The Building Societies (Designation of Qualifying Bodies) (No. 3) Order 1993

Title and commencement

1.  This Order may be cited as the Building Societies (Designation of Qualifying Bodies) (No. 3) Order 1993 and shall come into force on 1st December 1993.

Interpretation

2.  In this Order, except where the context otherwise requires–

“the Act” means the Building Societies Act 1986;

“body” means the body corporate individually specified or a body corporate of a description specified in column 1 of Part I of the Schedule to this Order;

“the relevant power”, in relation to a body, means the power for the exercise of which, as specified in column 3 of Part I of the Schedule to this Order, that body is designated as suitable, and

“society” means a building society.

Designation of bodies corporate

3.—(1) The body corporate individually specified or each body corporate of a description specified in column 1 of Part I of the Schedule to this Order is designated for the purposes of section 18 of the Act (power to invest in subsidiaries and other associated bodies) and within that Part of that Schedule–

(a) the corresponding item in column 2 specifies, if that body is individually specified, the body’s registration number under the Companies Act 1985(1) or, in the case of every other body, the meaning of the description so specified in column 1 for the purposes of this Order;

(b) the corresponding item in column 3 specifies whether that body is designated–

(i) as suitable for investment and support, (and not for support in the absence of investment), or

(ii) as suitable for investment and support or support,

for the avoidance of doubt a society may invest in a body without giving that body support notwithstanding which of the powers referred to in sub–paragraphs (i) and (ii) above is exercised by a society;

(c) the corresponding item (if any) in column 4 specifies the purposes for which (in addition to the purposes permitted by section 18(4) of the Act) the exercise of the relevant power by a society is permitted in relation to that body, and

(d) the corresponding item in column 5 specifies the limits (if any) on the extent to which, and the conditions (if any) subject to which, the exercise of the relevant power by a society is permitted in relation to that body.

(2) Part II of the Schedule to this Order shall have effect–

(a) so as to supplement Part I thereof, and

(b) in respect of the interpretation of that Schedule.

Revocation and savings

4.—(1) Subject to paragraph (2) below, the Building Societies (Designation of Qualifying Bodies) Order 1990(2), the Building Societies (Designation of Qualifying Bodies) Order 1991(3), the Building Societies (Designation of Qualifying Bodies) (Amendment) Order 1991(4), the Building Societies (Designation of Qualifying Bodies) (No. 2) Order 1991(5), the Building Societies (Designation of Qualifying Bodies) Order 1992(6), the Building Societies (Designation of Qualifying Bodies) (No. 2) Order 1992(7), the Building Societies (Designation of Qualifying Bodies) (No. 3) Order 1992(8), and the Building Societies (Designation of Qualifying Bodies) (No. 4) Order 1992(9) are hereby revoked.

(2) Any power which has been adopted for the purposes of any Order revoked by this Order may be exercised by a society as long as that power continues to be specified in that society’s memorandum, but, notwithstanding the foregoing, that power shall cease to be exercisable three years after the date this Order comes into force.

Amendments of the Building Societies (Designation of Qualifying Bodies) Order 1993

5.  The Building Societies (Designation of Qualifying Bodies) Order 1993(10) shall be amended in Schedule 1 as follows–

(1) in column 2 of Part I by–

(a) deleting the words “which is a subsidiary of the society,” and

(b) in paragraph (a) by substituting for the words “borrowing money and receiving deposits” the words “borrowing money or receiving deposits, or both,”;

(2) in Part II by–

(a) substituting for paragraph 2 the following new paragraph:

“2.   In this Schedule “the standard asset provision” means a condition to the effect that–

(a) the relevant power is not available to a society which does not for the time being have a qualifying asset holding, unless the society is one to which sub–paragraph (b) below applies;

(b) the society is a successor to two or more societies which have amalgamated and that society does not have a qualifying asset holding by reason only that it does not have any annual accounts as referred to in section 118(2) of the Act, provided that at least one society to which the amalgamated society is a successor had a qualifying asset holding immediately before the specified date referred to in section 93(3)(b) of the Act;

(c) the cessation of the availability of the relevant power to such a society as is referred to in sub–paragraph (a) or (b) above because that society no longer has a qualifying asset holding does not require the disposal of any property or rights.”;

(b) in paragraph 4 by–

(i) deleting “or” in paragraph (c);

(ii) by inserting “the issued” before “shares” and substituting “support, or” for “support.” in paragraph (d), and

(iii) inserting the following new paragraph after paragraph (d):

“(e) it raises non–retail funds and deposits within the meaning of section 7(4) of the Act and is not a subsidiary of that society.”.

Amendments of the Building Societies (Designation of Qualifying Bodies) (No. 2) Order 1993

6.  The Building Societies (Designation of Qualifying Bodies) (No. 2) Order 1993(11) shall be amended in Part II of the Schedule as follows:

(1) in paragraph 1 by substituting for paragraph 1 the following new paragraph:

“1.   In this Schedule “the standard asset provision” means a condition to the effect that–

(a) the relevant power is not available to a society which does not for the time being have a qualifying asset holding, unless the society is one to which sub– paragraph (b) below applies;

(b) the society is a successor to two or more societies which have amalgamated and that society does not have a qualifying asset holding by reason only that it does not have any annual accounts as referred to in section 118(2) of the Act, provided that at least one society to which the amalgamated society is a successor had a qualifying asset holding immediately before the specified date referred to in section 93(3)(b) of the Act;

(c) the cessation of the availability of the relevant power to such a society as is referred to in sub–paragraph (a) or (b) above because that society no longer has a qualifying asset holding does not require the disposal of any property or rights.”;

(2) by substituting for paragraph 3 the following new paragraph:

“3.   In this Schedule “a single tier organisation” is a body which does not have the capacity to hold 5% or more of the issued shares or corresponding membership rights in another body corporate, and all the shares or corresponding membership rights which the body holds in another body corporate have been obtained by the body in the course of carrying on mortgage indemnity insurance business.”;

(3) in paragraph 4(1)–

(a) in the definition of advance by inserting after the words “means any advance” the words “, or any loan corresponding to an advance,”;

(b) by inserting after “society” in the definition of “mortgagor” the words “or any subsidiary of the society,”;

(4) by substituting for paragraph 4(2) the following new sub–paragraph–

“(2) In this Schedule, “carrying on mortgage indemnity insurance business” means entering into an agreement (“the agreement”) with a society or any subsidiary of a society, whereby the body, subject to the conditions specified below, agrees to indemnify the society, or, as the case may be, the subsidiary, against loss incurred by the society, or, as the case may be, the subsidiary, but, in respect of a subsidiary, only for loss incurred while that body corporate is a subsidiary of a society.”;

(5) in paragraph 4(3)(ii)–

(a) by inserting after the words “the society” the words “, or, as the case may be, the subsidiary,”, and

(b) by substituting for the words “in respect of which that advance has been made” the words “which was to secure that advance at the time that advance was made.”.

In witness whereof the common seal of the Building Societies Commission is hereto fixed, and is authenticated by me, a person authorised under paragraph 14 of Schedule 1 to the Building Societies Act 1986, on 21st October 1993.

T. F. Mathews

Member of the Commision

We consent to this Order,

Nicholas Baker

Timothy Kirkhope

Two of the Lords Commissioners of Her Majesty’s Treasury

29th October 1993