Deregulation and Contracting Out Act 1994

17 Building societies: direct participation in syndicated lending.

(1) In the [1986 c. 53.] Building Societies Act 1986, after section 14 there shall be inserted—

“14A Power to participate in secured syndicated lending

(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.”

(2) Where, immediately before the day on which this section comes into force, a building society is entitled to exercise powers conferred by section 18 of the Building Societies Act 1986 in relation to—

(a) bodies of the description specified in Part I of the Schedule to the [S.I. 1992/649.] Building Societies (Designation of Qualifying Bodies) Order 1992 (appropriate lending vehicle), or

(b) bodies of the description specified in item 9 of Part I of the Schedule to the [S.I. 1993/2706.] Building Societies (Designation of Qualifying Bodies) (No. 3) Order 1993 (lending body),

the society shall be deemed to have adopted the power conferred by section 14A of that Act in accordance with sub-paragraph (1) of paragraph 4 of Schedule 2 to that Act (alteration of powers by the adoption of an adoptable power) and to have determined under sub-paragraph (3) of that paragraph (duty to determine the date on which it intends the alteration to take effect) that it intends the alteration to take effect on the day on which this section comes into force.

(3) In relation to a deemed alteration under subsection (2) above, Schedule 2 to the Building Societies Act 1986 shall have effect with the following modifications—

(a) in paragraph 4(2)(b) (statutory declaration by secretary with respect to alteration) for the words from “a resolution” to the end there shall be substituted “section 17(2) of the Deregulation and Contracting Out Act 1994 and that the record is a true record of the alteration”,

(b) in paragraph 4(4) (functions of central office on receipt of record of alteration) the words from “and the central office” to “under it” shall be omitted, and

(c) in paragraph 16(3) (declaration by society of non-anticipation of powers) in paragraphs (a) and (b), the words “and expired with the date of the meeting at which the power was adopted” shall be omitted.