of the connection between that director and that person.

Disclosure of auditors' remunerationU.K.

F99211.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Persons who are to be regarded as associates of a society’s auditorsU.K.

F99312.U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

PART 2U.K.Information about employees

13.(1) The following information with respect to the employees of a building society must be given in notes to the society’s individual accounts–U.K.

(a)the average number of persons employed by the society in the financial year, and

(b)the average number of persons so employed within each category of persons employed by the society.

(2)The average number required by paragraph (1)(a) or (b) is determined by dividing the relevant annual number by the number of complete calendar months in the financial year.

(3)The relevant annual number is determined by ascertaining for each complete calendar month in the financial year–

(a)for the purposes of paragraph (1)(a), the number of persons employed under contracts of service by the society in that month (whether throughout the month or not);

(b)for the purposes of paragraph (1)(b), the number of persons in the category in question of persons so employed;

and, in either case, adding together all the monthly numbers.

(4)In respect of all persons employed by the society during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph (1)(a) there must also be stated the aggregate amounts respectively of–

(a)wages and salaries paid or payable in respect of that year to those persons;

(b)social security costs incurred by the society on their behalf; and

(c)other pension costs so incurred.

This does not apply in so far as those amounts, or any of them, are stated elsewhere in the society’s accounts.

(5)For the purposes of paragraph (1)(b) the categories of person employed by the society are such as the directors may select, having regard to the manner in which the society’s activities are organised.

(6)This paragraph applies in relation to group accounts as if the undertakings included in those accounts were a single society.

(7)In this paragraph–

(a)“social security costs” means any contribution by the society to any state social security or pension scheme, fund or arrangement;

(b)“pension costs” includes any costs incurred by the society in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the society, any sums set aside for future payment of pensions directly by the society to current or former employees and any pensions paid directly to such persons without having been first set aside.

Section 72K

SCHEDULE 10BU.K.Disclosures about related undertakings required in note to accounts

PART 1U.K.Societies not required to prepare consolidated group accounts

Subsidiary undertakingsU.K.

1.(1)The following information must be given where at the end of the financial year the society has subsidiary undertakings but is not required to prepare consolidated group accounts.U.K.

(2)The name of each subsidiary undertaking shall be stated.

(3)There must be stated with respect to each subsidiary undertaking–

(a)if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b)if it is unincorporated, the address of its principal place of business.

(4)The specific reason why each subsidiary undertaking is not required to be included in consolidated group accounts must be stated.

Holdings in subsidiary undertakingsU.K.

2.(1)There must be stated in relation to shares of each class held by the society in a subsidiary undertaking–U.K.

(a)the identity of the class; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

(2)The shares held by or on behalf of the society itself must be distinguished from those attributed to the society which are held by or on behalf of a subsidiary undertaking.

Financial information about subsidiary undertakingsU.K.

3.(1)There must be disclosed with respect to each subsidiary undertaking–U.K.

(a)the aggregate amount of its capital and reserves as at the end of its relevant financial year; and

(b)its profit or loss for that year.

(2)The information referred to in sub-paragraph (1) need not be given if the society’s investment in the subsidiary undertaking is included in the society’s accounts by way of the equity method of valuation or if–

(a)the subsidiary undertaking is not required by any provision of [F994the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(3)Information otherwise required by this paragraph need not be given if it is not material–

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate section 72F(2), or

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(4)For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is–

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

Textual Amendments

Financial years of subsidiary undertakingsU.K.

4.U.K.Where—

(a)disclosure is made under paragraph 3(1) with respect to a subsidiary undertaking; and

(b)that undertaking’s financial year does not end with that of the society,

there must be stated in relation to that undertaking the date on which its last financial year before the end of the society’s financial year ended.

Significant holdings in undertakings other than subsidiary undertakingsU.K.

5.(1)The information required by paragraphs 6 and 7 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not a subsidiary undertaking of the society.U.K.

(2)A holding is significant for this purpose if–

(a)it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b)the amount of the holding (as stated or included in the society’s accounts) exceeds one-fifth of the amount (as so stated) of the society’s assets.

6.(1)The name of the undertaking must be stated.U.K.

(2)There must be stated–

(a)if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b)if it is unincorporated, the address of its principal place of business.

(3)There must also be stated–

(a)the identity of each class of shares in the undertaking held by the society; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

(4)Information otherwise required by this paragraph need not be given if it is not material–

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or ,where appropriate, section 72F(2), or

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

7.(1)There must also be stated–U.K.

(a)the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and

(b)its profit or loss for that year.

(2)That information need not be given if the investment of the society in all undertakings in which it has a significant holding is shown, in aggregate, in the notes to the accounts by way of the equity method of valuation.

(3)That information need not be given in respect of an undertaking if

(a)the undertaking is not required by any provision of [F995the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(4)Information otherwise required by this paragraph need not be given if it is not material–

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate, section 72F(2), or

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(5)For the purposes of this paragraph the “relevant financial year” of an undertaking is –

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

Textual Amendments

Construction of references to shares held by societyU.K.

8.(1)References in this Part of this Schedule to shares held by a society shall be construed as follows.U.K.

(2)For the purposes of paragraphs 2 and 3–

(a)shares held by a subsidiary undertaking, or by a person acting on behalf of the society or a subsidiary undertaking are treated as if they were held by the society; but

(b)shares held on behalf of a person other than the society or a subsidiary undertaking are not treated as if they were held by the society.

(3)For the purposes of paragraphs 5 to 7–

(a)shares held on behalf of a society by any person are treated as if they were held by the society; but

(b)shares held on behalf of a person other than the society are not treated as if they were held by the society.

(4)For the purposes of paragraphs 2 to 7, shares held by way of security shall be treated as if they were held by the person providing the security –

(a)where apart from the right to exercise them for the purposes of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions, and

(b)where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in his interests.

PART 2U.K.Societies required to prepare consolidated group accounts

Subsidiary undertakingsU.K.

9.(1)The following information must be given with respect to the undertakings that are subsidiary undertakings of the society at the end of the financial year.U.K.

(2)The name of each undertaking must be stated.

(3)There must be stated–

(a)if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b)if it is unincorporated, the address of its principal place of business.

(4)It must be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reason for excluding it from the consolidation must be given.

(5)It must be stated with respect to each subsidiary undertaking of the society by virtue of which of the conditions specified in [F996section 1162 of the Companies Act 2006] it is a subsidiary undertaking of the society.

(6)That information need not be given in relation to a subsidiary undertaking if—

(a)the relevant condition is that specified in subsection (2)(a) of that section, and

(b)the society that is its immediate parent undertaking (within the meaning of [F997section 1162 of the Companies Act 2006]) holds the same proportion of the shares in the undertaking as it holds voting rights.

Textual Amendments

Holdings in subsidiary undertakingsU.K.

10.(1)The following information must be given with respect to the shares of a subsidiary undertaking held—U.K.

(a)by the society, and

(b)by the group,

and the information required under paragraphs (a) and (b) must (if different) be shown separately.

(2)There must be stated–

(a)the identity of each class of shares held, and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

Financial information about subsidiary undertakings not included in the consolidationU.K.

11.(1)There must be shown with respect to each subsidiary undertaking not included in the consolidation–U.K.

(a)the aggregate amount of its capital and reserves as at the end of its relevant financial year, and

(b)its profit or loss for that year.

(2)The information referred to in sub-paragraph (1) need not be given if the group’s investment in the subsidiary undertaking is included in the accounts by way of the equity method of valuation or if –

(a)the subsidiary undertaking is not required by any provision of [F998the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the holding of the group is less than 50 per cent of the nominal value of the shares in the subsidiary undertaking.

(3)Information otherwise required by this paragraph need not be given if it is not material—

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(4)For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is –

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

Textual Amendments

Associated undertakingsU.K.

12.(1)The following information must be given where an undertaking included in the consolidation has an interest in an associated undertaking.U.K.

(2)The name of the associated undertaking must be stated.

(3)There must be stated–

(a)if the associated undertaking is incorporated outside the United Kingdom, the country in which it is incorporated, and

(b)if it is unincorporated, the address of its principal place of business.

(4)The following information must be given with respect to the shares of the associated undertaking held–

(a)by the society; and

(b)by the group,

and the information required under paragraphs (a) and (b) must (if different) be given separately.

(5)There must be stated–

(a)the identity of each class of shares in the associated undertaking held; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

Other significant holdings of society or groupU.K.

13.(1)The information required by paragraphs 14 and 15 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not one of its subsidiary undertakings and does not fall within paragraph 12 (associated undertakings).U.K.

(2)A holding is significant for this purpose if–

(a)it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b)the amount of the holding (as stated or included in the society’s individual accounts) exceeds one-fifth of the amount of the society’s assets (as so stated).

14.(1)The name of the undertaking must be stated.U.K.

(2)There must be stated –

(a)if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b)if it is unincorporated, the address of its principal place of business.

(3)There must also be stated–

(a)the identity of each class of shares in the undertaking held by the society; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

(4)The information otherwise required by this paragraph need not be given if it is not material—

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

15.(1)There must also be stated–U.K.

(a)the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year; and

(b)its profits or loss for that year.

(2)That information need not be given in respect of an undertaking if–

(a)the undertaking is not required by any provision of [F999the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(3)Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(4)For the purposes of this paragraph the “relevant financial year” of an undertaking is–

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

Textual Amendments

16.(1)The information required by paragraphs 17 and 18 must be given where at the end of the financial year the group has a significant holding in an undertaking which is not a subsidiary undertaking of the society and does not fall within paragraph 12 (associated undertakings).U.K.

(2)A holding is significant for this purpose if–

(a)it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b)the amount of the holding (as stated or included in the group accounts) exceeds one-fifth of the amount of the group’s assets (as so stated).

17.(1)The name of the undertaking must be stated.U.K.

(2)There must be stated–

(a)if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b)if it is unincorporated, the address of its principal place of business.

(3)There must also be stated–

(a)the identity of each class of shares in the undertaking held by the group; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

(4)Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

18.(1)There must also be stated–U.K.

(a)the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year; and

(b)its profit or loss for that year.

(2)That information need not be given if–

(a)the undertaking is not required by any provision of [F1000the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere; and

(b)the holding of the group is less than 50 per cent of the nominal value of the shares in the undertaking.

(3)Information otherwise required by this paragraph need not be given if it is not material—

(a)for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(4)For the purposes of this paragraph the “relevant financial year” of an undertaking is–

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

Textual Amendments

Construction of references to shares held by society or groupU.K.

19.(1)References in this Part of this Schedule to shares held by the society or the group shall be construed as follows.U.K.

(2)For the purposes of paragraphs 10, 12(4) and (5) and 13 to 15–

(a)shares held on behalf of a society by any person are treated as if they were held by the society; but

(b)shares held on behalf of a person other than the society are not treated as if they were held by the society.

(3)References to shares held by the group are to any shares held by or on behalf of the society or any of its subsidiary undertakings; but shares held on behalf of a person other than the society or any of its subsidiary undertakings are not treated as if they were held by the group.

(4)Shares held by way of security are treated as if they were held by the person providing the security in the following cases–

(a)where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions;

(b)where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of security, or of realising it, the rights attached to the shares are exercisable only in his interests.

Interpretation: generalU.K.

20.U.K.In this Schedule, “group” means a building society and its subsidiary undertakings.]

Section 72M

[F1001SCHEDULE 10CU.K.Disclosure of auditor remuneration etc required in notes to accounts

Textual Amendments

Disclosure requiredU.K.

1.(1)The following must be shown—U.K.

(a)the amount of any remuneration receivable by the society’s auditor for the auditing of the annual accounts, and

(b)the amount of any remuneration receivable in respect of the financial year by—

(i)the society’s auditor, or

(ii)any person who was, at any time during that financial year, an associate of the society’s auditor,

for the supply of other services to the society or any associate of the society.

(2)Where the remuneration includes benefits in kind, the nature and estimated money-value of those benefits must also be shown.

(3)Separate disclosure is required in respect of the auditing of the accounts in question and of each type of service specified in paragraph 2, but not in respect of each service falling within a type of service.

(4)Separate disclosure is required in respect of services supplied to the society and its subsidiaries on the one hand and to associated pension schemes on the other.

(5)Where more than one person has been appointed as a society’s auditor in respect of the financial year, separate disclosure is required in respect of the remuneration of each such person and his associates.

(6)Where a building society is required to prepare consolidated group accounts—

(a)those accounts must comply with sub-paragraph (1)(b) as if the undertakings included in the consolidation were a single building society, and

(b)notes to the society’s individual accounts do not have to disclose the information required by that provision if the notes state that the group accounts are so required.

Types of serviceU.K.

2.U.K.The types of service in respect of which disclosure is required are—

(a)the auditing of accounts of associates of the society pursuant to legislation (including that of countries and territories outside the United Kingdom);

(b)other services supplied pursuant to such legislation;

(c)other services relating to taxation;

(d)services relating to information technology;

(e)internal audit services;

(f)valuation and actuarial services;

(g)services relating to litigation;

(h)services relating to recruitment and remuneration;

(i)services relating to corporate finance transactions entered into or proposed to be entered into on behalf of the society or any of its associates;

(j)all other services.

Disclosure not required of remuneration for certain services provided by distant associateU.K.

3.(1)Disclosure is not required of remuneration receivable for the supply of services falling within paragraph 2(j) supplied by a distant associate of the society’s auditor where the total remuneration receivable for all of those services supplied by that associate does not exceed—U.K.

(a)£10,000, or

(b)1% of the total audit remuneration received by the society’s auditor in the most recent financial year of the auditor which ended no later than the end of the financial year of the society to which the accounts relate.

(2)In sub-paragraph (1)(b)—

(a)“financial year of the auditor” means—

(i)the period of not more than 18 months in respect of which the auditor’s profit and loss account is required to be made up (whether by law or by or in accordance with the auditor’s constitution (if any)), or

(ii)failing any such requirement, the period of 12 months beginning with 1st April;

(b)“total audit remuneration received” means the total remuneration received for the auditing pursuant to legislation (including that of countries and territories outside the United Kingdom) of any accounts of any person.

Duty of auditor to supply informationU.K.

4.U.K.The auditor of a building society must supply the directors of the society with such information as is necessary to enable the disclosure required by paragraph 1 to be made.

Meaning of “associate” and “distant associate” of auditorU.K.

5.(1)This paragraph defines what is meant in this Schedule by an “associate” or a “distant associate” of a building society’s auditor.U.K.

(2)The following are associates of a society’s auditor—

(a)any person controlled by the society’s auditor or by any associate of the society’s auditor (whether alone or through two or more persons acting together to secure or exercise control), but only if that control does not arise solely by virtue of the society’s auditor or any associate of the society’s auditor acting—

(i)as an insolvency practitioner in relation to any person,

(ii)in the capacity of a receiver, or a receiver or manager, of the property of a society or other body corporate, or

(iii)as a judicial factor on the estate of any person;

(b)any person who, or group of persons acting together which, has control of the society’s auditor;

(c)any person using a trading name which is the same as or similar to a trading name used by the society’s auditor, but only if the society’s auditor uses that trading name with the intention of creating the impression of a connection between the auditor and that other person;

(d)any person who is party to an arrangement with the society’s auditor, with or without any other person, under which costs, profits, quality control, business strategy or significant professional resources are shared.

(3)Where the society’s auditor is a partnership, the following are also associates of the auditor—

(a)any partner in the society’s auditor;

(b)any body corporate which is in the same group as a body corporate which is a partner in the society’s auditor;

(c)any body corporate of which a partner in the society’s auditor is a director;

(d)any partnership which has a partner in common with the society’s auditor;

(e)any body corporate which is in the same group as a body corporate which is a partner in a partnership which has a partner in common with the society’s auditor.

(4)Where a society’s auditor is a body corporate (other than one which is also a partnership as defined in sub-paragraph (6)(d)), the following are also associates of the auditor—

(a)any director of the society’s auditor;

(b)any body corporate which is in the same group as a body corporate which is a director of the society’s auditor;

(c)any body corporate which is in the same group as the society’s auditor;

(d)any partnership in which any such body corporate which is in the same group as the society’s auditor is a partner;

(e)any partnership in which a director of the society’s auditor is a partner;

(f)any body corporate which has a director in common with the society’s auditor;

(g)any body corporate which is in the same group as a body corporate which has a director in common with the society’s auditor.

(5)A distant associate of a society’s auditor is a person who is an associate of that auditor by reason only that that person is an associate within one or more of—

(a)sub-paragraph (2)(a) where the person in question is controlled by a distant associate of the society’s auditor and not by the auditor or by an associate who is not a distant associate;

(b)sub-paragraph (3)(c), (d) or (e);

(c)sub-paragraph (4)(e), (f) or (g).

(6)For the purposes of this paragraph—

(a)“acting as an insolvency practitioner” shall be construed in accordance with section 388 of the Insolvency Act 1986 or Article 3 of the Insolvency (Northern Ireland) Order 1989;

(b)“director” includes any person occupying the position of director, by whatever name called;

(c)“partner” includes a member of a limited liability partnership;

(d)“partnership” includes a limited liability partnership and a partnership constituted under the law of a country or a territory outside the United Kingdom;

(e)a reference to “a receiver, or a receiver or manager, of the property of a society or other body corporate” includes a receiver, or (as the case may be) a receiver or manager, of part only of that property;

(f)a person able, directly or indirectly to control or materially to influence the operating and financial policy of another person shall be treated as having control of that other person; and

(g)a body corporate is in the same group as another body corporate if one is a subsidiary of the other.

InterpretationU.K.

6.U.K.In this Schedule—

Section 77.

SCHEDULE 11U.K.F1002 Auditors: Appointment, Tenure...

Textual Amendments

Modifications etc. (not altering text)

C175Sch. 11 excluded by S.I. 1986/2168, art. 12(a)

AppointmentU.K.

1(1)The [F1003first auditor] of a building society may be appointed by the directors at any time before the first general meeting of the building society following the end of the society’s first financial year [F1004and an auditor] so appointed shall hold office until the conclusion of that meeting.U.K.

(2)If the directors fail to exercise their powers under sub-paragraph (1) above those powers may be exercised by the building society in general meeting.

Textual Amendments

2U.K.The directors, or the building society in general meeting, may fill any casual vacancy in the office of auditor; but while any such vacancy continues, the surviving or continuing auditor or auditors (if any) may act.

3(1)If at any annual general meeting of a building society no [F1005auditor is] appointed or re-appointed, the [F1006appropriate authority] may appoint a person to fill the vacancy; and the society shall, within one week of the power of the [F1006appropriate authority] becoming exercisable, [F1007give notice to the FCA and, if the society is a PRA-authorised person, to the PRA] of that fact.U.K.

(2)If a building society fails to give the notice required by sub-paragraph (1) above the society shall be liable on summary conviction—

(a)to a fine not exceeding level 3 on the standard scale, and

(b)in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continuesX;

and so shall any officer who is also guilty of the offence.

Textual Amendments

F10083AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1008Sch. 11 para. 3A omitted (with effect in accordance with reg. 1(4) of the amending S.I.) by virtue of The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(a)

[F10093B(1)This paragraph applies to the appointment of an auditor or auditors under section 77, where the building society has an audit committee.U.K.

(2)Before an appointment to which this paragraph applies is made—

(a)the audit committee of the building society must make a recommendation to the directors in connection with the appointment, and

(b)the directors must propose an auditor or auditors for appointment F1010...

(3)Before the audit committee makes a recommendation or the directors make a proposal under sub-paragraph (2), the committeeF1011... must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation.

(4)The audit committee must in its recommendation—

(a)identify its first and second choice candidates for appointment, [F1012drawn from those auditors who have participated in a selection procedure under sub-paragraph (3),]

(b)give reasons for the choices so identified,

(c)state that—

(i)the recommendation is free from influence by a third party, and

(ii)no contractual term of the kind mentioned in [F1013Article 16(6) of the Audit Regulation] has been imposed on the building society.

[F1014(5)The directors must include in their proposal—

(a)the recommendation made by the audit committee in connection with the appointment, and

(b)if the proposal of the directors departs from the preference of the audit committee—

(i)a recommendation for a candidate or candidates for appointment drawn from those auditors who have participated in a selection procedure under sub-paragraph (3), and

(ii)the reasons for not following the audit committee’s recommendation.

(6)Where the audit committee recommends re-appointment of the society’s existing auditor or auditors, and the directors are in agreement, sub-paragraphs (3) and (4)(a) and (b) do not apply.]

Textual Amendments

F1010Words in Sch. 11 para. 3B(2)(b) omitted (with effect in accordance with reg. 1(4) of the amending S.I.) by virtue of The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(b)(i)

F1011Words in Sch. 11 para. 3B(3) omitted (with effect in accordance with reg. 1(4) of the amending S.I.) by virtue of The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(b)(ii)

F1012Words in Sch. 11 para. 3B(4)(a) inserted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(b)(iii)

F1013Words in Sch. 11 para. 3B(4)(c) substituted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(b)(iv)

F1014Sch. 11 para. 3B(5)(6) substituted for Sch. 11 para. 3B(5)-(7) (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(b)(v)

3C(1)This paragraph applies to the appointment of an auditor or auditors under section 77, where the building society does not have an audit committee.U.K.

(2)Before an appointment to which this paragraph applies is made the directors must propose an auditor or auditors for appointment.

(3)Before the directors make a proposal under sub-paragraph (2), they must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation [F1015, from which their proposed auditor or auditors must be drawn] .

[F1016(4)Sub-paragraph (3) does not apply in relation to a proposal to re-appoint the society’s existing auditor or auditors.]]

Textual Amendments

F1015Words in Sch. 11 para. 3C(3) inserted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(c)(i)

F1016Sch. 11 para. 3C(4) substituted for Sch. 11 para. 3C(4)-(6) (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(c)(ii)

[F10173D.(1)A person who has been, or will have been, auditor of a building society in respect of every financial year comprised in the maximum engagement period may not be appointed as auditor of the society in respect of any financial year which begins within the period of 4 years beginning with the day after the last day of the last financial year of the maximum engagement period.U.K.

(2)A person who is a member of the same network as the auditor mentioned in sub-paragraph (1) may not be appointed as auditor of the society in respect of any financial year which begins within the period of 4 years mentioned in that sub-paragraph.

(3)In this paragraph “network” means an association of persons, other than a firm, co-operating in audit work by way of—

(a)profit-sharing;

(b)cost-sharing;

(c)common ownership, control or management;

(d)common quality control policies and procedures;

(e)common business strategy; or

(f)use of a common name.

Textual Amendments

F1017Sch. 11 paras. 3D, 3E inserted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(d)

3E.(1)Where a person is auditor of a building society in respect of consecutive financial years, the maximum engagement period of the person as auditor of the society—U.K.

(a)begins with the first of those years (see the appropriate entry in the first column of the following Table), and

(b)ends with the financial year specified in the corresponding entry in the second column of the Table:

First financial year of the maximum engagement periodLast financial year of the maximum engagement period

A financial year of the society beginning before 17 June 1994

The last financial year of the society to begin before 17 June 2020.

A financial year of the society beginning—

(a) on or after 17 June 1994, and

(b) before 17 June 2003

The last financial year of the society to begin before 17 June 2023.

A financial year of the society beginning—

(a) on or after 17 June 2003, and

(b) before 17 June 2016

No qualifying selection procedure

Where neither the first financial year of the maximum engagement period nor any subsequent financial year is one in respect of which the auditor has been appointed following the carrying out of a qualifying selection procedure, the later of-

(a) the last financial year of the society to begin before 17 June 2016, and

(b) the last financial year of the society to begin within the period of 10 years beginning with the first day of the first financial year of the maximum engagement period.

No qualifying selection procedure within 10 years

Where the last day of the last financial year of the society to begin within the period of 10 years beginning with the first day of the last financial year of the society in respect of which the auditor was appointed following a qualifying selection procedure is before 17 June 2016—

(a) the last financial year of the society to begin before 17 June 2016, unless

(b) the auditor is appointed following a qualifying selection procedure for the first financial year of the society to begin on or after 17 June 2016, in which case it is the last financial year of the society to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.

Qualifying selection procedure within 10 years

In any other case, the earlier of-

(a) the last financial year of the society to begin within the period of 10 years beginning with the first day of the last financial year of the society in respect of which the auditor was appointed following a qualifying selection procedure, and

(b) the last financial year of the society to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.

A financial year of the society beginning on or after 17 June 2016

The earlier of—

(a) the last financial year of the society to begin within the period of 10 years beginning with the first day of the last financial year of the society in respect of which the auditor was appointed following a qualifying selection procedure, and

(b) the last financial year of the society to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.

(2)Where the first financial year of the maximum engagement period begins on or after 17 June 2003, the maximum engagement period may be extended by a period of no more than 2 years with the approval of the competent authority.

(3)Such approval may be given by the competent authority only if it is satisfied that exceptional circumstances exist.

(4)Where the competent authority gives its approval as mentioned in sub-paragraph (2)—

(a)the second column of the Table in sub-paragraph (1) has effect with the necessary modifications, and

(b)the first appointment to be made after the end of the period as so extended must be made following a qualifying selection procedure.

(5)In this paragraph “qualifying selection procedure” means—

(a)in the case of an appointment in respect of a financial year beginning on or after 17 June 2016 made after the Statutory Auditors and Third Country Auditors Regulations 2017 come into force—

(i)if the society has an audit committee, a selection procedure that complies with the requirements of paragraph 3B(3) and (4)(a) and (b), and

(ii)if the society does not have an audit committee, a selection procedure that complies with the requirements of Article 16(3) of the Audit Regulation;

(b)in any other case, a selection procedure that substantially meets the requirements of Article 16(2) to (5) of the Audit Regulation, having regard to the circumstances at the time (including whether the society had an audit committee).]

Textual Amendments

F1017Sch. 11 paras. 3D, 3E inserted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(d)

4(1)A resolution at a general meeting of a building society—U.K.

(a)appointing as auditor a person other than a retiring auditor; or

(b)filling a casual vacancy in the office of auditor; or

(c)reappointing as auditor a retiring auditor who was appointed by the directors to fill a casual vacancy; or

(d)removing an auditor before the expiration of his term of office,

shall not be effective unless notice of the intention to move it has been given to the society not less than twenty-eight days before the meeting at which it is moved.

(2)A building society shall give to its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting, or, if that is not practicable, shall give them notice of the resolution, not less than twenty-one days before the meeting, either by advertisement in a newspaper having an appropriate circulation or in any other way allowed by the rules of the society.

(3)On receipt of notice of such an intended resolution as is mentioned above the society shall forthwith send a copy of it—

(a)to the person proposed to be appointed or removed, as the cae may be;

(b)in a case within sub-paragraph (1)(a), to the retiring auditor; and

(c)where, in a case within sub-paragraph (1)(b) or (c), the casual vacancy was caused by the resignation of an auditor, to the auditor who resigned.

(4)Where notice is given of such a resolution as is mentioned in sub-paragraphs (1)(a) or (d) and the retiring auditor, or (as the case may be) the auditor proposed to be removed, makes with respect to the intended resolution representations, in writing to the society (not exceeding a reasonable length) and requests their notification to the members, the society shall (unless the representations are received by it too late to do so)—

(a)in any notice of the resolution given to members, state the fact of the representations having been made, and

(b)send a copy of the representations to every member to whom notice of the meeting is or has been sent.

(5)if a copy of such representations is not sent out as required by sub-paragraph (4) above because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.

(6)The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of any representations made to it under sub-paragraph (4) above, apply in accordance with sub-paragraph (7) or (8) below to—

(a)the High Court, or

(b)the [F1018appropriate authority] ,

for an order that copies of the representations need not or, as the case may be, shall not be sent out nor the representations read out at the meeting.

(7)An application under this sub-paragraph is an application to the High Court on the ground that the auditor is abusing the rights conferred by sub-paragraph (4) above to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is so abusing those rights it may by order direct that copies of the representations need not be sent out nor the representations read out at the meeting; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor notwithstanding that he is not a party to the application.

(8)An application under this sub-paragraph is an application to the [F1019appropriate authority] on the ground that the sending out of copies of or the reading out at the meeting of the representations would be likely to diminish substantially the confidence in the society of investing members of the public and if the [F1019appropriate authority] is satisfied that the sending out of copies of the representations or the reading of them would have that effect it shall by order direct that copies of the representations shall not be sent out nor the representations read at the meeting.

(9)The building society shall—

(a)if the High Court makes an order under sub-paragraph (7) above or the [F1020appropriate authority] makes an order under sub-paragraph (8) above, send within fourteen days of the decision a statement setting out the effect of the order to the persons mentioned in sub-paragraph (4)(b) above; and

(b)if not, either send a copy of the written representations made under sub-paragraph (4) above to those persons or cause the representations to be read out at the meeting.

[F1021(9A)Sub-paragraphs (9B) and (9C) apply where—

(a)a copy of representations is required to be sent under sub-paragraph (4)(b) or (9)(b); or

(b)a statement is required to be sent under sub-paragraph (9)(a).

(9B)Where a copy of representations or a statement is required to be sent to a member—

(a)it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (9C) are satisfied.

(9C)The conditions of this sub-paragraph are satisfied in the case of a copy of representations or a statement if—

(a)the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the representations or statement in question;

(c)the member is notifiedF1022... of—

(i)the publication of the copy of the representations or the statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the representations or statement may be accessed, and how it may be accessed,

and where the notification concerns the publication of a statement required to be sent by sub-paragraph (9)(a), the member is notified within the period specified in that paragraph; and

(d)the copy of the representations or the statement is published continuously on that web site throughout the period beginning with the date on which notification is given in accordance with paragraph (c) and ending with the conclusion of the meeting.]

(10)If default is made in complying with sub-paragraph (4) or (9) above the building society shall be liable—

(a)on conviction on indictment to a fine; or

(b)on summary confiction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding [F1023one tenth of the statutory maximum] [F1023one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences] for every day during which the offence continues;

and so shall any officer who is also guilty of the offence.

[F1024(10A)Where, in a case in which sub-paragraph (9A)(b) is relied on for compliance with a requirement of sub-paragraph (4) or (9)—

(a)a copy of representations or a statement is published on a web site for a part, but not all, of the period mentioned in sub-paragraph (9C)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under sub-paragraph (10) by reason of that failure.]

Textual Amendments

F1022Words in Sch. 11 para. 4(9C)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 14(2)

Qualification and disqualification of auditorsU.K.

F10255U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

[F1026TenureU.K.

Textual Amendments

F10275AU.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Maximum engagement period: transitional arrangementsU.K.

F10275B]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Removal of auditorsU.K.

6(1)A building society may by resolution in general meeting remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him.U.K.

(2)Where a resolution removing an auditor is passed at a general meeting of a building society, the society shall within 14 days give notice of that fact to the [F1028FCA and, if the society is a PRA-authorised person, the PRA] .

(3)If a building society fails to give the notice required by s ub-paragraph (2) above the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and, in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues and so shall every officer who is also guilty of the offence.

(4)Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages that may be payable to him in respect of the termination of his appointment as auditor.

[F1029(5)An auditor may not be removed from office before the expiration of that auditor's term of office except—

(a)by resolution under this paragraph, or

(b)in accordance with paragraph 6ZA.]

Textual Amendments

Application to court to remove auditor from officeU.K.

[F10306ZA(1)The competent authority may apply to the High Court for an order removing an auditor of a building society from office if the authority considers that there are proper grounds for removing the auditor from office.

(2)The members of a building society may apply to the High Court for an order removing an auditor of the building society from office if the applicant or applicants consider that there are proper grounds for removing the auditor from office.

(3)If the court is satisfied, on hearing an application under sub-paragraph (1), that there are proper grounds for removing the auditor from office, it may make an order removing the auditor from office.

(4)If the court is satisfied, on hearing an application under sub-paragraph (2), that—

(a)the applicants represent in total—

(i)not less than 5% of the voting rights of all the members having a right to vote at a general meeting of the building society, or

(ii)not less than 5% in nominal value of the amount standing to the credit of shares in a building society as shown by the latest balance sheet, and

(b)there are proper grounds for removing the auditor from office,

the court may make an order removing the auditor from office.

(5)For the purposes of this paragraph, divergence of opinions on accounting treatments or audit procedures are not to be taken to be proper grounds for removing an auditor from office.]

Textual Amendments

[F1031Removal of auditor on improper groundsU.K.

Textual Amendments

6A.(1)Where an auditor of a building society is removed from office [F1032, other than by order of the High Court made under paragraph 6ZA,] an application may be made to the High Court under this paragraph.U.K.

(2)The persons who may make such an application are—

(a)any member of the society who was also a member at the time of the removal;

[F1033(b)the FCA; and

(c)if the society is a PRA-authorised person, the PRA.]

(3)If the court is satisfied that the removal was—

(a)on grounds of divergence of opinion on accounting treatments or audit procedures, or

(b)on any other improper grounds,

it may make such order as it thinks fit for giving relief in respect of the removal.

(4)The court may, in particular—

(a)declare that any resolution of the society removing an auditor, or appointing a new auditor in his place, is void;

(b)require the directors of the society to re-appoint the auditor until the next general meeting of the society;

(c)give directions as to the conduct of the society’s affairs in the future.]

Textual Amendments

F1033Sch. 11 para. 6A(2)(b)(c) substituted for Sch. 11 para. 6A(2)(b) (1.4.2013) by The Financial Services Act 2012 (Mutual Societies) Order 2013 (S.I. 2013/496), art. 1(1), Sch. 8 para. 55(5) (with Sch. 12)

Resignation of auditorsU.K.

7(1)An auditor of a building society may resign his office by depositing a notice to that effect at the principal office of the society; and any such notice operates to bring his term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.U.K.

(2)An auditor’s notice of resignation shall not be effective unless it contains either—

(a)a statement to the effect that there are no circumstances connected with his resignation which he considers should be brought to the notice of the members of, or depositors with, the society, or

(b)a statement of any such circumstances as are mentioned above.

(3)Where a notice under this paragraph is deposited at the principal office of a building society it shall within fourteen days send a copy of that notice—

(a)to the [F1034FCA and, if the society is a PRA-authorised person, the PRA] , and

(b)if the notice contains a statement under sub-paragraph (2)(b) above, to every person who under section 76(8) is entitled to receive a copy of the summary financial statement.

(4)The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of a notice containing a statement under sub-paragraph (2)(b), apply in accordance with sub-paragraph (5) or (6) below to—

(a)the High Court; or

(b)the [F1035appropriate authority] ,

for an order that copies of the notice need not or, as the case may be, shall not be sent out.

(5)An application under this sub-paragraph is an application to the High Court on the ground that the auditor is using the notice to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is using the notice for that purpose it may by order direct that copies of it need not be sent out; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

(6)An application under this sub-paragraph is an application to the [F1036appropriate authority] on the ground that the sending out of the notice would be likely to diminish substantially the confidence in the society of investing members of the public; and if the [F1036appropriate authority] is satisfied that the sending out of the notice would be likely to have that effect it shall by order direct that copies of it shall not be sent out.

(7)The building society shall, within fourteen days of the decision of the High Court or of the [F1037appropriate authority] , send to the persons mentioned in sub-paragraph (3)—

(a)if the court makes an order under sub-paragraph (5) above or the [F1037appropriate authority] makes an order under sub-paragraph (6), a statement setting out the effect of the order; and

(b)if not, a copy of the notice containing the statement under sub-paragraph (2)(b).

[F1038(7A)Sub-paragraphs (7B) and (7C) apply where—

(a)the reference to a notice containing a statement under sub-paragraph (2)(b) is required to be sent to a person under sub-paragraph (3)(b) or sub-paragraph (7)(b); or

(b)a statement is required to be sent under sub-paragraph (7)(a).

(7B)Where a notice or a statement is required to be sent to a person, the notice or statement may be sent to him electronically only if—

(a)in a case where a person mentioned in sub-paragraph (3)(b) has notified the society of an electronic address for the purpose of this paragraph, it is sent to that address; or

(b)in a case where no electronic address has been notified for the purpose of this paragraph, it is sent to an electronic address notified by him for the purpose of subsection (8B) of section 76 (electronic address for the reception of summary financial statement for members and depositors).

(7C)The requirement to send a notice or a statement shall also be treated as satisfied if—

(a)the society and a person mentioned in sub-paragraph (3)(b) have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the notice or statement in question;

(c)[F1039the person] is notified of—

(i)the publication of the notice or statement on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the notice or statement may be accessed, and how it may be accessed; and

(d)the notice or statement is published on the web site throughout a period of at least 14 days, beginning with the day on which the person is notified in accordance with paragraph (c).]

(8)If default is made in complying with sub-paragraph (3) or sub-paragraph (7) the building society shall be liable—

(a)on conviction on indictment to a fine; or

(b)on summary conviction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding [F1040one tenth of the statutory maximum ] [F1040one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences] for every day during which the offence continues;

and so shall any officer who is also guilty of the offence.

[F1041(8A)Where, in a case in which sub-paragraph (7C) is relied on for compliance with a requirement under sub-paragraph (3) or (7)—

(a)a notice or a statement is published for a part, but not all, of the period mentioned in sub-paragraph (7C)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under sub-paragraph (8) by reason of that failure.]

Textual Amendments

F1039Words in Sch. 11 para. 7(7C)(c) substituted (18.2.2014) by Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 14(3)

8(1)Where an auditor’s notice of resignation contains a statement under paragraph 7(2)(b) above he may also deposit at the principal office of the society a requisition signed by him calling on the directors of the society forthwith duly to convene a special general meeting of the society for the purpose of receiving and considering such explanation of the circumstances connected with this resignation as he may wish to place before the meeting.U.K.

(2)Where an auditor’s notice of resignation contains such a statement the auditor may request the society to send to its members—

(a)before the general meeting at which his term of office would otherwise expire or expires, as the case may be; or

(b)before any general meeting at which it is proposed to fill the vacancy caused by his resignation,

a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.

(3)The society shall in that case (unless the statement is received by it too late for it to comply)—

(a)in any notice of the meeting given to members state the fact of the statement having been made, and

(b)send a copy of the statement to every member to whom notice of the meeting is or has been sent.

[F1042(3A)Where a copy of a statement is required to be sent to a member under sub-paragraph (3)(b)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (3B) are satisfied.

(3B)The conditions of this sub-paragraph are satisfied in the case of a copy of a statement if—

(a)the society and the member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)that member is notified F1043... of—

(i)the publication of the statement on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the notice may be accessed, and how it may be accessed; and

(d)the statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the conclusion of the meeting.

(3C)Where, in a case in which sub-paragraph (3A)(b) is relied on for compliance with a requirement under sub-paragraph (3)(b)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (3B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

that failure shall not invalidate the proceedings of the meeting.]

(4)If the directors of the society do not within 21 days from the date of the deposit of a requisition under this paragraph proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every director who failed to take all reasonable steps to secure that a meeting was so convened shall be liable—

(a)on conviction on indictment to a fine; or

(b)on summary conviction to a fine not exceeding the statutory maximum.

(5)If a copy of the statement mentioned in sub-paragraph (2) is not sent out as required by sub-paragraph (3) because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting.

(6)Copies of a statement need not be sent out and the statement need not be read out at the meeting if—

(a)on an application made to the High Court by the society or a person aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; or

(b)on an application to the [F1044PRA] by the society or a person aggrieved, the [F1044PRA] is satisfied that the circulating or reading out of the statement would be likely to diminish substantially the confidence in the society of investing members of the public.

(7)If the High Court makes an order under sub-paragraph (6)(a) above it may also order the society’s costs of the application to be paid by the auditor notwithstanding that he is not a party to the application.

(8)An auditor who has resigned his office is entitled to attend any such meeting as is mentioned in sub-paragraph (2)(a) or (b) and to receive all notices of, and other communications relating to, any such meeting which any member of the society is entitled to receive, and to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as former auditor of the society.

Textual Amendments

F1043Words in Sch. 11 para. 8(3B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 14(4)

[F1045Duty of auditor to notify appropriate audit authorityU.K.

Textual Amendments

8A.(1)Where an auditor of a building society ceases for any reason to hold office, he must notify the appropriate audit authority.U.K.

(2)The notice must—

(a)inform the appropriate audit authority that he has ceased to hold office, and

(b)if the auditor resigns, be accompanied by a copy of the auditor’s notice of resignation.

(3)The notice required by this paragraph must also be accompanied by a statement of the reasons for his ceasing to hold office unless—

(a)the auditor resigns, and

(b)the notice of resignation contains a statement under paragraph 7(2)(b).

(4)The auditor must comply with this paragraph—

(a)if the auditor resigns, at the same time as he deposits his notice of resignation at the principal office of the building society;

(b)in any other case, not later than the end of the period of fourteen days beginning with the date on which he ceases to hold office.

(5)A person ceasing to hold office as auditor who fails to comply with this paragraph commits an offence.

(6)If that person is a firm an offence is committed by—

(a)the firm, and

(b)every officer of the firm who is in default.

(7)A person guilty of an offence under this paragraph is liable—

(a)on conviction on indictment, to a fine;

(b)on summary conviction, to a fine not exceeding the statutory maximum.

Duty of building society to notify appropriate audit authorityU.K.

8B.(1)Where an auditor ceases to hold office before the end of his term of office, the building society must notify the appropriate audit authority.U.K.

(2)The notice must—

(a)inform the appropriate audit authority that the auditor has ceased to hold office, and

(b)be accompanied by—

(i)a statement by the society of the reasons for his ceasing to hold office, or

(ii)if the auditor resigns, and his notice of resignation contains a statement under paragraph 7(2)(b), a copy of that statement.

(3)The society must give notice under this paragraph—

(a)if the auditor resigns, not later than the end of the period of fourteen days beginning with the date on which the auditor’s notice of resignation is deposited at the society’s principal office;

(b)in any other case, not later than the end of the period of fourteen days beginning with the date on which the auditor ceases to hold office.

(4)If a building society fails to comply with this paragraph, an offence is committed by—

(a)the society, and

(b)every officer of the society who is in default.

(5)A person guilty of an offence under this paragraph is liable—

(a)on conviction on indictment, to a fine, and

(b)on summary conviction, to a fine not exceeding the statutory maximum.

[F1046Interpretation] U.K.

Textual Amendments

[F10478C. [F1048(1)In this Schedule—U.K.

[F1053(2)For the purposes of this Schedule, a person is auditor of a building society in respect of a financial year if the auditor is required to report on the accounts of the society for that financial year.]]]

Textual Amendments

F1048Sch. 11 para. 8C(1): Sch. 11 para. 8C renumbered as Sch. 11 para. 8C(1) (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(f)(i)

F1050 Section 522 was amended by S.I. 2015/1732.

F1051 Section 523 was amended by section 18 of the Deregulation Act 2015.

F1052A company registered in England and Wales with number 02486368.

F1053Sch. 11 para. 8C(2) inserted (with effect in accordance with reg. 1(4) of the amending S.I.) by The Statutory Auditors and Third Country Auditors Regulations 2017 (S.I. 2017/516), regs. 1(2), 2(6)(f)(ii)

U.K.

9U.K.In the application of this Schedule to Scotland, references to the High Court shall be read as references to the Court of Session.

F1054SCHEDULE 12U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1054Sch. 12 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

F1071SCHEDULE 13U.K.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1071Sch. 13 repealed (1.12.2001) by S.I. 2001/2617 arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

Section 85.

SCHEDULE 14U.K. Settlement of Disputes

Modifications etc. (not altering text)

C176Sch. 14 excluded (temp.) by S.I. 1986/2168, art. 3(1)(4)

Part IU.K. Proceedings in Court

Jurisdiction of the courtU.K.

1(1)No court other than the High Court or, in the case of a building society whose principal office is in Scotland the Court of Session, shall have jurisdiction to hear and determine disputes to which this paragraph applies; and, in this Part of this Schedule, “the court” means the High Court or, as the case may be, the Court of Session.U.K.

(2)This paragraph applies to any dispute—

(a)between a building society and a member of the society in his capacity as a member, or

(b)between a building society and a representative of such a member in that capacity,

in respect of any rights or obligations arising from the rules of the society or any provision of this Act or any statutory instrument under it.

(3)Except in the cases referred to in sub-paragraph (5) below, no disputes to which this paragraph applies may be referred to arbitration.

(4)The court shall not hear and determine any dispute arising out of section 61(8)(a) or [F1093paragraph 20A(10)(a) or 31(4)(a)] of Schedule 2 to this Act.

(5)The court shall not hear and determine any dispute which is required to be referred to arbitration under paragraph 4 below or which is referred to the [F1094FCA] under paragraph 6 or to an adjudicator under paragraph 7 below except as provided in paragraph 2 below.

Textual Amendments

F1093Words in Sch. 14 para. 1(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 64(1); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvii)

2U.K.The court may hear and determine a dispute falling within paragraph 1(5) above in any case where, on the application of any person concerned, it appears to the court—

(a)that application has been made by either party to the dispute to the other party for the purpose of having the dispute settled by arbitration, and

(b)that either arbitrators have not been appointed within 40 days of that application or the arbitrators have refused, or have neglected for a period of 21 days, to proceed with the reference or make an award.

Right of [F1095FCA and PRA] to be heardU.K.

Textual Amendments

3(1)Any person who institutes proceedings in the court in relation to a dispute to which paragraph 1 above applies shall give notice of the fact and of the matter in dispute to the [F1096FCA and, if the society is a PRA-authorised person, the PRA] .U.K.

(2)The court shall not proceed to hear a dispute to which paragraph 1 applies until the court is satisfied that the notice required by sub-paragraph (1) above has been given.

(3)The [F1096FCA and, if the society is a PRA-authorised person, the PRA] shall be entitled, with the leave of the court, to attend and to be heard at any hearing of a dispute to which paragraph 1 applies.

Textual Amendments

Part IIU.K. Arbitration

Circulation of election addresses, resolutions and statementsU.K.

4(1)If the rules of the society so provide, any dispute in respect of a refusal by a building society to send to its members—U.K.

(a)copies of an election address [F1097or a revised election address], in accordance with section 61(7), or

(b)any document required to be sent under [F1098paragraph 20A(1)(b) or 31(1)] of Schedule 2 to this Act,

shall, unless the refusal is on one of the grounds specified in sub-paragraph (2) below, be referred to arbitration.

(2)Those grounds are—

(a)that publicity for the document in question would be likely to diminish substantially the confidence in the society of investing members of the public, or

(b)that the rights conferred by section 61(7) or [F1099paragraph 20A(1)(b) or 31(1)] are being abused to seek needless publicity for defamatory matter.

Textual Amendments

F1097Words in Sch. 14 para. 4(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 64(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvii)

F1098Words in Sch. 14 para. 4(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 64(2)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvii)

F1099Words in Sch. 14 para. 4(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 64(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvii)

F1100[Calling of special meeting]U.K.

Textual Amendments

F1100Sch. 14 para. 4A and cross-heading preceding it inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 64(4); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvii)

[F11014AU.K.If the rules of the society so provide, any dispute in respect of a refusal by a building society to call a special meeting required to be called under paragraph 20A(1)(a) of Schedule 2 to this Act shall be referred to arbitration.]

Textual Amendments

F1101Sch. 14 para. 4A and cross-heading preceding it inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 64(4); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvii)

Procedure on a reference to arbitrationU.K.

5(1)This paragraph has effect in relation to an arbitration under paragraph 4(1) above.U.K.

(2)One or more arbitrators shall be appointed in the manner provided for by the rules of the building society; and so shall another arbitrator if an appointed arbitrator dies or refuses to act.

(3)No arbitrator acting on a reference shall be beneficially interested (whether directly or indirectly) in the funds of the society.

(4)The rules of the society may provide for the procedure to be followed on a reference to arbitration.

(5)An award made by arbitrators, or the majority of them, shall be final and binding.

(6)For the purposes of [F1102Part I of the Arbitration Act 1996] the rules of the society shall be treated as an arbitration agreement.

(7)In relation to Scotland, sub-paragraph (6) above shall be omitted.

Textual Amendments

F1102Words in Sch. 14 Pt. II para. 5(6) substituted (31.1.1997) by 1996 c. 23, s. 107(1), Sch. 3 para. 47 (with s. 81(2)); S.I. 1996/3146, art. 3 (with transitional provisions in art. 4, Sch. 2)

Access to register of membersU.K.

6(1)Any dispute as to the rights of a member of a building society under paragraph 15 of Schedule 2 to this Act shall be referred to the [F1103FCA] .U.K.

(2)The reference of a dispute to the [F1103FCA] under this paragraph shall be treated as a reference to arbitration; and its award shall have the same effect as that of an arbitrator acting in a reference under paragraph 4(1) above.

[F1104(3)The FCA must consult the PRA before making any such award.]

Textual Amendments

Disputes cognizable under a schemeU.K.

F11057U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1105Sch. 14 para. 7 repealed (1.12.2001) by S.I. 2001/2617 arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

GeneralU.K.

8U.K.In this Part of this Schedule, in relation to an arbitration in Scotland, references to an arbitrator shall be read as references to an arbiter.

Section 90.

SCHEDULE 15U.K. Application of Companies Winding Up Legislation to Building Societies

Modifications etc. (not altering text)

C177Sch. 15 applied (with modifications) (7.4.2010) by The Building Societies (Financial Assistance) Order 2010 (S.I. 2010/1188), arts. 1(2), 9

Part IU.K. General Mode of Application

1U.K.The enactments which comprise the companies winding up legislation (referred to in this Schedule as “the enactments”) are the provisions of—

(a)Parts IV, VI, VII [F1106, XII and XIII] of the M41Insolvency Act 1986, or

[F1107(b)Articles 5 to 8 of Part I and Parts V, VII and XI of the Insolvency (Northern Ireland) Order 1989; or]

and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or [F1108Articles 2(6) and 373 of, and Schedule 7 to, the Insolvency (Northern Ireland) Order 1989].

Textual Amendments

F1106Words substituted by Companies Act 1989 (c. 40, SIF 27), s. 211(2)(a) (subject to a saving as referred to in S.I. 1990/1392, art. 4(a))

F1107Sch. 15 para. 1(b) substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(a)(i); S.R. 1991/411, art. 2

F1108Words in Sch. 15 para. 1 substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(a)(ii); S.R. 1991/411, art. 2

Marginal Citations

[F11091A.U.K.In this Schedule—

Textual Amendments

2U.K.Subject to the following provisions of this Schedule, the enactments apply to the winding up of building societies as they apply to the winding up of companies limited by shares and [F1110registered under the Companies Act 2006 in England and Wales or Scotland or (as the case may be) in Northern Ireland.]

Textual Amendments

3(1)The enactments shall, in their application to building societies, have effect with the substitution—U.K.

(a)for “company” of “ building society ” [F1111(except as otherwise specified in paragraphs 33B and 55G below)] ;

(b)for “the registrar of companies” or “the registrar” of “ [F1112Financial Conduct Authority] ”;

(c)for “the articles” of “ the rules ”; and

(d)for “registered office” of “ principal office ”.

(2)In the application of the enactments to building societies—

[F1113(aa)every reference to a company registered in Scotland shall have effect as a reference to a building society whose principal office is situated in Scotland;]

F1114[(aa)every reference to a company registered in Scotland shall have effect as a reference to a building society whose registered office is situated in Scotland;]

[F1115(ab)a reference to the debts of a company includes a reference to sums due to shareholding members of a building society in respect of deposits;]

(a)every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and

F1116[(b)every reference to an administrative receiver shall be omitted.]

Textual Amendments

F1113Sch 15 para. 3(2)(aa) inserted (1.12.2001) by S.I. 2001/3649 arts. 1, 200(1)

F1114Sch. 15 para. 3(2)(aa) inserted (17.8.2001 for specified purposes, 1.12.2001 in so far as not already in force) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 209(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F1116Sch. 15 para. 3(2)(b) substituted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 65; S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xix)

4(1)Where any of the enactments as applied to building societies requires a notice or other document to be sent to the [F1117FCA] , it shall have effect as if it required the [F1117FCA] to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.U.K.

(2)Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.

Textual Amendments

5U.K.Any enactment which specifies a money sum altered by order under section 416 of the M42Insolvency Act 1986, or, as the case may be, [F1118Article 362 of the Insolvency (Northern Ireland) Order 1989], (powers to alter monetary limits) applies with the effect of the alteration.

Textual Amendments

F1118Words in Sch. 15 para. 5 substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(b); S.R. 1991/411, art. 2

Marginal Citations

Part IIU.K. Modified Application of Insolvency Act 1986

Parts IV [F1119, 12 and 13] U.K.

Textual Amendments

PreliminaryU.K.

6U.K.In this Part of this Schedule, Part IV of the Insolvency Act 1986 is referred to as “Part IV”; and that"Act is referred to as “the Act”.

[F11206A.U.K.In the following provisions of the Act a reference to the creditors, general creditors or unsecured creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit—

(a)subsection (1) of section 143 (general functions of liquidator in winding up by the court);

(b)subsection (3) of section 149 (debts due from contributory to company);

(c)subsection (4) of section 168 (supplementary powers (England and Wales));

(d)subsection (2)(b) of section 175 (preferential debts (general provision));

(e)subsection (1) of section 176ZA (payment of expenses of winding up (England and Wales)); F1121...

(f)subsections (3)(b) and (5)(a) of section 176A (share of assets for unsecured creditors);

[F1122(g)subsection (1)(e) of section 391O (direct sanctions orders);

(h)subsection (5) of section 391Q (direct sanctions order: conditions); and

(i)subsection (3)(e) of section 391R (direct sanctions direction instead of order).]]

Textual Amendments

Members of a building society as contributories in winding upU.K.

7(1)Section 74 (liability of members) of the Act is modified as follows.U.K.

(2)In subsection (1), the reference to any past member shall be omitted.

(3)Paragraphs (a) to (d) of subsection (2) shall be omitted; and so shall subsection (3).

[F1123(3A)In paragraph (f) of subsection (2) the reference to a sum due to a member of the company by way of dividends, profits or otherwise does not include a sum due to a shareholding member of a building society in respect of a deposit.]

(4)The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.

Textual Amendments

8U.K.Sections 75 to 78 and 83 in Chapter I of Part IV (miscellaneous provisions not relevant to building societies) do not apply.

9(1)Section 79 (meaning of “contributory”) of the Act does not apply.U.K.

(2)In the enactments as applied to a building society, “contributory”—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up;

but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.

Voluntary winding upU.K.

10(1)Section 84 of the Act does not apply.U.K.

(2)In the enactments as applied to a building society, the expression “resolution for voluntary winding up” means a resolution passed under section 88(1) of this Act.

11U.K.In subsection (1) of section 101 (appointment of liquidation committee) of the Act, the reference to functions conferred on a liquidation committee by or under that Act shall have effect as a reference to its functions by or under that Act as applied to building societies.

12(1)Section 107 (distribution of property) of the Act does not apply; and the following applies in its place.U.K.

(2)Subject to the provisions of Part IV relating to preferential payments, a building society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors F1124. . . pari passu and, subject to that application, in accordance with the rules of the society.

[F1125(3)In sub-paragraph (2) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.]

Textual Amendments

F1124Words in Sch. 15 para. 12(2) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

13U.K.Sections 110 and 111 (liquidator accepting shares, etc. as consideration for sale of company property) of the Act do not apply.

14U.K.Section 116 (saving for certain rights) of the Act shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.

Winding up by the courtU.K.

15U.K.In sections 117 (High Court and county court jurisdiction) and 120 (Court of Session and sheriff court jurisdiction) of the Act, each reference to a company’s share capital paid up or credited as paid up shall have effect as a reference to the amount standing to the credit of shares in a building society as shown by the latest balance sheet.

[F112616(1)Section 122 (circumstances in which company may be wound up by the court) of the Act does not apply in relation to a building society whose principal office is situated in England and Wales.U.K.

(2)Section 122 has effect in relation to a building society whose principal office is situated in Scotland as if subsection (1) were omitted.]

Textual Amendments

F1126Sch. 15 para. 16 substituted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 2

17U.K.Section 124 (application for winding up) of the Act does not apply.

18(1)In section 125 (powers of court on hearing of petition) of the Act, subsection (1) applies with the omission of the words from “but the court” to the end of the subsection.U.K.

(2)The conditions which the court may impose under section 125 of the Act include conditions for securing—

(a)that the building society be dissolved by consent of its members under section 87, or

(b)that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or

(c)that the society transfers its business to a company under section 97,

and may also include conditions for securing that any default which occasioned the petition be made good and that the costs, or in Scotland the expenses, of the proceedings on that petition be defrayed by the person or persons responsible for the default.

19U.K.Section 126 (power of court, between petition and winding up order, to stay or restrain proceedings against company) of the Act has effect with the omission of subsection (2).

20U.K.If, before the presentation of a petition for the winding up by the court of a building society, an instrument of dissolution under section 87 is placed in the society’s public file, section 129(1) (commencement of winding up by the court) of the Act shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.

21(1)Section 130 of the Act (consequences of winding-up order) shall have effect with the following modifications.U.K.

(2)Subsections (1) and (3) shall be omitted.

(3)A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order [F1127to the FCA and, if the society is a PRA-authorised person, the PRA] ; and the [F1128FCA must] keep the notice in the public file of the society.

(4)If a building society fails to comply with sub-paragraph (3) above, it shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and so shall any officer who is also guilty of the offence.

Textual Amendments

22U.K.Section 140 (appointment of liquidator by court in certain circumstances) of the Act does not apply.

23U.K.In the application of sections 141(1) and 142(1) (liquidation committees), of the Act to building societies, the references to functions conferred on a liquidation committee by or under that Act shall have effect as references to its functions by or under that Act as so applied.

[F112923A.U.K.Section 143 (general functions of liquidator in winding up by the court) of the Act has effect as if after subsection (1) there were inserted—

“(1A)Subject to the provisions of Part 4 relating to preferential payments, a building society’s property in the winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society.

(1B)In subsection (1A) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.”]

Textual Amendments

24U.K.The conditions which the court may impose under section 147 (power to stay or sist winding up) of the Act shall include those specified in paragraph 18(2) above.

25U.K.Section 154 (adjustment of rights of contributories) of the Act shall have the effect with the modification that any surplus is to be distributed in accordance with the rules of the society.

F113026U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Winding up: generalU.K.

27U.K.Section 187 (power to make over assets to employees) of the Act does not apply.

28(1)In section 201 (dissolution: voluntary winding up) of the Act, subsection (2) applies without the words from “and on the expiration” to the end of the subsection and, in subsection (3), the word “However” shall be omitted.U.K.

(2)Sections 202 to 204 (early dissolution) of the Act do not apply.

29U.K.In section 205 (dissolution: winding up by the court) of the Act, subsection (2) applies with the omission of the words from “and, subject” to the end of the subsection; and in subsections (3) and (4) references to the Secretary of State shall have effect as references to the [F1131appropriate authority] .

Textual Amendments

Penal provisionsU.K.

30U.K.Sections 216 and 217 of the Act (restriction on re-use of name) do not apply.

31(1)Sections 218 and 219 (prosecution of delinquent officers) of the Act do not apply in relation to offences committed by members of a building society acting in that capacity.U.K.

(2)Sections 218(5) of the Act and subsections (1) and (2) of section 219 of the Act do not apply.

(3)The references in subsections (3) and (4) of section 219 of the Act to the Secretary of State shall have effect as references to the [F1132FCA] ; and the reference in subsection (3) to subsection 218 of the Act shall have effect as a reference to that section as supplemented by paragraph 32 below.

Textual Amendments

32(1)Where a report is made to the prosecuting authority (within the meaning of section 218) under section 218(4) of the Act, in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the [F1133FCA] for further enquiry.U.K.

(2)On such a reference to it the [F1133FCA] shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on the matter.

(3)An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.

Textual Amendments

Preferential debtsU.K.

33U.K.Section 387 (meaning in Schedule 6 of “the relevant date”) of the Act applies with the omission of subsections (2) and (4) to (6).

[F1134Insolvency practitioners: their qualification and regulationU.K.

Textual Amendments

33A.U.K.Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—

“(2)A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.”.

33B.(1)In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies has effect without the modification in paragraph 3(1)(a) above—U.K.

(a)sections 390A and 390B(1) and (3) (authorisation of insolvency practitioners); and

(b)sections 391O(1)(b) and 391R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2)In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 3(1)(a) above.]

[F1135Part IIIU.K. Modified application of Insolvency (Northern Ireland) Order 1989

Textual Amendments

F1135Sch. 15 paras. 34-55E substituted (N.I.) (1.10.1991) for Sch. 15 paras. 34-55 by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(c); S.R. 1991/411, art. 2

Parts V [F1136, 11 and 12] U.K.

Textual Amendments

PreliminaryU.K.

34U.K.In this Part of this Schedule, Part V of the Insolvency (Northern Ireland) Order 1989 is referred to as “Part V”, that Order is referred to as “the Order” and references to “Articles” are references to Articles of that Order.

[F113734A.U.K.In the following provisions a reference to the creditors, general creditors or unsecured creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit—

(a)paragraph (1) of Article 121 (general functions of liquidator in winding up by the High Court);

(b)paragraph (3) of Article 127 (debts due from contributory to company);

(c)paragraph (4) of Article 143 (supplementary powers);

(d)paragraph (2)(b) of Article 149 (preferential debts (general provision));

(e)paragraph (1) of Article 150ZA (payment of expenses of winding up); F1138...

(f)paragraphs (3)(b) and (5)(a) of Article 150A (share of assets for unsecured creditors);

[F1139(g)paragraph (1)(e) of Article 350O (direct sanctions orders);

(h)paragraph (5) of Article 350Q (direct sanctions order: conditions); and

(i)paragraph (3)(e) of Article 350R (direct sanctions direction instead of order).]]

Textual Amendments

Members of a building society as contributories in winding upU.K.

35(1)Article 61 (liability of members) is modified as follows.U.K.

(2)In paragraph (1), the reference to any past member shall be omitted.

(3)Sub-paragraphs (a) to (d) of paragraph (2) shall be omitted; and so shall paragraph (3).

[F1140(3A)In sub-paragraph (f) of paragraph (2) the reference to a sum due to a member of the company by way of dividends, profits or otherwise does not include a sum due to a shareholding member of a building society in respect of a deposit.]

(4)The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.

Textual Amendments

36U.K.Articles 62 to 65 and 69 in Chapter I of Part V (miscellaneous provisions not relevant to building societies) do not apply.

37U.K.In the enactments as applied to a building society, “contributory”—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up;

but does not include persons liable to contribute by virtue of a declaration by the Court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading).

Voluntary winding upU.K.

38(1)Article 70 does not apply.U.K.

(2)In the enactments as applied to a building society, the expression “resolution for voluntary winding up” means a resolution passed under section 88(1) of this Act.

39U.K.In paragraph (1) of Article 87 (appointment of liquidation committee), the reference to functions conferred on a liquidation committee by or under the Order shall have effect as a reference to its functions by or under the Order as applied to building societies.

40(1)Article 93 (distribution of property) does not apply; and the following applies in its place.U.K.

(2)Subject to the provisions of Part V relating to preferential payments, a building society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors (including any liability resulting from the variation to the liquidator’s duty effected by section 28 or 31 of this Act) pari passu and, subject to that application, in accordance with the rules of the society.

[F1141(3)In sub-paragraph (2) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.]

Textual Amendments

41U.K.Articles 96 and 97 (liquidator accepting shares, etc, as consideration for sale of company property) do not apply.

42U.K.Article 101 (saving for certain rights) shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.

Winding up by the High CourtU.K.

43U.K.Article 102 (circumstances in which company may be wound up by the High Court) does not apply.

44U.K.Article 104 (application for winding up) does not apply.

45(1)In Article 105 (powers of High Court on hearing of petition), paragraph (1) applies with the omission of the words from “but the Court” to the end of the paragraph.U.K.

(2)The conditions which the High Court may impose under Article 105 include conditions for securing—

(a)that the building society be dissolved by consent of its members under section 87, or

(b)that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or

(c)that the society transfers its business to a company under section 97,

and may also include conditions for securing that any default which occasioned the petition be made good and that the costs of the proceedings on that petition be defrayed by the person or persons responsible for the default.

46U.K.Article 106 (power of High Court, between petition and winding-up order, to stay or restrain proceedings against company) has effect with the omission of paragraph (2).

47U.K.If, before the presentation of a petition for the winding up by the High Court of a building society, an instrument of dissolution under section 87 is placed in the society’s public file, Article 109(1) (commencement of winding up by the High Court) shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.

48(1)Article 110 (consequences of winding-up order) shall have effect with the following modifications.U.K.

(2)Paragraphs (1) and (3) shall be omitted.

(3)A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order [F1142to the FCA and, if the society is a PRA-authorised person, the PRA] ; and [F1143the FCA must] keep the notice in the public file of the society.

(4)If a building society fails to comply with sub-paragraph (3) above, it shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and so shall any officer who is also guilty of the offence.

Textual Amendments

49U.K.Article 119 (appointment of liquidator by High Court in certain circumstances) does not apply.

50U.K.In the application of Article 120(1) (liquidation committee) to building societies, the references to functions conferred on a liquidation committee by or under the Order shall have effect as references to its function by or under the Order as so applied.

[F114450A.U.K.Article 121 (general functions of liquidator in winding up by the High Court) of the Order has effect as if after paragraph (1) there were inserted—

“(1A)Subject to the provisions of Part V relating to preferential payments, a building society’s property in the winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society.

(1B)In paragraph (1A) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.”]

Textual Amendments

51U.K.The conditions which the High Court may impose under Article 125 (power to stay winding up) shall include those specified in paragraph 45(2) above.

52U.K.Article 132 (adjustment of rights of contributories) shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.

F114553U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Winding up: generalU.K.

54U.K.Article 158 (power to make over assets to employees) does not apply.

55(1)In Article 166 (dissolution: voluntary winding up), paragraph (2) applies without the words from “and on the expiration” to the end of the paragraph and, in paragraph (3), the word “However” shall be omitted.U.K.

(2)Articles 167 and 168 (early dissolution) do not apply.

55AU.K.In Article 169 (dissolution: winding up by the High Court) paragraph (1) applies with the omission of the words from “and, subject” to the end of the paragraph; and in paragraphs (2) and (3) references to the Department shall have effect as references to the [F1146appropriate authority] .

Textual Amendments

Penal provisionsU.K.

55BU.K.Articles 180 and 181 (restriction on re-use of name) do not apply.

55C(1)Articles 182 and 183 (prosecution of delinquent officers) do not apply in relation to offences committed by members of a building society acting in that capacity.U.K.

(2)Article 182(4) and paragraphs (1) and (2) of Article 183 do not apply.

(3)The references in paragraphs (3) and (5) of Article 183 to the Department shall have effect as references to the [F1147FCA] ; and the reference in paragraph (3) to Article 182 shall have effect as a reference to that Article as supplemented by paragraph 55D below.

Textual Amendments

55D(1)Where a report is made to the prosecuting authority (within the meaning of Article 182) under Article 182(3), in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the [F1148FCA] for further enquiry.U.K.

(2)On such a reference to it the [F1148FCA] shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on the matter.

(3)An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.

Textual Amendments

Preferential debtsU.K.

55EU.K.Article 347 (meaning in Schedule 4 of “the relevant date”) applies with the omission of paragraphs (2) and (4) to (6).]

[F1149Insolvency practitioners: their qualification and regulationU.K.

Textual Amendments

55F.U.K.Article 349 (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—

“(2)A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.”.

55G.(1)In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies has effect without the modification in paragraph 3(1)(a) above—U.K.

(a)Articles 349A and 349B(1) and (3) (authorisation of insolvency practitioners); and

(b)Articles 350O(1)(b) and 350R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2)In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) the reference to a company has effect without the modification in paragraph 3(1)(a) above.]

Part IVU.K. Dissolution of Building Society wound up (England and Wales, Scotland and Northern Ireland)

56(1)Where a building society has been wound up voluntarily, it is dissolved as from 3 months from the date of the placing in the public file of the society of the return of the final meetings of the society and its creditors made by the liquidator under—U.K.

(a)section 94 or (as the case may be) 106 of the M43Insolvency Act 1986 (as applied to building societies), or on such other date as is determined in accordance with section 201 of that Act, or

(b)Article [F115080 or (as the case may be) 92 of the Insolvency (Northern Ireland) Order 1989](as so applied), or on such other date as is determined in accordance with that Article,

as the case may be.

(2)Where a building society has been wound up by the court, it is dissolved as from 3 months from the date of the placing in the public file of the society of—

(a)the liquidator’s notice under section 172(8) of the M44Insolvency Act 1986 (as applied to building societies) [F1151or, as the case may be, Article 146(7) of the Insolvency (Northern Ireland) Order 1989 (as applied to building societies)], or

(b)the notice of the completion of the winding up from the official receiver or the [F1152official receiver for Northern Ireland],

or on such other date as is determined in accordance with section 205 of that Act [F1153or Article 169 of that Order], as the case may be.

Textual Amendments

F1150Words in Sch. 15 para. 56(1)(b) substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(d)(i); S.R. 1991/411, art. 2

F1151Words in Sch. 15 para. 56(2)(a) inserted (N.I.) (1.10.191) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(d)(ii); S.R. 1991/411, art. 2

F1152Words in Sch. 15 para. 56(2)(b) substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(d)(iii); S.R. 1991/411, art. 2

F1153Words in Sch. 15 para. 56(2) inserted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(d)(iv); S.R. 1991/411, art. 2

Marginal Citations

57[F1154(1)Sections 1012 to 1023 and 1034 of the Companies Act 2006 (property of dissolved company) apply in relation to the property of a dissolved building society (whether dissolved under section 87 or following its winding up) as they apply in relation to the property of a dissolved company.]U.K.

(2)Paragraph 3(1) above shall apply to those sections for the purpose of their application to building societies.

[F1155(3)Any reference in those sections to restoration to the register shall be read as a reference to the effect of an order under section 91 of this Act.]

Textual Amendments

Insolvency rules and fees: England and Wales and ScotlandU.K.

58(1)Rules may be made under section 411 of the Insolvency Act for the purpose of giving effect, in relation to building societies, to the provisions of the applicable winding up legislation.U.K.

(2)An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the applicable winding up legislation and the performance by the official receiver or the Secretary of State of functions under it.

Insolvency rules and fees: Northern IrelandU.K.

59(1)Rules may be made under [F1156Article 359 of the Insolvency (Northern Ireland) Order 1989] for the purpose of giving effect in relation to building societies, to the provisions of the applicable winding up legislation.U.K.

[F1157(2)An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the applicable winding-up legislation and the performance by the official receiver for Northern Ireland or that Department of functions under it.]

Textual Amendments

F1156Words in Sch. 15 para. 59(1) substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(e)(i); S.R. 1991/411, art. 2

F1157Sch. 15 para. 59(2) substituted (N.I.) (1.10.1991) by S.I. 1989/2405 (N.I. 19), arts. 2(1), 381, Sch. 9 Pt. II para. 45(e)(ii); S.R. 1991/411, art. 2

[F1158SCHEDULE 15AU.K. Application of other companies insolvency legislation to building societies

Textual Amendments

F1158Sch. 15A inserted (1.12.1997) by 1997 c. 32, s. 39(2), Sch. 6; S.I. 1997/2668, art. 2, Sch. Pt. I(i)

Modifications etc. (not altering text)

C178Sch. 15A amendment to earlier affecting provision SI 2010/1188 art. 11 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), art. 1(1)(2), 5(3)

Part IU.K. General mode of application

1(1)Subject to the provisions of this Schedule, the enactments specified in sub-paragraph (2) below (referred to in this Schedule as “the enactments”) apply in relation to building societies as they apply in relation to companies limited by shares and [F1159registered under the Companies Act 2006 in England and Wales or Scotland or (as the case may be) in Northern Ireland.] U.K.

(2)The enactments referred to in sub-paragraph (1) above are—

(a)Parts I [F1160(except section 1A)] [F1161, II, [F1162and 3, section 176ZB (in Part 4), and]] VI, VII, XII and XIII, section 434 and Part XVIII of the M45Insolvency Act 1986, or

(b)[F1163Part I, Part II (except Article 14A), Parts III,] IV, VII, XI and XII and Article 378 of the M46Insolvency (Northern Ireland) Order 1989,

and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the M47Insolvency Act 1986 or Article 2(6) and 373 of, and Schedule 7 to, the M48Insolvency (Northern Ireland) Order 1989.

Textual Amendments

F1160Words in Sch. 15A para. 1(2)(a) inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 14(2); S.I. 2002/2711, art. 2 (subject to arts. 3-5)

F1161Words in Sch. 15A para. 1(2)(a) substituted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(2)(a)

F1163Words in Sch. 15A para. 1(2)(b) substituted (2.2.2004) by The Insolvency (Northern Ireland) Order 2002 (S.I. 2002/3152), art. 1(3), Sch. 2 para. 14(2); S.R. 2003/545, art. 2 (subject to S.R. 2003/546, arts. 2-7)

Marginal Citations

2(1)The enactments shall, in their application to building societies, have effect with the substitution—U.K.

[F1164(aa)every reference to a company registered in Scotland shall have effect as a reference to a building society whose principal office is situated in Scotland;]

[F1165(aa)every reference to a company registered in Scotland shall have effect as a reference to a building society whose registered office is situated in Scotland;]

(a)for “company” of “ building society ” [F1166(except as otherwise specified in paragraphs 27H and 54 below)] ;

(b)for “the registrar of companies” or “the registrar” of “ [F1167Financial Conduct Authority] ”;

(c)for “the articles” of “ the rules ”; and

(d)for “registered office” of “ principal office ”.

(2)In the application of the enactments to building societies—

(a)every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and

(b)every reference to an administrative receiver [F1168, other than a reference in section 29(2), 72A or 251 of the Insolvency Act 1986 or in Article 5(1) or 59A of the Insolvency (Northern Ireland) Order 1989,] shall be omitted.

Textual Amendments

F1164Sch. 15A para. 2(2)(aa) inserted (1.12.2001) by S.I. 2001/3649 arts. 1, 200(2)

F1165Sch. 15A para. 2(2)(aa) inserted (17.8.2001 for certain purposes, 1.12.2001 in so far as not already in force) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F1168Words in Sch. 15A para. 2(2)(b) inserted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(2)(b)

3(1)Where any of the enactments as applied to building societies requires a notice or other document to be sent to the [F1169FCA] , it shall have effect as if it required the [F1169FCA] to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.U.K.

(2)Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.

[F1170(3)Any reference in any of the enactments, as so applied, to the register shall have effect as a reference to the public file.]

Textual Amendments

F1170Sch. 15A para. 3(3) inserted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(2)(c)

4(1)Rules may be made under section 411 of the M49Insolvency Act 1986 or, as the case may be, Article 359 of the M50Insolvency (Northern Ireland) Order 1989 for the purpose of giving effect, in relation to building societies, to the provisions of the enactments.U.K.

(2)An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the enactments and the performance by the official receiver or the Secretary of State of functions under them.

(3)An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the enactments and the performance by the official receiver or that Department of functions under them.

Marginal Citations

5U.K.Any enactment which specifies a money sum altered by order under section 416 of the Insolvency Act 1986, or, as the case may be, Article 362 of the Insolvency (Northern Ireland) Order 1989, (powers to alter monetary limits) applies with the effect of the alteration.

[5AU.K.In this Schedule—

Modifications etc. (not altering text)

C181Sch. 15A para. 5A substituted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(2)(d)

Part IIU.K. Modified Application of [F1171Parts I to III] [F1172and 13] of Insolvency Act 1986

Textual Amendments

F1171Words in Sch. 15A Pt. II heading substituted (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(a)

PreliminaryU.K.

6U.K.In this Part of this Schedule, the M51Insolvency Act 1986 is referred to as “the Act”.

Marginal Citations

Voluntary arrangementsU.K.

7U.K.Section 1 of the Act (proposals for voluntary arrangements) has effect as if—

(a)it required any proposal under Part I of the Act to be so framed as to enable a building society to comply with the requirements of this Act; and

(b)any reference to debts included a reference to liabilities owed to the holders of shares in a building society.

8U.K.In section 2 (procedure where nominee is not liquidator or administrator) and section 3 (summoning of meetings) of the Act as applied to a building society, any reference to a meeting of the society is a reference to—

(a)a meeting of both shareholding and borrowing members of the society; and

(b)a meeting of shareholding members alone.

[F1173and subsection (1) of section 2 shall have effect with the omission of the words from “and the directors” to the end.]

Textual Amendments

F1173Words in Sch. 15A para. 8 inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 14(3); S.I. 2002/2711, art. 2 (subject to arts. 3-5)

[F11748AU.K.In subsection (2) of section 4A of the Act (approval of arrangement) as applied to a building society, paragraph (b) and the word “or” immediately preceding that paragraph are omitted.]

Textual Amendments

F1174Sch. 15A para. 8A inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 14(3); S.I. 2002/2711, art. 2 (subject to arts. 3-5)

9U.K.In section 6 of the Act (challenge of decisions) as applied to a building society, “contributory”—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up;

but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.

[F11759AU.K.In section 7A of the Act (prosecution of delinquent officers) as applied to a building society—

(a)in subsection (2), for paragraphs (i) and (ii) there is substituted “ the [F1176FCA] ”,

(b)subsections (3) to (7) are omitted,

(c)in subsection (8), for “Secretary of State” there is substituted “ [F1176FCA] ”.]

Textual Amendments

F1175 Sch. 15A para. 9A inserted (1.1.2003) by 2000 c. 39, s. 2, Sch. 2 Pt. II para. 14(4); S.I. 2002/2711, art. 2 (subject to arts. 3-5)

Administration ordersU.K.

10(1)Section 8 of the Act (power of court to make administration order) has effect as if it included provision that, where—U.K.

(a)an application for an administration order to be made in relation to a building society is made by the [F1177FCA or the PRA] (with or without other parties); and

(b)the society has defaulted in an obligation to pay any sum due and payable in respect of any deposit or share,

the society shall be deemed for the purposes of subsection (1) to be unable to pay its debts.

(2)In subsection (3) of that section, paragraph (c) and, in subsection (4) of that section, the words from “nor where” to the end are omitted.

Textual Amendments

11(1)Subsection (1) of section 9 of the Act (application for administration order) as applied to a building society has effect as if—U.K.

(a)it enabled an application to the court for an administration order to be by petition presented, with or without other parties, by the [F1178FCA or the PRA] or by a shareholding member entitled under section 89(3) of this Act to petition for the winding up of the society; and

(b)the words from “or by the clerk” to “on companies)” were omitted.

(2)In subsection (2)(a) of that section as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the Commission (unless it is a petitioner).

(3)Subsection (3) of that section, and in subsection (4) of that section, the words “Subject to subsection (3),” are omitted.

Textual Amendments

12U.K.In section 10 of the Act (effect of application for administration order), the following are omitted, namely—

(a)in subsection (2), paragraphs (b) and (c); and

(b)subsection (3).

13U.K.In section 11 of the Act (effect of administration order), the following are omitted, namely—

(a)in subsection (1), paragraph (b) and the word “and” immediately preceding that paragraph;

(b)in subsection (3), paragraph (b);

(c)in subsection (4), the words “an administrative receiver of the company has vacated office under subsection (1)(b), or”; and

(d)subsection (5).

14U.K.In subsection (1) of section 12 of the Act (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.

15U.K.Subsection (3) of section 13 of the Act (appointment of administrator) has effect as if it enabled an application for an order under subsection (2) of that section to be made by the [F1179FCA or the PRA] .

Textual Amendments

16(1)Subject to sub-paragraph (2) below, section 14 of the Act (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that section—U.K.

(a)to ensure compliance with the provisions of this Act; and

(b)not to appoint to be a director any person who is not a fit and proper person to hold that position.

(2)Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act F1180. . ..

(3)In subsection (4) of that section as applied to a building society, the reference to any power conferred by the Act or [F1181the Companies Acts] or by [F1182the company’s articles] is a reference to any power conferred by this Act or by the society’s memorandum or rules.

F1183(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1180Words in Sch. 15 para. 16(2) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F1183Sch. 15A para. 16(4) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

17(1)Subject to sub-paragraph (3) below, paragraph 16 of Schedule 1 to the Act (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society.U.K.

(2)No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act.

(3)No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the court, or by meetings summoned under section 23(1) or 25(2) of the Act (as modified by paragraph 21 or 23 below).

F118418U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

19(1)Section 17 of the Act (general duties of administrator) has effect as if, instead of the requirement imposed by subsection (3), it required the administrator of a building society to summon a meeting of the society’s creditors if—U.K.

(a)he is requested, in accordance with the rules, to do so by 500 of the society’s creditors, or by one-tenth, in number or value, of those creditors, or

(b)he is directed to do so by the court.

(2)That section also has effect as if it required the administrator of a building society to summon a meeting of the society’s shareholding members if—

(a)he is requested, in accordance with the rules, to do so by 500 of the society’s shareholding members, or by one-tenth, in number, of those members, or

(b)he is directed to do so by the court.

F118520U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

21(1)Subsection (1) of section 23 of the Act (statement of proposals) as applied to a building society has effect as if—U.K.

(a)the reference to the [F1186Financial Conduct Authority] included a reference to the [F1187scheme manager];

(b)the reference to all creditors included a reference to all holders of shares in the society; and

(c)the reference to a meeting of the society’s creditors included a reference to a meeting of holders of shares in the society.

(2)In subsection (2) of that section as so applied, references to members of the society do not include references to holders of shares in the society.

Textual Amendments

F1187Words in Sch. 15A para. 21(1)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(h)(i)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

22U.K.Section 24 of the Act (consideration of proposals by creditors’ meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.

23(1)Section 25 of the Act (approval of substantial revisions) as applied to a building society has effect as if—U.K.

(a)subsection (2) required the administrator to send a statement in the prescribed form of his proposed revisions to the [F1188[F1189FCA, to the PRA] and to the scheme manager]; and

(b)the reference in that subsection to a meeting of creditors included a reference to a meeting of holders of shares in the society.

(2)In subsection (3) of that section as so applied, references to members of the society do not include references to holders of shares in the society.

Textual Amendments

F1188Words in Sch. 15A para. 23(1)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

24U.K.Subsection (1) of section 27 of the Act (protection of interests of creditors and members) has effect—

(a)as if it enabled the [F1190[F1191FCA, the PRA] or the scheme manager] to apply to the court by petition for an order under that section; and

(b)in relation to an application by the [F1192[F1191FCA, the PRA] or the scheme manager], as if the words “(including at least himself)” were omitted.

Textual Amendments

F1190Words in Sch. 15A para. 24(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(j) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F1192Words in Sch. 15A para. 24(b) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(k) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Receivers and managersU.K.

25U.K.In section 38 of the Act (receivership accounts), “prescribed” means prescribed by regulations made by statutory instrument by the [F1193Treasury].

Textual Amendments

F1193Word in Sch. 15A para. 25 substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(l) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C182Sch. 15A para. 25: Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617 arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/2617, art. 2

26U.K.In subsection (1) of section 39 of the Act (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.

[F119427U.K.Subsection (3) of section 40 of the Act (payment of debts out of assets subject to floating charge), as applied to a building society, has effect as if the reference to general creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

27A.U.K.Sections 42 to 49 of the Act (administrative receivers) are omitted.

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

27B.U.K.Subsection (1) of section 51 of the Act (power to appoint receiver), as applied to a building society, has effect as if for the words “an incorporated company (whether a company registered under the Companies Act 2006 or not)” there were substituted “a building society”.

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

27C.U.K.Subsection (3) of section 59 of the Act (priority of debts), as applied to a building society, has effect as if the reference to ordinary creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

27D.U.K.Subsection (1) of section 67 of the Act (report by receiver), as applied to a building society, has effect as if—

(a)the reference to the Financial Conduct Authority included a reference to the scheme manager; and

(b)in paragraph (d) the reference to other creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

27E.U.K.Subsection (1) of section 70 of the Act (interpretation for Chapter 2), as applied to a building society, has effect as if—

(a)in the definition of “company” for the words “an incorporated company (whether or not a company registered under the Companies Act 2006)” there were substituted “a building society”; and

(b)the definition of “the register” were omitted.

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

27F.U.K.Chapter 4 of Part 3 of the Act (prohibition of appointment of administrative receiver), as applied to a building society, has effect as if—

(a)in section 72A (floating charge holder not to appoint administrative receiver)—

(i)in subsections (1) and (2) the word “qualifying” and in subsection (3) the definition of “holder of a qualifying floating charge in respect of a company’s property” were omitted; and

(ii)subsections (4)(a), (5) and (6) were omitted; and

(b)sections 72B to 72H (exceptions to prohibition) were omitted.]

Textual Amendments

F1194Sch. 15A paras. 27-27F substituted for Sch. 15A para. 27 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(3)(b)

[F1195Insolvency practitioners: their qualification and regulationU.K.

Textual Amendments

27G.U.K.Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—

“(2)A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.”.

27H.(1)In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 2(1)(a) above—U.K.

(a)sections 390A and 390B(1) and (3) (authorisation of insolvency practitioners); and

(b)sections 391O(1)(b) and 391R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2)In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 2(1)(a) above.

27I.U.K.In sections 391O, 391Q and 391R of the Act a reference to the creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit.]

Part IIIU.K. Modified Application of Parts II, III [F1196, 4 and 12] of Insolvency (Northern Ireland) Order 1989

Textual Amendments

PreliminaryU.K.

28U.K.In this Part of this Schedule, the M52Insolvency (Northern Ireland) Order 1989 is referred to as “the Order”.

Marginal Citations

Voluntary arrangementsU.K.

29U.K.Article 14 of the Order (proposals for voluntary arrangements) has effect as if—

(a)it required any proposal under Part II of the Order to be so framed as to enable a building society to comply with the requirements of this Act; and

(b)any reference to debts included a reference to liabilities owed to the holders of shares in a building society.

30U.K.In Article 15 (procedure where nominee is not liquidator or administrator) and Article 16 (summoning of meetings) of the Order as applied to a building society, any reference to meetings of the society is a reference to—

(a)a meeting of both shareholding and borrowing members of the society; and

(b)a meeting of shareholding members alone.

[F1197and paragraph (1) of Article 15 shall have effect with the omission of the words from “and the directors” to the end.]

Textual Amendments

F1197Words in Sch. 15A para. 30 inserted (NI) (2.2.2004) by The Insolvency (Northern Ireland) Order 2002 (S.I. 2002/3152), art. 1(3), Sch. 2 para. 14(3); S.R. 2003/545, art. 2 (subject to S.R. 2003/546, arts. 2-7)

[F119830AN.I.In paragraph (2) of Article 17A of the Order (approval of arrangement) as applied to a building society, sub-paragraph (b) and the word “or” immediately preceding that sub-paragraph are omitted.]

Textual Amendments

31U.K.In Article 19 of the Order (challenge of decisions) as applied to a building society, “contributory”—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up;

but does not include persons liable to contribute by virtue of a declaration by the High Court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading) of the Order.

[F119931AN.I.In Article 20A of the Order (prosecution of delinquent officers) as applied to a building society—

(a)in paragraph (2) for the words “the Department”, in each place where they occur, there are substituted the words “ [F1200each of the Financial Conduct Authority and the Prudential Regulation Authority] ”,

(b)paragraphs (3) to (7) are omitted,

(c)in paragraph (8)—

(i)after the words “Northern Ireland” there are inserted the words “or the [F1201Financial Conduct Authority or the Prudential Regulation Authority] ”, and

(ii)after the words “Northern Ireland” and the words “the Director”, in the second place where they occur, there are inserted the words “or the [F1201Financial Conduct Authority or the Prudential Regulation Authority] ”,

(d)in paragraph (9) after the words “for Northern Ireland” there are inserted the words “or the [F1201Financial Conduct Authority or the Prudential Regulation Authority] ”.]

Textual Amendments

Administration ordersU.K.

32(1)Article 21 of the Order (power of High Court to make administration order) has effect as if it included provision that, where—U.K.

(a)an application for an administration order to be made in relation to a building society is made by the [F1202FCA or the PRA] (with or without other parties); and

(b)the society has defaulted in an obligation to pay any sum due and payable in respect of any deposit or share,

the society shall be deemed for the purposes of paragraph (1) to be unable to pay its debts.

(2)In paragraph (3) of that Article, sub-paragraph (c) and, in paragraph (4) of that Article, the words from “nor where” to the end are omitted.

Textual Amendments

33(1)Paragraph (1) of Article 22 of the Order (application for administration order) as applied to a building society has effect as if—U.K.

(a)it enabled an application to the High Court for an administration order to be by petition presented, with or without other parties, by the [F1203FCA, by the PRA] or by a shareholding member entitled under section 89(3) of this Act to petition for the winding up of the society; and

(b)the words from “or by the chief clerk” to “on companies)”, in the second place where they occur, were omitted.

(2)In paragraph (2)(a) of that Article as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the [F1204FCA or, as the case may be, the PRA] (unless it is a petitioner).

(3)Paragraph (3) of that Article, and in paragraph (4) of that Article, the words “Subject to paragraph (3),” are omitted.

Textual Amendments

34U.K.In Article 23 of the Order (effect of application for administration order), the following are omitted, namely—

(a)in paragraph (2), sub-paragraphs (b) and (c); and

(b)paragraph (3).

35U.K.In Article 24 of the Order (effect of administration order), the following are omitted, namely—

(a)in paragraph (1), sub-paragraph (b) and the word “and” immediately preceding that sub-paragraph;

(b)in paragraph (3), sub-paragraph (b);

(c)in paragraph (4), the words “an administrative receiver of the company has vacated office under paragraph (1)(b), or”; and

(d)paragraph (5).

36U.K.In paragraph (1) of Article 25 of the Order (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.

37U.K.Paragraph (3) of Article 26 of the Order (appointment of administrator) has effect as if it enabled an application for an order under paragraph (2) of that Article to be made by [F1205the FCA and the PRA] .

Textual Amendments

38(1)Subject to sub-paragraph (2) below, Article 27 of the Order (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that Article—U.K.

(a)to ensure compliance with the provisions of this Act; and

(b)not to appoint to be a director any person who is not a fit and proper person to hold that position.

(2)Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act F1206. . ..

(3)In paragraph (4) of that Article as applied to a building society, the reference to any power conferred by the Order or [F1207the Companies Acts] or by [F1208the company’s articles] is a reference to any power conferred by this Act or by the society’s memorandum or rules.

F1209(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1206Words in Sch. 15A para. 38(2) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F1209Sch. 15A para. 38(4) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(b), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

39(1)Subject to sub-paragraph (3) below, paragraph 17 of Schedule 1 to the Order (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society.U.K.

(2)No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act.

(3)No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the High Court, or by meetings summoned under Article 35(1) or 37(2) of the Order (as modified by paragraph 43 or 45 below).

F121040U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

41(1)Article 29 of the Order (general duties of administrator) has effect as if, instead of the requirement imposed by paragraph (3), it required the administrator of a building society to summon a meeting of the society’s creditors if—U.K.

(a)he is requested, in accordance with the rules, to do so by 500 of the society’s creditors, or by one-tenth, in number or value, of those creditors, or

(b)he is directed to do so by the High Court.

(2)That Article also has effect as if it required the administrator of a building society to summon a meeting of the society’s shareholding members if—

(a)he is requested, in accordance with the rules, to do so by 500 of the society’s shareholding members, or by one-tenth, in number, of those members, or

(b)he is directed to do so by the High Court.

F121142U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

43(1)Paragraph (1) of Article 35 of the Order (statement of proposals) as applied to a building society has effect as if—U.K.

(a)the reference to the [F1212Financial Conduct Authority] included a reference to the [F1213scheme manager];

(b)the reference to all creditors included a reference to all holders of shares in the society; and

(c)the reference to a meeting of the society’s creditors included a reference to a meeting of holders of shares in the society.

(2)In paragraph (2) of that Article as so applied, references to members of the society do not include references to holders of shares in the society.

Textual Amendments

F1213Words in Sch. 15A para. 43(1)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(p)(i)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

44U.K.Article 36 of the Order (consideration of proposals by creditors’ meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.

45(1)Article 37 of the Order (approval of substantial revisions) as applied to a building society has effect as if—U.K.

(a)paragraph (2) required the administrator to send a statement in the prescribed form of his proposed revisions to the [F1214[F1215FCA, to the PRA] and to the scheme manager]; and

(b)the reference in that paragraph to a meeting of creditors included a reference to a meeting of holders of shares in the society.

(2)In paragraph (3) of that Article as so applied, references to members of the society do not include references to holders of shares in the society.

Textual Amendments

F1214Words in Sch. 15A para. 45(1)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(q) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

46U.K.Paragraph (1) of Article 39 of the Order (protection of interests of creditors and members) has effect—

(a)as if it enabled the [F1216[F1217FCA, the PRA] or the scheme manager] to apply to the High Court by petition for an order under that section; and

(b)in relation to an application by the [F1218[F1217FCA, the PRA] or the scheme manager], as if the words “(including at least himself)” were omitted.

Textual Amendments

F1216Words in Sch. 15A para. 46(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(r) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F1218Words in Sch. 15A para. 46(b) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(s) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Receivers and managersU.K.

47U.K.In Article 48 of the Order (receivership accounts), “prescribed” means prescribed by regulations made by statutory instrument by the [F1219Treasury].

Textual Amendments

F1219Word in Sch. 15A para. 47 substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 210(t) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C183Sch. 15A para. 47: Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617 arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

48U.K.In paragraph (1) of Article 49 of the Order (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.

[F122049U.K.Paragraph (3) of Article 50 of the Order (payment of debts out of assets subject to floating charge), as applied to a building society, has effect as if the reference to general creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

Textual Amendments

F1220Sch. 15A paras. 49-52 substituted for Sch. 15A para. 49 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(4)

50.U.K.Articles 52 to 59 of the Order (administrative receivers) are omitted.

Textual Amendments

F1220Sch. 15A paras. 49-52 substituted for Sch. 15A para. 49 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(4)

51.U.K.Article 59A of the Order (floating charge holder not to appoint administrative receiver), as applied to a building society, has effect as if—

(a)in paragraph (1) the word “qualifying” were omitted; and

(b)paragraphs (2), (3)(a), (4) and (5) were omitted.

Textual Amendments

F1220Sch. 15A paras. 49-52 substituted for Sch. 15A para. 49 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(4)

52.U.K.Articles 59B to 59J of the Order (exceptions to prohibition) are omitted.]]

Textual Amendments

F1220Sch. 15A paras. 49-52 substituted for Sch. 15A para. 49 (with application in accordance with art. 1(4) of the amending S.I.) by The Building Societies (Floating Charges and Other Provisions) Order 2016 (S.I. 2016/679), arts. 1(1), 4(4)

[F1221Insolvency practitioners: their qualification and regulationU.K.

Textual Amendments

53.U.K.Article 349 of the Order (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—

“(2)A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.”.

54.(1)In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 2(1)(a) above—U.K.

(a)Articles 349A and 349B(1) and (3) (authorisation of insolvency practitioners); and

(b)Articles 350O(1)(b) and 350R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2)In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) of the Order the reference to a company has effect without the modification in paragraph 2(1)(a) above.

55.U.K.In Articles 350O, 350Q and 350R of the Order a reference to the creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit.]

Sections 93, 94 and 95.

SCHEDULE 16U.K. Mergers: Supplementary Provisions

Modifications etc. (not altering text)

C184Sch. 16 excluded by S.I. 1986/2168, art. 9(2)(b)(3)

Part IU.K. Issue of Statements to Members

1(1)A building society which desires—U.K.

(a)to amalgamate with one or more other building societies, or

(b)to transfer its engagements to another building society, or

(c)to undertake to fulfil the engagements of another building society,

shall, unless the [F1222appropriate authority] , in the case of a society desirous of undertaking to fulfil another’s engagements, has consented under section 94(5) to its proceeding by resolution of the board of directors, send to every member entitled to notice of a meeting of the society a statement concerning the matters specified in sub-paragraph (4) below.

(2)A building society shall include the statement referred to in sub-paragraph (1) above in or with the notice to be sent to its members of the meeting of the society at which the resolutions require for the approval of the amalgamation or, as the case may be, the transfer are to be moved.

[F1223(2A)Where a statement is required to be sent to a member in or with the notice of the meeting under sub-paragraph (2)—

(a)in a case where notice of the meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the statement may be sent to him electronically only if it is sent to the same electronic address, and at the same time, as the notice;

(b)in a case where notice of the meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

(2B)The conditions of this sub-paragraph are satisfied in the case of a statement if—

(a)the society and that member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement in question;

(c)at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—

(i)the publication of the statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the statement may be accessed, and how it may be accessed; and

(d)the statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the [F1222appropriate authority] whether to confirm the amalgamation or transfer of engagements pursuant to section 95.

(2C)Where, in a case in which sub-paragraph (2A)(b) above is relied on for compliance with a requirement under sub-paragraph (2)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

that failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 95(4)(c).]

(3)No statement shall be sent unless its contents, so far as they concern the matters specified in sub-paragraph (4) below, have been approved by the [F1222appropriate authority] .

(4)Those maters are the following, namely—

(a)the financial position of the building society and that of the other building society or societies participating in the amalgamation or transfer;

(b)the interest of the directors of the building society in the amalgamation or transfer of engagements;

(c)the compensation or other consideration (if any) proposed to be paid to or in respect of the directors or other officers of the building society and of the other building society or societies participating in the amalgamation or transfer;

(d)the payments (if any) to be made to members of the building society and of the other building society or societies participating in the amalgamation or transfer by way of a distribution of funds in consideration of the amalgamation or transfer;

(e)the changes (if any) to be made, in connection with the amalgamation or transfer of engagements, in the terms governing outstanding [F1224loans made by the building society which are secured on land];

(f)any other matter which the [F1222appropriate authority] requires in the case of the particular amalgamation or transfer of engagements.

[F1225(4A)The PRA must consult the FCA before approving a statement under sub-paragraph (3).]

F1226(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(6)Any expression used in this paragraph and in section 96 has the same meaning in this paragraph as in that section.

Textual Amendments

F1224Words in Sch. 16 Pt. I para. 1(4)(e) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 66(1)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxviii)

Part IIU.K. Notification of Proposals for Merger

Modifications etc. (not altering text)

C185Sch. 16 Pt. II (paras. 2–6) excluded by S.I. 1986/2169, art. 10

PreliminaryU.K.

2U.K.In this Part of this Schedule—

Modifications etc. (not altering text)

C186Definition applied (1.6.1999) by S.I. 1999/1215, reg. 3(6)

Duty to notify membersU.K.

3(1)Subject to sub-paragraph (3) below, it shall be the duty of a building society receiving a merger proposal to send, in accordance with this Part of this Schedule, a merger statement in respect of the proposal to every member entitled to notice of a meeting of the society.U.K.

(2)A merger statement must contain the following particulars—

(a)the fact that a merger proposal has been made, and

(b)the identity of the proposer,

with or without other particulars regarding the proposal.

(3)Sub-paragraph (1) above does not require a merger statement to be sent to members if the proposer has requested in writing that the requisite particulars are to be treated as confidential; and, where such a request is made and is at a later date withdrawn in writing, the society receiving the proposal shall, for the purposes of this Part of this Schedule, treat the proposal as having been received on that date instead of any earlier date.

4(1)A building society shall include in or with every notice of its annual general meeting a merger statement with respect to any merger proposal, other than a proposal of which notice has already been given under this paragraph,—U.K.

(a)received by it during the period of 12 months ending with the ninth month of the last financial year of the society before that meeting; or

(b)treated by paragraph 3(3) above as having been received by it during the last three months of that financial year;

and the society may also include, under this sub-paragraph, a merger statement with respect to any proposal received, or treated as received, by it after the end of either period.

F1227[(2)In any case where merger resolutions are to be moved at any meeting of a building society, every notice of the meeting shall have included in or with it—

(a)a merger statement with respect to any merger proposal, other than a proposal of which notice has already been given under this paragraph, received by it more than 42 days before the date of the meeting; and

(b)a transfer proposal notification with respect to any transfer proposal so received by it.

[F1228(2A)Where a merger statement or a transfer proposal notification is required to be sent to a person in or with the notice of a meeting of the society under sub-paragraph (1) or (2)—

(a)in a case where notice of a meeting is given electronically to a person in accordance with paragraph 22A of Schedule 2, the merger statement or transfer proposal notification may be sent to him electronically only if it is sent to the same electronic address and at the same time as the notice;

(b)in a case where notice of a meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send the statement or notification shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

(2B)The conditions of this sub-paragraph are satisfied in the case of a merger statement or transfer proposal notification if—

(a)the society and that person have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the merger statement or transfer proposal notification in question;

(c)at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—

(i)the publication of the merger statement or transfer proposal notification on a web site,

(ii)the address of that web site,

(iii)the place on that web site where that statement or notification may be accessed, and how it may be accessed; and

(d)the statement or notification is published continuously on that web site throughout the period beginning when the person is notified in accordance with paragraph (c) and ending with the conclusion of the meeting.

(2C)Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (1) or (2)—

(a)a statement or notification is published for a part, but not all, of the period mentioned in sub-paragraph (2B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

that failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 95(4)(c).]

(3)In this paragraph and paragraph 5 below—

Textual Amendments

F1227Sch. 16 Pt. II para. 4(2)(3) substituted for Sch. 16 Pt. II para. 4(2) (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 66(2); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xx)

Duty to notify [F1222appropriate authority] U.K.

5(1)Where a building society sends a merger statement [F1229or transfer proposal notification] to its members under paragraph 4 above in connection with a meeting of the society, it shall send a copy of the statement [F1230or notification] to the [F1231FCA and, if the society is a PRA-authorised person, the PRA] at least 14 days before the date of the meeting.U.K.

(2)The [F1232FCA must] keep the copy of a merger statement [F1233or transfer proposal notification] received by it from a building society in the public file of that society.

Textual Amendments

F1229Words in Sch. 16 Pt. II para. 5(1) inserted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 66(3)(a); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xx)

F1230Words in Sch. 16 Pt. II para. 5(1) inserted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 66(3)(b); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xx)

F1233Words in Sch. 16 Pt. II para. 5(2) inserted (1.12.1997) by 1997 c. 32, s. 43, Sch. 7 para. 66(4); S.I. 1997/2668, art. 2, Sch. Pt. I(j)(l)(xx)

PenaltyU.K.

6[F1234(1)]If default is made by a building society in complying with paragraph 4(1), 4(2) or 5 above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and so shall any officer who is also guilty of the offence.U.K.

[F1235(2)Where, in a case in which paragraph 4(2A)(b) is relied on for compliance with a requirement under [F1236paragraph (a) or (b)] of paragraph 4(2)—

(a)a merger statement or transfer proposal notification is published for a part, but not all, of the period mentioned in sub-paragraph (2B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under this paragraph by reason of that failure.]

Textual Amendments

Part IIIU.K. Confirmation by [F1222appropriate authority] : Procedure

7U.K.An application for confirmation by the [F1222appropriate authority] of an amalgamation or transfer of engagements shall be made in such manner as the [F1222appropriate authority] may [F1237direct].

Textual Amendments

F1237Word in Sch. 16 para. 7 substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 211(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

8(1)Where a building society applies to the [F1222appropriate authority] for confirmation of an amalgamation or transfer or engagements, the society shall publish notice of the application in any one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the [F1222appropriate authority] directs and, if it so directs, in one or more newspapers.U.K.

(2)A notice published in pursuance of sub-paragraph (1) above shall—

(a)state that any interested party has the right to make representations to the [F1222appropriate authority] with respect to the application; and

(b)specify a date determined by the [F1222appropriate authority] before which any written representations or notice of a person’s intention to make oral representations must be received by the Commission; and

(c)specify a date determined by the [F1222appropriate authority] as the day on which it intends to hear any oral representations.

9(1)After the date specified in pursuance of paragraph 8(2)(b) above, the [F1222appropriate authority] shall—U.K.

(a)determine the time and place at which oral representations may be made;

(b)give notice of that determination to the building societies participating in the amalgamation or transfer and any persons who have given notice of their intention to make oral representations; and

(c)send copies of the written representations received by the [F1222appropriate authority] to the building societies participating in the amalgamation or transfer.

(2)The [F1222appropriate authority] shall allow any building society participating in the amalgamation or transfer an opportunity to comment on the written representations, whether at a hearing or in writing before the expiration of such period as the [F1222appropriate authority] specifies in a notice to the society.

Section 97 and 98.

SCHEDULE 17U.K. Transfers of Business: Supplementary Provisions

Modifications etc. (not altering text)

C188Sch. 17 applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

F1238[PART IU.K. Issue of statement or summary to members

Textual Amendments

F1238Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F1239PreliminaryU.K.

Textual Amendments

F1239Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12401U.K.In this Part of this Schedule—

Textual Amendments

F1240Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F1241Duty to send transfer statements or summaries to membersU.K.

Textual Amendments

F1241Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12422U.K.A building society which desires to transfer its business shall, in accordance with this Part of this Schedule, send a transfer statement, or a transfer summary, to every member entitled to notice of a meeting of the society.

Textual Amendments

F1242Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

Modifications etc. (not altering text)

C189Sch. 17 para. 2 amended (2.3.1998) by S.I. 1998/212, reg. 4, Sch. 2

F12433(1)A transfer statement, in relation to a transfer of business by a building society, shall contain—U.K.

(a)the particulars required, in relation to the prescribed matters, by the regulations made under paragraph 5(1) below, and

(b)particulars of any other matters required by the [F1244appropriate authority]] in the case of the particular transfer,

with or without other particulars regarding the transfer.

(2)A transfer summary, in relation to a transfer of business by a building society, shall contain—

(a)the information required by the regulations made under paragraph 5(2) below, and

(b)any other information required by the [F1244appropriate authority] in the case of the particular transfer,

with or without other particulars regarding the transfer.

Textual Amendments

F1243Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12454(1)Subject to sub-paragraph (3) below, a building society shall, in relation to a transfer of business, include a transfer statement, or a transfer summary, in or with the notice to be sent to its members of the meeting of the society at which the requisite transfer resolutions are to be moved.U.K.

[F1246(1A)Where a transfer statement or transfer summary is required under sub-paragraph (1) to be sent to a member in or with the notice of the meeting of the society at which the requisite transfer resolutions are to be moved—

(a)in a case where notice of that meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the transfer statement or transfer summary may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice;

(b)in a case where notice of that meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send the statement or summary to that member shall also be treated as satisfied if the conditions set out in sub-paragraph (1B) are satisfied.

(1B)The conditions of this sub-paragraph are satisfied in the case of a transfer statement or transfer summary if—

(a)the society and that member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the statement or summary in question;

(c)at the same time and in the same manner as the society notifies that member of the publication of the notice of the meeting, it notifies him of—

(i)the publication of the statement or summary on a web site,

(ii)the address of that web site,

(iii)the place on that web site where that statement or summary may be accessed, and how it may be accessed; and

(d)the statement or summary is published continuously on that web site throughout the period beginning when the member is notified in accordance with paragraph (a) and ending with the decision of the [F1244appropriate authority] whether to confirm the transfer pursuant to section 98.

(1C)Where, in a case in which sub-paragraph (1A)(b) is relied on for compliance with a requirement under sub-paragraph (1)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (1B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (1B) from being treated as fulfilled in relation to section 98.]

(2)Subject to sub-paragraph (3) below, where a building society sends a transfer summary, a transfer statement—

(a)shall be handed forthwith and free of charge to any member to whom the summary was sent who asks for such a statement at an office or branch of the society; and

(b)shall be sent forthwith and free of charge to any such member who asks for such a statement otherwise than at such an office or branch.

[F1247(2A)Where a transfer statement is required to be sent to a member under sub-paragraph (2)(b)—

(a)it may be sent to him electronically only if it is sent to an electronic address notified by him to the society for the purpose;

(b)the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

(2B)The conditions of this sub-paragraph are satisfied in the case of a transfer statement if—

(a)the society and that member have agreed information which is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the transfer statement in question;

(c)the society notifies the member forthwith, on receiving a request from him for such a statement, of—

(i)the publication of the statement on a web site,

(ii)the address of that web site,

(iii)the place on that web site where the statement may be accessed and how it may be accessed; and

(d)that statement is published continuously on that web site for the period beginning with the giving of that notification and ending with the decision of the [F1244appropriate authority] whether to confirm the transfer pursuant to section 98.

(2C)Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2)(b)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 98.]

(3)No transfer statement shall be sent or handed to a member unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under paragraph 3(1)(b) above, have been approved by the [F1244appropriate authority] .

[F1248(4)The PRA must consult the FCA before approving a statement under sub-paragraph (3).]

Textual Amendments

F1245Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12495(1)The [F1250Treasury], may make regulations for the purpose of specifying, as prescribed matters, the matters of which transfer statements are to give particulars; and the regulations may also require particulars to be given of any alternatives to the particular transfer which were available to the society making the transfer.U.K.

(2)The [F1250Treasury], may make regulations for the purpose of specifying the information which transfer summaries are to give.

(3)Any power to make regulations under this paragraph is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Textual Amendments

F1249Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F1250Words in Sch. 17 para. 5(1)(2) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 212(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C190Sch. 17 para. 5(1) function of Building Societies Commission transferred (1.12.2001) to Treasury by S.I. 2001/2617 arts. 2(b), 4(1), Sch. I Pt. III

F1251[PART IAU.K. Notification of proposals for transfers of business

Textual Amendments

F1251Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F1252PreliminaryU.K.

Textual Amendments

F1252Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12535AU.K.In this Part of this Schedule—

Textual Amendments

F1253Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

Modifications etc. (not altering text)

C191Definition applied (1.6.1999) by S.I. 1999/1215 reg. 3(6)

F1254Duty to notify membersU.K.

Textual Amendments

F1254Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12555B(1)Subject to sub-paragraph (3) below, it shall be the duty of a building society receiving a transfer proposal to send, in accordance with this Part of this Schedule, a transfer proposal notification in respect of the proposal to every member entitled to notice of a meeting of the society.U.K.

(2)A transfer proposal notification must contain the following particulars—

(a)the fact that a transfer proposal has been made, and

(b)the identity of the proposer;

with or without other particulars regarding the proposal.

(3)Sub-paragraph (1) above does not require a transfer proposal notification to be sent to members if the proposer has requested in writing that the requisite particulars are to be treated as confidential; and, where such a request is made and is at a later date withdrawn in writing, the society receiving the proposal shall, for the purposes of this Part of this Schedule, treat the proposal as having been received on that date instead of any earlier date.

Textual Amendments

F1255Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12565C[F1257(1)]A building society shall include in or with every notice of its annual general meeting a transfer proposal notification with respect to any transfer proposal, other than a proposal of which notice has already been given under this paragraph—U.K.

(a)received by it during the period of 12 months ending with the ninth month of the last financial year of the society before that meeting; or

(b)treated by paragraph 5B(3) above as having been received by it during the last three months of that financial year;

and the society may also include, under this paragraph, a transfer proposal notification with respect to any proposal received, or treated as received, by it after the end of either period.

[F1258(2)Where a transfer proposal notification is required under sub-paragraph (1) to be sent to a member in or with the notice of an annual general meeting of the society—

(a)in a case where notice of that meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the transfer proposal notification may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice.

(b)in a case where notice of that meeting is given on a website in accordance with paragraph 22B of Schedule 2, the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (3) are satisfied.

(3)The conditions of this sub-paragraph are satisfied in the case of a transfer proposal notification if—

(a)the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the transfer proposal notification in question;

(c)at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—

(i)the publication of the transfer proposal notification on a web site,

(ii)the address of that web site,

(iii)the place on that web site where that notification may be accessed, and how it may be accessed; and

(d)the notification is published continuously on that web site throughout the period beginning when the person is notified in accordance with paragraph (c) and ending with the conclusion of the meeting.

(4)Where, in a case in which sub-paragraph (2)(b) is relied on for compliance with a requirement under sub-paragraph (1)—

(a)a statement is published for a part, but not all, of the period mentioned in subparagraph (3)(d), but

(b)the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

the failure shall not invalidate the proceedings of a meeting.]

Textual Amendments

F1256Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F1259Duty to notify [F1244appropriate authority]] U.K.

Textual Amendments

F1259Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12605D(1)Where a building society sends a transfer proposal notification to its members under paragraph 5C above in connection with a meeting of the society, it shall send a copy of the notification to the [F1261FCA and, if the society is a PRA-authorised person, the PRA] at least 14 days before the date of the meeting.U.K.

(2)The [F1262FCA must] keep the copy of a transfer proposal notification received by it from a building society in the public file of that society.

Textual Amendments

F1260Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F1263PenaltyU.K.

Textual Amendments

F1263Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

F12645E[F1265(1)]If default is made by a building society in complying with paragraph 5C or 5D above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and so shall any officer who is also guilty of the offence.U.K.

[F1266(2)But no offence is committed under this paragraph, in a case in which paragraph 5C(2)(b) is relied on for compliance with a requirement under paragraph 5C(1), where—

(a)a transfer proposal notification is published for a part, but not all, of the period mentioned in paragraph 5C(3)(d); and

(b)the failure to publish that notification throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid.]

Textual Amendments

F1264Sch. 17 Pts. I, IA substituted for Sch. 17 Pt. I (1.12.1997) by 1997 c. 32, s. 30(3), Sch. 5 Pts. I, II; S.I. 1997/2668, art. 2, Sch. Pt. I(e)

Part IIU.K. Confirmation by [F1244appropriate authority] : Procedure

6U.K.An application by a building society for confirmation by the [F1244appropriate authority] of a transfer of its business tschedule 16o a company shall be made in such manner as the [F1244appropriate authority] may [F1267direct].

Textual Amendments

F1267Word in Sch. 17 para. 6 substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 212(d) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

7(1)Where a building society applies for confirmation of a transfer of its business, the society shall publish a notice of the application in any one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the [F1244appropriate authority] directs and, if it so directs, in one or more newspapers.U.K.

(2)A notice published in pursuance of sub-paragraph (1) above shall—

(a)state that any interested party has the right to make representations to the [F1244appropriate authority] with respect to the application;

(b)specify a date determined by the [F1244appropriate authority] before which any written representations or notice of a person’s intention to make oral representations must be received by the [F1244appropriate authority]; and

(c)specify a date determined by the [F1244appropriate authority] as the day on which it intends to hear any oral representations.

8(1)After the date specified in the notice in pursuance of paragraph 7(2)(b) above, the Commission shall—U.K.

(a)determine the time and place at which oral representations may be made;

(b)give notice of that determination to the building society making the transfer and any persons who have given notice of their intention to make oral representations; and

(c)send copies of the written representations received by the Commission to the building society making the transfer.

(2)The Commission shall allow the building society making the transfer an opportunity to comment on the written representations, whether at a hearing or in writing, before the expiration of such period as the Commission specifies in a notice to the society.

Section 120.

SCHEDULE 18U.K. Amendments of Enactments

Part IU.K. United Kingdom

M53Bankers’ Books Evidence Act 1879 (c.11)U.K.

Marginal Citations

1U.K.In section 9(1) of the Bankers’ Books Evidence Act 1879 (meaning of “bank” and “banker” for purposes of that Act), after paragraph (a) there shall be inserted the following—

“(aa)a building society (within the meaning of the Building Societies Act 1986);”.

Land Registration Act 1925 (c.21)U.K.

F12682U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Payment of Wages Act 1960 (c. 37)U.K.

F12693U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1269Sch. 18 para. 3 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

Trustee Investments Act 1961 (c. 62)U.K.

4(1)This paragraph amends the M54Trustee Investments Act 1961 as follows.U.K.

(2)In Part II of Schedule 1 (narrower range investments requiring advice), for paragraph 12 there shall be substituted—

“12In deposits with a building society within the meaning of the Building Societies Act 1986.”.

(3)In Part III of Schedule 1 (wider range investments), for paragraph 2 there shall be substituted—

“2In shares in a building society within the meaning of the Building Societies Act 1986.”.

Marginal Citations

M549 & 10 Eliz. 2 c. 62.

Stock Transfer Act 1963 (c.18)U.K.

5U.K.In section 1(4) of the M55Stock Transfer Act 1963 (simplified transfer of certain securities, not to apply to building society securities), for “1962” there shall be substituted “ 1986 ”.

Marginal Citations

Industrial and Provident Societies Act 1965 (c.12)U.K.

F12706U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Income and Corporation Taxes Act 1970 (c.10)U.K.

F12717U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Banking and Financial Dealings Act 1971 (c.80)U.K.

8(1)This paragraph amends the M56Banking and Financial Dealings Act 1971 as follows.U.K.

(2)In section 2(1) (power to suspend financial dealings on bank holidays) after paragraph (g) there shall be inserted—

“; and

(h)a direction that, subject as aforesaid, no building society shall, on that day, except with permission so granted, effect in the course of its business any transaction or, according as may be specified in the order, a transaction of such kind as may be so specified.”

(3)In section 2(6) after the definition of “authorised dealer in gold” there shall be inserted—

““building society” means a building society within the meaning of the Building Societies Act 1986.”.

Marginal Citations

Local Government Act 1972 (c.70)U.K.

9U.K.In Schedule 12A (access to information: exempt information) to the M57Local Government Act 1972—

(a)in Part II, in paragraph 2(d) for “1962” there shall be substituted “ 1986 ”; and

(b)in Part III, in paragraph 1(1), after the definition of "protected informant’ there shall be inserted the following definition—

Marginal Citations

Consumer Credit Act 1974 (c. 39)U.K.

10(1)This paragraph amends the M58Consumer Credit Act 1974 as follows.U.K.

(2)In section 16(1) (consumer credit agreement with certain bodies exempt from regulation) the words “or building society” shall be omitted and, after paragraph (f), there shall be inserted the words “, or

(g)a building society.”.

(3)In section 16(3) (Secretary of State’s duty to consult before making orders), after paragraph (d) there shall be inserted the words “or

(e)under subsection (1)(g) without consulting the Building Societies Commission and the Treasury.”.

(4)In section 189(1) (definitions), for the definition of “building society” there shall be substituted the following definition—

““building society” means a building society within the meaning of the Building Societies Act 1986;”.

Marginal Citations

Solicitors Act 1974 (c.47)U.K.

11(1)This paragraph amends the M59Solicitors Act 1974 as follows.U.K.

F1272(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F1272(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(4)In section 85 (bank accounts)—

(a)after “account with a bank” there shall be inserted “ or a building society ”, and

(b)in paragraphs (a) and (b) after “bank” there shall be inserted “ or society ”.

(5)In section 87(1) (interpretation), after the definition of “bank” there shall be inserted—

““building society” means a building society within the meaning of the Building Societies Act 1986; and a reference to an account with a building society is a reference to a deposit account.”.

Textual Amendments

Marginal Citations

Home Purchase Assistance and Housing Corporation Guarantee Act 1978 (c.27)U.K.

[F127312U.K.In section 3(1) (building society law) of the M60Home Purchase Assistance and Housing Corporation Guarantee Act 1978, after “determining” there shall be added the word “ (a) ” and at the end of that subsection there shall be added the words—

“(b)the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.”.]

Textual Amendments

Marginal Citations

Banking Act 1979 (c.37)U.K.

F127413U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Charging Orders Act 1979 (c.53)U.K.

14U.K.In section 6(1) (interpretation) of the M61Charging Orders Act 1979, in the definition of “building society”, for “1962” there shall be substituted “ 1986 ”.

Marginal Citations

Finance Act 1982 (c.39)U.K.

F127515U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Companies Act 1985 (c.6)U.K.

F127616U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Insolvency Act 1985 (c.65)U.K.

F127717U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Housing Act 1985 (c. 68)U.K.

18(1)This paragraph amends the M62Housing Act 1985 as follows.U.K.

(2)In section 442(5) (consultations by Secretary of State regarding forms of local authority indemnity agreement) for “Chief Registrar of Friendly Societies" in paragraph (a), there shall be substituted “Building Societies Commission".

(3)In section 447 (recognised lending institutions) and in section 448 (recognised savings institutions) for “designated building societies" there shall be substituted “building societies".

F1278[(4)For section 450 (modifications of building society law) there shall be substituted the following section—

450“ Modifications of building society law.

So much of an advance by a building society which is partly financed under section 445 (assistance for first-time buyers) or the corresponding Scottish or Northern Ireland provisions as is so financed shall be treated as not forming part of the advance for the purpose of determining—

(a)whether the advance, or any further advance made within two years of the date of purchase, is beyond the powers of the society, and

(b)the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.”.]

(5)In section 622 (minor definitions) for the definition of “building society" there shall be substituted—

““building society” means a building society within the meaning of the Building Societies Act 1986”.

Textual Amendments

F1278Sch. 18 para. 18(4) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(y)(cc)(xx)

Marginal Citations

Housing Associations Act 1985 (c.69)U.K.

19(1)This paragraph amends the M63Housing Associations Act 1985 as follows.U.K.

F1279(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3)In section 84(5) and 86(4) (consultation by Secretary of State regarding building society indemnities) for “Chief Registrar of Friendly Societies” there shall be substituted “ Building Societies Commission ”.

(4)In section 101 (minor definitions), for the definition of “building society” there shall be substituted—

““building society” means a building society within the meaning of the Building Societies Act 1986;”.

Textual Amendments

F1279Sch. 18 para. 19(2) repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

Marginal Citations

Part IIU.K. Northern Ireland

Industrial and Provident Societies Act (Northern Ireland)1969 (c.24 N.I.)U.K.

20U.K.In section 31(b) of the M64Industrial and Provident Societies Act (Northern Ireland) 1969 (authorised investments) for “society registered under the Building Societies Act” there shall be substituted “ building society within the meaning of the Building Societies Act 1986. ”.

Marginal Citations

M65Payment of Wages Act (Northern Ireland 1970U.K.

Marginal Citations

F128021U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1280Sch. 18 para. 21 repealed by S.I. 1988/796, art. 27(2), Sch. 5 Pt. II

Private Streets (Northern Ireland) Order 1980 (S.I. 1980/1086 (N.I.12))U.K.

22U.K.In Article 33 (security not to be deemed prior mortgage under Building Societies Acts) of the M66Private Streets (Northern Ireland) Order 1980 for the words from “section 32” where they first occur onwards there shall be substituted “ section 11(2)(d) or (4)(d) of the Building Societies Act 1986 ”.

Marginal Citations

Housing (Northern Ireland) Order 1981 (S.I. 1981/156 (N.I.3))U.K.

23(1)This paragraph amends the M67Housing (Northern Ireland) Order 1981 as follows.U.K.

(2)In Article 2(2) (interpretation) after the definition of “building regulations” there shall be inserted—

““building society” means a building society within the meaning of the Building Societies Act 1986”.

F1281[(3)For Article 155 (building society law) there shall be substituted the following section—

155“ Modifications of building society law.

So much of an advance by a building society which is partly financed under this Part or sections 445 to 449 of the Housing Act 1985 or the Home Purchase Assistance and Housing Corporation Guarantee Act 1978 as is so financed shall be treated as not forming part of the advance for the purpose of determining—

(a)whether the advance, or any further advance made within two years of the date of purchase, is beyond the powers of the society, and

(b)the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.”.]

(4)In Article 155A (exclusion of Restrictive Trade Practices Act 1976), after “Scottish Provisions” there shall be inserted “ (namely, sections 445 to 447 of the Housing Act 1985 or the Home Purchase Assistance and Housing Corporation Guarantee Act 1978) ”.

(5)In Article 156(5)(b) (consultations by the Department regarding forms of indemnity agreements) for “Registrar of Friendly Societies for Northern Ireland” there shall be substituted “ Building Societies Commission ”.

(6)For paragraph 1 of Schedule 10 there shall be substituted—

“1Building Societies.”.

Textual Amendments

F1281Sch. 18 para. 23(3) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 46(2), 47(3), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(y)(cc)(xx)

Marginal Citations

Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983 (S.I. 1983/766 (N.I.9))U.K.

24U.K.In Article 3(10) of the M68Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983, after “applies” in the definition of “mortgage” there shall be inserted “ and, subject to paragraph 2(7) of Schedule 4 to the Building Societies Act 1986, does not include a mortgage to which that paragraph 2 applies. ”.

Marginal Citations

Housing (Northern Ireland) Order 1983 (S.I. 1983/1118 (N.I.15))U.K.

25U.K.In Article 3(4) of the M69Housing (Northern Ireland) Order 1983, in the definition of “building society” for the words from “1962” onwards there shall be substituted “ 1986 ”.

Marginal Citations

Companies (Northern Ireland) Order 1986U.K.

F128226U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1282Sch. 18 para. 26 repealed (N.I.) (1.10.1991) by S.I. 1989/2404 (N.I. 18), arts. 25(3), 37, Sch. 5 Pt. I; S.R. 1991/410, art. 1(2)

Section 120.

SCHEDULE 19U.K. Repeals and Revocations

Part IU.K. Repeals: General

ChapterShort titleExtent of repeal
37 & 38 Vict. c. 42.The Building Societies Act 1874.Section 1.
Section 4.
Section 32.
57 & 58 Vict. c. 47.The Building Societies Act 1894.Section 8(1).
Section 29.
8 & 9 Eliz. 2 c. 64.The Building Societies Act 1960.Section 72.
Section 73(1).
Section 77.
In Schedule 5, the entry relating to paragraph 4 of section 32 of the Building Societies Act 1874.
9 & 10 Eliz. 2 c. 62.The Trustee Investments Act 1961.In Part IV of Schedule 1, paragraphs 3A and 7.
10 & 11 Eliz. 2 c. 37.The Building Societies Act 1962.
The whole Act.
1965 c. 32.The Administration of Estates (Small Payments) Act 1965.In Schedules 1 and 3, the entries relating to the Building Societies Act 1962.
69 c. 46.The Family Law Reform Act 1969.In Schedule 1, the entry relating to the Building Societies Act 1962.
1970 c. 10.The Income and Corporation Taxes Act 1970.In section 343(5), the words “union or”.
1974 c. 39.The Consumer Credit Act 1974.In section 16, in subsection (1) the words “or building society,” and, in subsections (1)(e) and (3)(c), the word “or”.
1974 c. 46.The Friendly Societies Act 1974.In Schedule 10, paragraph 9.
1974 c. 47.The Solicitors Act 1974.In section 32, in subsections (1) and (2), the word “banks”.
1974 c. 49.The Insurance Companies Act 1974.In Schedule 1, the entries relating tothe Building Societies Act 1962.
1978 c. 27.The Home Purchase Assistance and Housing Corporation Guarantee Act 1978.In section 3, subsections (2) to (4).
1979 c. 37.The Banking Act 1979.In paragraph 6 of Schedule 1, the words from “within” to the end.
In Schedule 6, paragraphs 6, 7, 16, and 17.
1982 c. 50.The Insurance Companies Act 1982.In Schedule 5, paragraphs 3 and 5.
1984 c. 28.The County Courts Act 1984.In Schedule 2, paragraph 26.
1985 c. 9.The Companies Consolidation (Consequential Provisions) Act 1985.In Schedule 2, the entries relating to the Building Societies Act 1962.
1985 c. 58.The Trustee Savings Banks Act 1985.In Schedule 1, paragraph 11(2)(a) and so much of that sub-paragraph as relates to the section 59 specified therein.
1985 c. 61.The Administration of Justice Act 1985.Section 66.
1985 c. 68.The Housing Act 1985.In section 458, the definition of “designated building society”.
In section 459, the entry relating to “designated buildings society”.
1985 c. 69.The Housing Associations Act 1985.Sections 63 to 66.
In Section 72, the definitions of “building society”, “Chief Registrar” and “officer”.
In section 73, the entries relating to “building society”, “Chief registrar” and “officer”.
1985 c. 71.The Housing (Consequential Provisions) Act 1985.In Schedule 2, paragraphs 5 and 6.

Part IIU.K. Revocation Extending to Great Britain

NumberTitleExtent of revocation
S.I. 1981/1488.The Building Societies (Authorisation) Regulations 1981.The whole Regulations.

PART IIIU.K. Repeals and Revocations Extending Only to Northern Ireland

Chapter or numberShort titleExtent of repeal or revocation
1967 c. 5 (N.I.).The Administration of Estates (Small Payments) Act (Northern Ireland) 1967.In Schedule 1, the entry relating to the Building Societies Act 1874.
1967 c. 31 (N.I.).The Building Societies Act (Northern Ireland) 1967.The whole Act.
1969 c. 24 (N.I.).The Industrial and Provident Societies Act (Northern Ireland) 1969.In section 101(1), the definition of “Building Societies Acts”.
1969 c. 28 (N.I.).The Age of Majority Act (Northern Ireland) 1969In Schedule 1, the entry relating to the Building Societies Act (Northern Ireland) 1967.
1969 c. 31 (N.I.).The Age of Majority Act (Northern Ireland) 1969.In Part I of Schedule 1, the entry relating to the Building Societies Act (Northern Ireland) 1967.
1970 c. 18 (N.I.).The Land Registration Act (Northern Ireland) 1970.In Schedule 12 the entry relating to the Building Societies Act (Northern Ireland) 1967.
1978 c. 23.The Judicature (Northern Ireland) Act 1978.In Schedule 5, in Part II the entry relating to the Building Societies Act (Northern Ireland) 1967.
S.I. 1979/1573 (N.I.12).The Statutory Rules (Northern Ireland) Order 1979.In Schedule 4 the entry relating to the Building Societies Act (Northern Ireland) 1967.
1980 c. 25.The Insurance Companies Act 1980.In Schedule 3, paragraph 3.
S.I. 1981/156 (N.I.3).The Housing (Northern Ireland) Order 1981.Article 156(6).
In Part II of Schedule 2, the entry relating to the Building Societies Act (Northern Ireland) 1967.
S.R. 1982/155 (N.I.).The Building Societies (Authorisation) Regulations (Northern Ireland) 1982.The whole Regulations.
S.I. 1983/776 (N.I.9).The Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983.In Article 3(10), in the definition of “mortgage” the words “section 37 of the Building Societies Act (Northern Ireland) 1967”.
S.I. 1983/1118 (N.I.15).The Housing (Northern Ireland) Order 1983.In Schedule 10, the entry relating to the Building Societies Act (Northern Ireland) 1967.
1985 c. 71.The Housing (Consequential Provisions) Act 1985.In Schedule 2, paragraphs 13, 51(2) and 51(5)(a).
S.I. 1986/1035 (N.I.9).The Companies Consolidation (Consequential Provisions) (Northern Ireland) Order 1986.In Part I of Schedule 1, the entry relating to the Building Societies Act (Northern Ireland) 1967.

Section 120.

SCHEDULE 20U.K. Transitional and Saving Provisions

PreliminaryU.K.

1U.K.In this Schedule—

Textual Amendments

F1283Definitions in Sch. 20 para. 1 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(a), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Adoption of powers and alteration of rulesU.K.

F12842U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F12853U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Default powersU.K.

F12864U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Registration with existing authoritiesU.K.

5U.K.A building society which, at the commencement date for section 5, was registered under the M70Building Societies Act (Northern Ireland) 1967 or registered or deemed to be registered in Northern Ireland under the enactments repealed by that Act shall be treated, for the purposes of this Act, as registered with the central office immediately before the commencement of that section.

Marginal Citations

M701967 c. 31. (N.I.).

Authorisation under existing enactmentsU.K.

6(1)A building society which, at the commencement date for section 9 is authorised to raise money and accept deposits under—U.K.

(a)the M71Building Societies (Authorisation) Regulations 1981, or

(b)the M72 Building Societies (Authorisation) Regulations (Northern Ireland) 1982,

shall be treated, whether or not the requirements of subsection (4) of section 9 would be fulfilled in its case, at the commencement of that section as authorised for the purposes of this Act (in particular Part VI).

(2)The central office shall record in the public file of each building society to which sub-paragraph (1) above applies the fact that, by virtue of that sub-paragraph, the society is to be treated as authorised for the purposes of this Act.

Marginal Citations

Anticipation of powers: declaratory provisionU.K.

[F12877(1)It is hereby declared that every building society has had, as from 19th December 1985, power, for the purposes of any power conferred by this Act on building societies or building societies of its description, to do such things, subject to sub-paragraph (2) below, as are reasonably necessary to enable it—U.K.

(a)to decide whether or not, and to what extent, to exercise (and in the case of an adoptable power to adopt) the power, and

(b)if it decides to exercise the power, to exercise it as from the date when it becomes exercisable by the society.

(2)Sub-paragraph (1)(b) above does not authorise a society—

(a)to make contracts, other than conditional contracts, for the acquisition of land, the acquisition of a business or the acquisition of shares in any company if that company offers the public any service or facility within the power,

(b)to issue invitations to members of the society or the public to apply for any power to be exercised for their benefit, or

(c)to retain shares in a company which offers the public any service or facility within the power;

and, in this sub-paragraph, “conditional”, in relation to contracts with respect to the exercise of a power, means conditional on the power’s becoming exercisable by the society.

(3)The power conferred by this paragraph, and activities carried on under it, for the purposes of an adoptable power are not to be treated as included in, or in activities comprised in, that adoptable power for the purposes of paragaph 8 of this Schedule.]

Textual Amendments

F1287Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Unlawful anticipation of powersU.K.

[F12888(1)Where a building society adopts any adoptable power under paragraph 2 or 3 above—U.K.

(a)it shall, by virtue of this paragraph, assume an obligation, enforceable as provided in pararaph 9 below, not to exercise that power until the date on which the memorandum of its powers takes effect as respects that power, and

(b)it shall send to the central office, with the documents required by paragraph 2(1) or 3(1) above a declaration as respects that power made on behalf of the society which satisfies the requirements of this paragraph.

(2)The obligation assumed by virtue of this paragraph on the adoption of a power does not extend to the exercise of any power included in the adoptable power which the society has under the law in force at any time before the registration takes effect.

(3)A declaration, to satisfy the requirements of this paragraph, must be made by the chairman of the board of directors of the society, by one other director and by the chief executive of the society and it must either—

(a)state that, to the best of the knowledge and belief of the declarants, after due enquiry, the society has not, or has not with the permitted qualification, carried on any activity comprised in the power during the period which began one year before the specified date (or with 1 April 1986, if later) and expired with the date of the meeting at which the power was adopted, or

(b)state that, to the best of the knowledge and belief of the declarants, after due enquiry, the society, with specified exceptions, has not, or has not with the permitted qualification, carried on any activity comprised in the power during the period which began one year before the specified date (or with 1 April 1986, if later) and expired with the date of the meeting at which the power was adopted.

(4)The qualification of the statement so required which is permitted is that in so far as the society has, at any time during the said period, carried on any activity comprised in the power to which the statement relates, the society had the power to carry on that activity at that time under the law in force at that time.

(5)The exceptions to the statement so required must not include activities of the society which constitute significant excesses of its powers during the said period; and a declaration specifying activities as exceptions to the statement so required must also state the opinion of the declarants that the activities are believed not to constitute significant excesses of the society’s powers during the period to which the declaration relates.]

Textual Amendments

F1288Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Penalty for breach of undertakingU.K.

[F12899U.K.If, in breach of the obligation assumed by virtue of paragraph 8 above, a building society exercises any power to which the obligation extends, then—

(a)the society shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum, and

(b)every officer of the society who is also guilty of the offence shall be liable, on summary conviction to a fine not exceeding the statutory maximum.]

Textual Amendments

F1289Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Penalty for false declarationU.K.

[F129010U.K.If the statement in a declaration made for the purposes of paragraph 8 above is false, then, any person who made the statement knowing it to be false or reckless as to whether it was true or false shall be liable—

(a)on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both, and

(b)on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or both.]

Textual Amendments

F1290Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Powers of central officeU.K.

[F129111(1)The central office, on receiving from a building society the declaration required by and the other documents referred to in paragraph 8 above, shall refer to the Commission for its determination the questi on whether or not the memorandum of the society’s powers is to be registered.U.K.

(2)On a reference to the Commission of the question whether or not the memorandum of a society’s power is to be registered—

(a)if the declaration contains the statement specified in paragraph 8(3)(a) above and the Commission has no reasonable cause to believe that the society in question has carried on any activity comprised in the power to which the obligation imposed by paragraph 8 above extends at any time during the period which begin one year before the specified date (or with 1st April 1986, if later) and expired on the date on which it considers the reference, the Commission shall direct the central office to register the memorandum, and

(b)in any other case, the Commission may, as it thinks fit, direct the central office to register, or not to register, the memorandum.

(3)The Commission, in deciding, in a case falling within sub-paragraph (2)(b) above, whether or not to direct the registration of the memorandum of a society’s powers may have regard to all the circumstances of the case.

(4)No registration of a memorandum shall be effected by the central office under paragraph 2(2) or 3(2) above before the expiry of the period of 21 days beginning with the date on which it receives the declaration required by and the other documents referred to in paragraph 8 above.

(5)If the central office, in pursuance of a direction of the Commission under sub-paragraph (2) above, refuses registration of the memorandum of a society’s powers under sub-paragraph (1) above it shall serve on the society a notice—

(a)recording its refusal,

(b)specifying the activity which is believed to constitute a breach of the society’s obligation, and

(c)directing the society to make an application to the Commission under section 38 for a determination under that section whether the activity was or was not within the powers of the society at the time specified under sub-paragraph (b) above,

and shall send a copy of the notice to the Commission.

(6)The central office shall comply with any direction as regards the registration of the memorandum of the society’s powers given to it by the Commission consequent on the Commission’s determination of the society’s powers under section 38.

(7)Nothing in the foregoing provisions of this Schedule implies that it is improper for any of the following, that is to say—

(a)the Chief Registrar or any assistant registrar of the central office,

(b)the assistant registrar of friendly societies for Scotland,

(c)the registrar of building societies for Northern Ireland, or

(d)the Commission,

to give to a building society or building societies generally an indication of the action the Commission might or might not take in exercising its functions under this paragraph; and no decision of the Commission under this paragraph shall be liable to be set aside by reason of the indication having been given.

(8)In this paragraph “the specified date” has the same meaning as in paragraph 2 or, as the case may be, 3 above.]

Textual Amendments

F1291Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Permissible securities for advancesU.K.

[F129212(1)Until provision is made by an order under section 10(6) prescribing the descriptions of equitable interests in land which may be taken as security for advances secured on land, building societies may advance money on the security of an equitable interest in land in England and Wales or Northern Ireland in addition to a mortgage of the freehold or leasehold estate where the lease or a related instrument includes provision entitling the leaseholder to acquire a beneficial interest of any extent in the freehold or a greater leasehold interest and the right to acquire that interest is assigned as additional security.U.K.

(2)Until such provision is made, section 17(10) shall have effect with the substitution of a reference to an equitable interest of the description specified in sub-paragraph (1) above for the reference to an equitable interest specified in an order under section 10(6).

(3)On the making of the first order under section 10(6) this paragraph shall cease to have effect.]

Textual Amendments

F1292Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

[F129313U.K.Until provision is made by an order under section 12(3) prescribing indemnities given by a local authority as a description of additional security for the purposes of section 11(4)(c), an indemnity given under section 442 of the M73Housing Act 1985, under section 31 of the M74Tenants’ Rights, Etc. (Scotland) Act 1980 or under Article 156 of the M75Housing (Northern Ireland) Order 1981 shall be such a security; and on the making of the first order under section 12(3) this paragraph shall cease to have effect.]

Textual Amendments

F1293Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Marginal Citations

Existing business namesU.K.

F129414U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Directors in officeU.K.

[F129515(1)Except as provided in this paragraph, an existing director shall be treated for the purposes of sections 60 and 61 as having been duly elected a director on the date of his appointment as a director or, as the case may be, of his most recent re-appointment to that office before the commencement date.U.K.

(2)An existing director who holds office as director by virtue of holding some other position in the society shall, except in a case within sub-paragraph (4) below, be treated for the purposes of sections 60 and 61 as having been duly elected a director at the commencement date.

(3)If the term of office of an existing director would, in accordance with the terms on which he holds office, expire on an earlier date than is provided for by sub-paragraph (1) above, he shall vacate office on that earlier date.

(4)An existing director who has attained the normal retirement age, or the compulsory retirement age (if any), as the case may be, before the commencement date shall retire from office at the first annual general meeting of the society after the commencement date.

(5)If, at the commencement date, an existing director, other than a director falling within sub-paragraph (2) above, has held office since the date of his appointment or most recent re-appointment for a period longer than is provided for in section 60(11)(a), he shall retire from office at the first annual general meeting of the society after the commencement date.

(6)In this paragraph—

Textual Amendments

F1295Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Existing financial yearsU.K.

F129616U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Qualifying assetsU.K.

[F129717U.K.For the purposes of the application of section 118 by reference to the annual accounts of a building society prepared before the first financial year for which accounts under Part VIII of this Act are prepared, the reference to the total commercial assets of a society shall have effect as a reference to the amount in the last balance sheet prepared under the Building Societies Act 1962 which represents the total assets constituted by mortgage debts outstanding to the society.]

Textual Amendments

F1297Sch. 20 paras. 7-13, 15, 17 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 67(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxix)(cc)(xxi)

Provision of conveyancing services for building societiesU.K.

F129818U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

Prospective

Section 124.

SCHEDULE 21U.K. Provision of Conveyancing Services by Recognised Institutions and Practitioners

F1299...E+W+S

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

U.K.

F1299U.K.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2

E+W+S

F1299E+W+S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F1299Sch. 21 repealed (22.7.2004) by Statute Law (Repeals) Act 2004 (c. 14), Sch. 1 Pt. 17 Group 2