Building Societies Act 1986

42 Imposition of conditions on current authorisation. U.K.

(1) If, with respect to a building society for which an authorisation is in force, the Commission considers it expedient to do so in order to protect the investments of shareholders or depositors it may, subject to subsection (7) below, impose conditions to be complied with by the society.

(2) Section 45 has effect for the purpose of any determination whether or not it is expedient to exercise the powers conferred by this section.

(3) Failure by a society to comply with conditions imposed under this section shall render it liable, if other conditions are not imposed on it under this section, to have its authorisation revoked under section 43(1).

(4) The conditions that may be imposed by the Commission under this section may—

(a) relate to any activities of the society, whether or not those for which authorisation is required; and

(b) require the society 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.

(5) Without prejudice to the generality of subsection (4) above, conditions imposed under this section may—

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

(b) require the society to take steps with regard to the conduct of the business of any [F1 connected undertaking]; F2 . . .

(c) require the removal of any director or other officer.

[F3 and

(d)

require any person who, either alone or with any associate or associates, has a qualifying holding in the society so to reduce that holding that it ceases to be such a holding.]

(6) The Commission may impose conditions under this section where it proceeded under section 41 or where it proceeded under section 43 with a view to revoking the society’s authorisation.

(7) [F4 Subject to section 42A]the Commission shall not impose conditions under this section except in accordance with the provisions of Part III or, where applicable, Part IV of Schedule 3 to this Act; and the other provisions of that Part shall have effect in relation to the imposition of conditions under this section.

(8) Conditions imposed under this section—

(a) may be varied from time to time (and notwithstanding any pending appeal) by agreement between the Commission and the society; and

(b) may be revoked at any time by the Commission if it is satisfied that the investments of shareholders and depositors will be adequately protected without the conditions.

(9) Any expression used in this section to which a meaning is given by section 9(13) has that meaning in this section.

Textual Amendments

F1 Words in s. 42(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. 13(1); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(v)

F2 S. 42(5): word immediately before paragraph (c) omitted (1. 1. 1993) by virtue of S.I. 1992/3218, reg. 70

F3 S. 42(5)(d) and word preceding it inserted (1. 1. 1993) by S.I. 1992/3218, reg. 70

F4 Words in s. 42(7) inserted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 13(2); S.I. 1997/1427, art. 2(b)

Modifications etc. (not altering text)

C1 S. 42(1) applied (with modifications) (1.7.1995) by S.I. 1995/1442, reg. 51(1) (with transitional and transitory provisions in regs. 53(2), 54(2))