The Building Societies (Designation of Qualifying Bodies) Order 1995

Title and commencement

1.  This Order may be cited as the Building Societies (Designation of Qualifying Bodies) Order 1995 and shall come into force on 1st June 1995.

Interpretation

2.  In this Order—

“the Act” means the Building Societies Act 1986;

“body” means a body corporate of the description specified in column 1 of Part I of the Schedule;

“the relevant power” means the power of investment or investment and support;

“the Schedule” means the Schedule to this Order; and

“society” means a building society.

Designation of bodies corporate

3.—(1) Any body corporate of the description specified in column 1 of Part I of the Schedule 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 the Schedule—

(a) the corresponding item in column 2 specifies the meaning of that description for the purposes of this Order,

(b) the corresponding item in column 3 specifies what the body is designated as suitable for,

(c) the corresponding item in column 4 specifies the purposes for which (in addition to the purposes permitted by section 18(4) of the Act and paragraph (2) below) 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 conditions subject to which the exercise of the relevant power by a society is permitted in relation to that body.

(2) In addition to the purposes specified in column 4, the exercise of the relevant power by the society is also permitted for the purpose of enabling the body to carry on any additional activities which it is within the power of that body to carry on under its memorandum and articles of association (or equivalent constitutional document), provided that those activities—

(a) do not extend to activities referred to in paragraph 2(2) of Part II of the Schedule which would prevent a body corporate from being a body (as defined in article 2 above), and

(b) are carried on together with activities mentioned in column 4 in relation to that body.

(3) Part II of the Schedule shall have effect—

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

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

Amendment of earlier Orders

4.—(1) The Building Societies (Designation of Qualifying Bodies) Order 1993(1) shall be amended—

(a) in paragraph 1 of Part II of Schedule 1 (meaning of “specified type of body corporate”) by the insertion after sub-paragraph (a) of the following sub-paragraph—

“(aa) a company or industrial and provident society,”;

(b) by the substitution for paragraph 4(2)(b) of that Part of that Schedule (which currently restricts a funding body from carrying on a deposit-taking business in the United Kingdom) of the words “it carries on the business of trading in derivatives”; and

(c) by the substitution for paragraph 6 of that Part of that Schedule (definitions) of the following—

“Other definitions

6.   In this Schedule—

• “market maker” means—

  (a)

  in relation to the United Kingdom, a person who—

  (i)

  holds himself out at all normal times in compliance with the rules of the Stock Exchange as willing to buy and sell securities of a particular kind at a price specified by him, and

  (ii)

  is recognised as doing so by the Council of the Stock Exchange; or

  (b)

  in relation to any country or territory outside the United Kingdom, a person who holds himself out at all normal times as willing to buy and sell at a price specified by him securities of a particular kind which are traded on any exchange in that country or territory;

• “the Stock Exchange” means The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited; and

• “trading in derivatives” means trading as principal in any investment of a description falling within one or more of paragraphs 4 (instruments entitling to shares or securities), 7 (options), 8 (futures) and 9 (contracts for differences) of Part I of Schedule 1 to the Financial Services Act 1986(2).”.

(2) The Building Societies (Designation of Qualifying Bodies) (No. 3) Order 1993(3) shall be amended—

(a) in column 4 of item 9 of Part I of the Schedule (purposes for which investment and support of a lending body is permitted) by the insertion of the words “and to accept deposits” after the words “this item”;

(b) by the substitution for paragraph 6(2)(b) of Part II of the Schedule (which currently restricts designated bodies from carrying on a deposit-taking business in the United Kingdom) of the words “it carries on the business of trading in derivatives”; and

(c) in paragraph 14 of the Schedule—

(i) by the deletion of the definitions of “investment” and “market maker in securities of a particular kind”;

(ii) by the substitution for the definition of “market maker” of the following—

• ““market maker” means—

  (a)

  in relation to the United Kingdom, a person who—

  (i)

  holds himself out at all normal times in compliance with the rules of the Stock Exchange as willing to buy and sell securities of a particular kind at a price specified by him, and

  (ii)

  is recognised as doing so by the Council of the Stock Exchange; or

  (b)

  in relation to any country or territory outside the United Kingdom, a person who holds himself out at all normal times as willing to buy and sell at a price specified by him securities of a particular kind which are traded on any exchange in that country or territory.”;

(iii) by the insertion after the definition of “relevant investment business” of the following definition—

““the Stock Exchange” means The International Stock Exchange of the United Kingdom and the Republic of Ireland Limited;”; and

(iv) by the insertion after the definition of “subsidiary” and “subsidiary undertaking” of the following further definition—

““trading in derivatives” means trading as principal in any investment of a description falling within one or more of paragraphs 4 (instruments entitling to shares or securities), 7 (options), 8 (futures) and 9 (contracts for differences) of Part I of Schedule 1 to the Financial Services Act 1986.”.

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 25th April 1995.

J. Dennis

Secretary to the Commission

We consent to this Order,

D. Conway

T. Wood

Two of the Lords Commissioners of Her Majesty’s Treasury

2nd May 1995