Hyperlawhypertext legal database Building Societies Act 1997 current to 2015-12-30

UKPGA-1997-32 Building Societies Act 1997 UK

Current to 2015-12-30

Contents
preamble

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:—

Part I

Constitution and powers

s. 1 — Principal purpose and powers.
s. 1(1)

For subsection (1) of section 5 (establishment, constitution and powers) of the Building Societies Act 1986 (“the 1986 Act”) there shall be substituted the following subsection—

s. 1(2)

After subsection (4) of that section there shall be inserted the following subsection—

s. 1(3)

For subsections (5) to (7) of that section there shall be substituted the following subsection—

s. 1(4)

For subsection (10) of that section there shall be substituted the following subsection—

s. 2 — Membership and liability of members.
s. 2(1)

In paragraph 5 of Schedule 2 to the 1986 Act (membership), for sub-paragraphs (1) and (2) there shall be substituted the following sub-paragraphs—

s. 2(2)

In sub-paragraph (3) of that paragraph—

s. 2(2)(a)

in paragraph (b), after the words “may not” there shall be inserted the words “ propose a resolution, ”; and

s. 2(2)(b)

in paragraph (c), after the words “may not” there shall be inserted the words “ join in requisitioning a special meeting or ”.

s. 2(3)

For paragraph 6 of that Schedule there shall be substituted the following paragraph—

s. 2(4)

For sub-paragraph (2) of paragraph 29 of that Schedule (borrowing members’ resolutions) there shall be substituted the following sub-paragraph—

s. 3 — Capacity etc.
s. 3(1)

In subsection (8) of section 5 of the 1986 Act—

s. 3(1)(a)

for paragraph (b) there shall be substituted the following paragraph—; and

s. 3(1)(b)

for the words from “and in this section” to the end there shall be substituted the words “ and in this section “scheduled”, with reference to requirements for establishment, means contained in that Schedule ”.

s. 3(2)

For Part II of Schedule 2 to the 1986 Act there shall be substituted the provisions set out in Schedule 1 to this Act (capacity of society and power of directors to bind it).

s. 4 — The lending limit.

For section 6 of the 1986 Act there shall be substituted the following section—

s. 5 — Loans secured on land.

After section 6 of the 1986 Act there shall be inserted the following section—

s. 6 — Loans fully secured on land.

After section 6A of the 1986 Act there shall be inserted the following section—

s. 7 — Discharge of mortgages.
s. 7(1)

After section 6B of the 1986 Act there shall be inserted the following section—

s. 7(2)

After Schedule 2 to the 1986 Act there shall be inserted, as Schedule 2A, the provisions set out in Schedule 2 to this Act (supplementary provisions as to the discharge of mortgages).

s. 8 — The funding limit.

For section 7 of the 1986 Act there shall be substituted the following section—

s. 9 — Raising funds and borrowing.

For section 8 of the 1986 Act there shall be substituted the following section—

s. 10 — Restrictions on certain transactions.

After section 9 of the 1986 Act there shall be inserted the following section—

s. 11 — Restriction on creation of floating charges.

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

s. 12 — Superseded provisions of 1986 Act.
s. 12(1)

The following provisions of the 1986 Act (which are superseded by the foregoing provisions of this Part and this section) shall cease to have effect, namely—

s. 12(1)(a)

Part III (advances, loans and other assets);

s. 12(1)(b)

section 33 (assistance to other building societies);

s. 12(1)(c)

Part V (powers to provide services); and

s. 12(1)(d)

sections 38 to 40 (power to determine extent of building society powers).

s. 12(2)

In relation to any time after Schedule 4 to the 1986 Act ceases to have effect by virtue of subsection (1) above, any rule of law requiring a mortgagee to take reasonable care to obtain a proper price or true market value shall have effect as if paragraph 1(1)(a) of that Schedule (duty to take reasonable care to ensure best price that can reasonably be obtained), and corresponding earlier enactments, had not been enacted.

s. 12(3)

In so far as a building society is carrying on any activity comprised in the provision of a banking service, it shall be treated for all purposes—whether or not it would be so treated apart from this subsection.

s. 12(3)(a)

as a bank and a banker; and

s. 12(3)(b)

as carrying on the business of banking or a banking undertaking,

s. 12(4)

In this section “mortgagee”, as respects Scotland, has the meaning given by section 119(2) of the 1986 Act.

Part II

Powers of control of Commission

s. 13 — Power to direct restructuring of business etc.
s. 13(1)

For section 36 of the 1986 Act there shall be substituted the following section—

s. 13(2)

After Schedule 7 to the 1986 Act there shall be inserted, as Schedule 7A, the provisions set out in Schedule 3 to this Act (supplementary provisions as to directions).

s. 14 — Power to make prohibition orders.

After section 36 of the 1986 Act there shall be inserted the following section—

s. 15 — Powers to petition for winding up etc.

For section 37 of the 1986 Act there shall be substituted the following section—

s. 16 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 17 — Power to direct transfers of engagements or business.
s. 17(1)

After section 42A of the 1986 Act there shall be inserted the following section—

s. 17(2)

Immediately before Schedule 9 to the 1986 Act there shall be inserted, as Schedule 8A, the provisions set out in Schedule 4 to this Act (transfer directions: modifications of Part X).

s. 18 — Notification and confirmation of transfer directions.

After section 42B of the 1986 Act there shall be inserted the following section—

s. 19 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 20 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 21 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 22 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 23 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 24 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part III

Accountability to members

s. 25 — Special meeting on members’ requisition.

After paragraph 20 of Schedule 2 to the 1986 Act there shall be inserted the following paragraph—

s. 26 — Failure to comply with members’ requisition.

After paragraph 20A of Schedule 2 to the 1986 Act there shall be inserted the following paragraph—

s. 27 — Election of directors: general.
s. 27(1)

In subsection (1) of section 60 of the 1986 Act (directors: elections and retirements), for paragraph (a) there shall be substituted the following paragraph—.

s. 27(2)

After that subsection there shall be inserted the following subsection—

s. 27(3)

For subsection (3) of that section there shall be substituted the following subsections—

s. 27(4)

In subsection (4) of that section, for the words “any person” there shall be substituted the words “ any natural person ”.

s. 27(5)

In subsection (10) of that section, for paragraph (b) there shall be substituted the following paragraph—.

s. 27(6)

After that subsection there shall be inserted the following subsection—

s. 27(7)

In subsection (17) of that section, the definition of “ordinary resolution” shall cease to have effect.

s. 28 — Election of directors: supplementary.
s. 28(1)

For subsections (1) and (2) of section 61 of the 1986 Act (directors: supplementary provisions as to elections etc.) there shall be substituted the following subsections—

s. 28(2)

For subsection (4) of that section there shall be substituted the following subsections—

s. 28(3)

In subsection (7) of that section—

s. 28(3)(a)

for the words from “If” to “nominations” there shall be substituted the words “ If, 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 ”; and

s. 28(3)(b)

in paragraph (a), after the words “the address” there shall be inserted the words “ or, as the case may require, the revised address ”.

s. 28(4)

In subsection (8) of that section—

s. 28(4)(a)

after the words “an address”, in both places where they occur, there shall be inserted the words “ or a revised address ”; and

s. 28(4)(b)

after the words “the address” there shall be inserted the words “ or revised address ”.

s. 29 — Acquisition or establishment of a business.

After section 92 of the 1986 Act there shall be inserted the following section—

s. 30 — Information about transfers or proposed transfers of business.
s. 30(1)

In subsection (1) of section 98 of the 1986 Act (transfers of business: supplementary provisions), after the word “statements” there shall be inserted the words “ or summaries ”.

s. 30(2)

After that subsection there shall be inserted the following subsection—

s. 30(3)

For Part I of Schedule 17 to the 1986 Act there shall be substituted, as Parts I and IA, the provisions set out in Parts I and II respectively of Schedule 5 to this Act (information about transfers or proposed transfers of business).

s. 31 — Transfers of business: increased remuneration etc.

After section 99 of the 1986 Act there shall be inserted the following section—

Part IV

Protection of investors and investigation of complaints

s. 32 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 33 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 34 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 35 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Part V

Miscellaneous and supplemental

Miscellaneous

s. 36 — Registered and business names.
s. 36(1)

For sub-paragraph (2) of paragraph 9 of Schedule 2 to the 1986 Act (building society not to use any name or title other than registered name) there shall be substituted the following sub-paragraphs—

s. 36(2)

After sub-paragraph (7) of that paragraph there shall be inserted the following sub-paragraph—

s. 36(3)

For paragraph 10 of Schedule 2 to the 1986 Act (offences relating to society name) there shall be substituted the following paragraph—

s. 36(4)

After that paragraph there shall be inserted the following paragraphs—

s. 37 — Access to registers of members.
s. 37(1)

For sub-paragraphs (1) and (2) of paragraph 15 of Schedule 2 to the 1986 Act (right of members to obtain particulars from register) there shall be substituted the following sub-paragraphs—

s. 37(2)

After sub-paragraph (6) of that paragraph there shall be inserted the following sub-paragraphs—

s. 38 — Transactions with directors and persons connected with them.

After section 66 of the 1986 Act there shall be inserted the following section—

s. 39 — Application of certain insolvency legislation.
s. 39(1)

After section 90 of the 1986 Act there shall be inserted the following section—

s. 39(2)

After Schedule 15 to the 1986 Act there shall be inserted, as Schedule 15A, the provisions set out in Schedule 6 to this Act (application of other companies insolvency legislation to building societies).

s. 40 — Abolition of priority liquidation distribution rights.

In section 100 of the 1986 Act (distribution and share rights), the following provisions (which confer rights to priority liquidation distributions) shall cease to have effect, namely—

s. 40(a)

in subsection (2), paragraph (c) and the word “and” immediately before that paragraph; and

s. 40(b)

subsections (5) and (6).

s. 41 — Protective provisions for specially formed successors.

For section 101 of the 1986 Act there shall be substituted the following section—

s. 42 — Registration of charges by building societies.

After section 104 of the 1986 Act there shall be inserted the following section—

s. 43 — Other amendments of 1986 Act.

Schedule 7 to this Act (which contains other amendments of the 1986 Act including some that are minor amendments or amendments consequential on the foregoing provisions of this Act) shall have effect.

Supplemental

s. 44 — . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
s. 45 — Minor and consequential amendments.
s. 45(1)

In section 10 of the Bankers’ Books Evidence Act 1879 (interpretation of “legal proceeding” etc.), in the definition of “legal proceeding” for the words from “an arbitration” to the end there shall be substituted the following paragraphs—

s. 45(2)

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

s. 46 — Transitional provisions, savings and repeals etc.
s. 46(1)

The transitional provisions and savings contained in Schedule 8 to this Act shall have effect; but those provisions and savings are without prejudice to sections 16 and 17 of the Interpretation Act 1978 (effect of repeals).

s. 46(2)

The enactments and instruments specified in Schedule 9 to this Act are hereby repealed or revoked to the extent specified in the third column of that Schedule.

s. 47 — Short title, interpretation, commencement and extent.
s. 47(1)

This Act may be cited as the Building Societies Act 1997.

s. 47(2)

In this Act “the 1986 Act” means the Building Societies Act 1986 and expressions which are also used in that Act have the same meanings as in that Act.

s. 47(3)

This Act, except—shall come into force on such day as the Treasury may by order made by statutory instrument appoint, and different days may be appointed for different purposes or for building societies of different descriptions.

s. 47(3)(a)

sections 40 and 41 above;

s. 47(3)(b)

paragraphs 9 and 10 of Schedule 8 to this Act and section 46(1) above so far as relating to those paragraphs; and

s. 47(3)(c)

section 46(2) above and Schedule 9 to this Act so far as relating to the repeals in section 100 of the 1986 Act and the revocations in the Building Societies (Transfer of Business) Regulations 1988,

s. 47(4)

Where any enactment amended or repealed by this Act extends to any part of the United Kingdom, the amendment or repeal extends to that part.

s. 47(5)

Subject to subsection (4) above, this Act extends to Northern Ireland.

Sch 1

[Part II of Schedule 2 to 1986 Act]

Sch 2

[Schedule 2a to 1986 Act]

Sch 3

. . .

Sch 4

[Schedule 8a to 1986 Act]

Sch 5

Information about transfers or proposed transfers of business

Sch 5

[Part I of Schedule 17 to 1986 Act]

Sch 5

[Part IA of Schedule 17 to 1986 Act]

Sch 6

[Schedule 15a to 1986 Act]

Sch 7

Other amendments of 1986 Act

The Building Societies Commission

Sch 7 para 1

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

Annual and other reports

Sch 7 para 2

In section 4 of the 1986 Act (annual and other reports), subsection (2) shall cease to have effect.

Authorisation to raise funds and borrow money

Sch 7 para 3

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

The Building Societies Investor Protection Board

Sch 7 para 4

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

The Investor Protection Fund

Sch 7 para 5

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

Meaning of “insolvency” etc.

Sch 7 para 6

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

Payments to investors

Sch 7 para 7

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

Membership of insolvency committees etc

Sch 7 para 8

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

Liability of insolvent society in respect of payments made by Board

Sch 7 para 9

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

Power to obtain information

Sch 7 para 10

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

Voluntary schemes

Sch 7 para 11

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

Power to direct application to renew authorisation

Sch 7 para 12

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

Imposition of conditions on current authorisation

Sch 7 para 13

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

Revocation of authorisation

Sch 7 para 14

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

Reauthorisation

Sch 7 para 15

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

Powers to avoid apparent association with other bodies

Sch 7 para 16

Section 51 of the 1986 Act (powers to avoid apparent association with other bodies) shall cease to have effect.

Powers to obtain information and documents etc.

Sch 7 para 17
Sch 7 para 17(1)

In subsection (1)(a) of section 52 of the 1986 Act (powers to obtain information and documents etc.), after the words “section 9,” there shall be inserted the words “ Part IV, ”.

Sch 7 para 17(2)

In subsection (2) of that section—

Sch 7 para 17(2)(a)

for the words “subsidiaries or other associated bodies” there shall be substituted the words “ connected undertakings ”; and

Sch 7 para 17(2)(b)

for the words “subsidiary or associated body” there shall be substituted the words “ connected undertaking ”.

Sch 7 para 17(3)

Subsection (3) of that section shall cease to have effect.

Sch 7 para 17(4)

In subsection (4) of that section—

Sch 7 para 17(4)(a)

for the words “subsidiary of or other body associated with” there shall be substituted the words “ connected undertaking of ”;

Sch 7 para 17(4)(b)

for the words “that body” there shall be substituted the words “ that undertaking ”; and

Sch 7 para 17(4)(c)

for the words “subsidiary or associated body” there shall be substituted the words “ connected undertaking ”.

Sch 7 para 17(5)

In subsection (5) of that section—

Sch 7 para 17(5)(a)

for the words “subsidiary or associated body” there shall be substituted the words “ or connected undertaking ”;

Sch 7 para 17(5)(b)

for the words “the body”, in each place where they occur, there shall be substituted the words “ the society or undertaking ”; and

Sch 7 para 17(5)(c)

in paragraph (d), for the words “accountant approved by the Commission” there shall be substituted the words “ approved accountant or other person with relevant professional skill ”.

Sch 7 para 17(6)

For subsection (6) of that section there shall be substituted the following subsections—

Sch 7 para 17(7)

For subsection (9) of that section there shall be substituted the following subsection—

Sch 7 para 17(8)

For subsection (13) of that section there shall be substituted the following subsection—

Right of entry to obtain information and documents

Sch 7 para 18

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

Confidentiality of information obtained by Commission

Sch 7 para 19

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

Information disclosed to Commission from other sources

Sch 7 para 20

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

Investigations on behalf of Commission

Sch 7 para 21

In subsection (2) of section 55 of the 1986 Act (investigations on behalf of Commission), for paragraphs (a) and (b) there shall be substituted the words “ a connected undertaking of the building society under investigation ”.

Inspections and special meetings: general

Sch 7 para 22
Sch 7 para 22(1)

In subsection (1) of section 56 of the 1986 Act (inspections and special meetings: general), for the words “subsidiary of or body associated with” there shall be substituted the words “ connected undertaking of ”.

Sch 7 para 22(2)

In subsections (3) and (4) of that section—

Sch 7 para 22(2)(a)

for the words “subsidiary of or body associated with” there shall be substituted the words “ connected undertaking of ”; and

Sch 7 para 22(2)(b)

for the words “subsidiary or associated body” there shall be substituted the words “ connected undertaking ”.

Sch 7 para 22(3)

In subsections (6) and (8) of that section, for the words “subsidiary or associated body” there shall be substituted the words “ connected undertaking ”.

Inspections: supplementary provisions

Sch 7 para 23

In subsection (1) of section 57 of the 1986 Act (inspections: supplementary provisions), for the words “subsidiary of or body associated with”, in both places where they occur, there shall be substituted the words “ connected undertaking of ”.

Restrictions on loans etc. to directors

Sch 7 para 24
Sch 7 para 24(1)

In subsection (1) of section 65 of the 1986 Act (restrictions on loans etc. to directors)—

Sch 7 para 24(1)(a)

in paragraph (a), for the words “an advance or other loan” there shall be substituted the words “ a loan ”; and

Sch 7 para 24(1)(b)

in paragraph (c), for the words “any services for the time being specified in Part I of Schedule 8 to this Act” there shall be substituted the words “ any service of a kind which is provided by building societies for individuals in the ordinary course of business ”.

Sch 7 para 24(2)

In subsection (10) of that section—

Sch 7 para 24(2)(a)

the word “and” immediately following the definition of “provision of funds” shall cease to have effect; and

Sch 7 para 24(2)(b)

after the definition of “relevant” there shall be inserted the following definition—

Directors etc. not to accept commissions in connection with loans

Sch 7 para 25
Sch 7 para 25(1)

In subsection (1) of section 67 of the 1986 Act (directors etc. not to accept commissions in connection with loans), for the word “advances” there shall be substituted the word “ loans ”.

Sch 7 para 25(2)

In subsection (5) of that section, for the words “an additional advance”, “an advance” and “the advance” there shall be substituted the words “ an additional loan ”, “ a loan ” and “ the loan ” respectively.

Sch 7 para 25(3)

In subsection (7) of that section, for the words “an advance” there shall be substituted the words “ a loan ”.

Records of loans etc. for directors

Sch 7 para 26

In subsection (6) of section 68 of the 1986 Act (records of loans etc. for directors), for the words “the prescribed fee” there shall be substituted the words “ such fee (not exceeding £5) as the society may from time to time determine ”.

Sch 7 para 27
Sch 7 para 27(1)

In subsection (2) of section 69 of the 1986 Act (records of income of related businesses)—

Sch 7 para 27(1)(a)

in paragraph (b), for the word “advances” there shall be substituted the word “ loans ”; and

Sch 7 para 27(1)(b)

for paragraph (c) there shall be substituted the following paragraph—.

Sch 7 para 27(2)

In subsections (7)(b) and (8) of that section, after the words “its directors” there shall be inserted the words “ and other officers ”.

Sch 7 para 27(3)

In subsection (15) of that section, for the words “the prescribed fee” there shall be substituted the words “ such fee (not exceeding £5) as the society may from time to time determine ”.

Interpretation of Part VII

Sch 7 para 28

In subsection (3)(a) of section 70 of the 1986 Act (interpretation of Part VII), after the words “of his” there shall be inserted the words “ but does not include any person who has attained the age of 18 ”.

Accounting records and systems of business control etc.

Sch 7 para 29
Sch 7 para 29(1)

In subsection (3)(c) of section 71 of the 1986 Act (accounting records and systems of business control etc.), for the words “any provision of Part II or Part III” there shall be substituted the words “ section 6 or 7 ”.

Sch 7 para 29(2)

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

Sch 7 para 29(3)

In subsection (10) of that section, for the following, namely—there shall be substituted the words “ connected undertakings ”.

Sch 7 para 29(3)(a)

the words “subsidiary undertakings or other associated bodies linked by resolution”;

Sch 7 para 29(3)(b)

the words “subsidiary undertakings or other associated bodies”; and

Sch 7 para 29(3)(c)

the words “subsidiary undertakings and other associated bodies”,

Sch 7 para 29(4)

Subsection (10A) of that section shall cease to have effect.

Contents and form of annual accounts

Sch 7 para 30

In subsection (8)(c) of section 73 of the 1986 Act (contents and form of annual accounts), for the words “bodies associated with them” there shall be substituted the words “ their associated undertakings ”.

Duty of directors to prepare annual business statement

Sch 7 para 31

In subsection (2) of section 74 of the 1986 Act (duty of directors to prepare annual business statement), for the words “subsidiary undertakings or associated bodies”, in both places where they occur, there shall be substituted the words “ connected undertakings ”.

Directors’ report

Sch 7 para 32
Sch 7 para 32(1)

In subsection (1) of section 75 (directors’ report)—

Sch 7 para 32(1)(a)

in paragraph (b), for the words “subsidiary undertakings or other bodies associated with it” there shall be substituted the words “ connected undertakings ”; and

Sch 7 para 32(1)(b)

for paragraph (c) there shall be substituted the following paragraph—

Sch 7 para 32(2)

After that subsection there shall be inserted the following subsection—

Sch 7 para 32(3)

In subsection (2) of that section—

Sch 7 para 32(3)(a)

for the words “subsidiary undertakings or other associated bodies” there shall be substituted the words “ connected undertakings ”; and

Sch 7 para 32(3)(b)

for the words “subsidiary undertakings and associated bodies” there shall be substituted the words “ connected undertakings ”.

Sch 7 para 32(4)

In subsection (4) of that section, for the words from “the prescribed information” to “regulations” there shall be substituted the words “ the review, information and statement required by subsection (1) above and, where applicable, the review required by subsection (2) above ”.

Summary financial statement for members and depositors

Sch 7 para 33
Sch 7 para 33(1)

In subsection (2) of section 76 of the 1986 Act (summary financial statement for members and depositors)—

Sch 7 para 33(1)(a)

for the words “subsidiary undertakings or other associated bodies” there shall be substituted the words “ connected undertakings ”; and

Sch 7 para 33(1)(b)

for the words “subsidiary undertakings and other associated bodies” there shall be substituted the words “ connected undertakings ”.

Sch 7 para 33(2)

In subsection (9)(a) of that section, for paragraph (a) there shall be substituted the following paragraph—.

Auditor’s report and powers

Sch 7 para 34
Sch 7 para 34(1)

In subsection (4) of section 79 of the 1986 Act (auditor’s report and powers), for the words “subsidiary undertaking”, in each place where they occur, there shall be substituted the words “ connected undertaking ”.

Sch 7 para 34(2)

Subsection (5) of that section shall cease to have effect.

Sch 7 para 34(3)

In subsection (9) of that section, for the words “subsidiary undertaking of or is associated with” there shall be substituted the words “ connected undertaking of ”.

Sch 7 para 35

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

Investigation of complaints: supplementary provisions

Sch 7 para 36

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

Settlement of disputes

Sch 7 para 37

In subsection (1) of section 85 of the 1986 Act (settlement of disputes), for the words “a depositor with the society” there shall be substituted the words “ one or more members of the society or a complainant ”.

Sch 7 para 38

In subsection (8) of section 87 of the 1986 Act (dissolution by consent), for the words “or to a company” there shall be substituted the words “ or the transfer of its business to a company ”.

Winding up: grounds and petitioners

Sch 7 para 39

In subsection (4) of section 89 of the 1986 Act (winding up: grounds and petitioners), for paragraph (b) there shall be substituted the following paragraph—

Winding up or dissolution: supplementary

Sch 7 para 40

For section 92 of the 1986 Act there shall be substituted the following section—

Amalgamations

Sch 7 para 41

In subsection (2) of section 93 of the 1986 Act (amalgamations)—

Sch 7 para 41(a)

for paragraph (a) there shall be substituted the following paragraph—; and

Sch 7 para 41(b)

for paragraph (c) there shall be substituted the following paragraph—.

Transfer of engagements

Sch 7 para 42

In subsections (2), (4) and (5) of section 94 of the 1986 Act (transfer of engagements), for the words “special resolution” there shall be substituted the words “ shareholding members’ resolution ”.

Mergers: provisions supplementing sections 93 and 94

Sch 7 para 43
Sch 7 para 43(1)

In subsection (3) of section 95 of the 1986 Act (mergers: provisions supplementing sections 93 and 94), for the words “subsections (4) to (9)” there shall be substituted the words “ subsections (4) to (6) ”.

Sch 7 para 43(2)

Subsections (7) to (9) of that section shall cease to have effect.

Mergers: compensation for loss of office etc.

Sch 7 para 44
Sch 7 para 44(1)

In subsection (1) of section 96 (mergers: compensation for loss of office etc.)—

Sch 7 para 44(1)(a)

in paragraph (a), for the words “the resolution” there shall be substituted the words “ one of the two resolutions ”; and

Sch 7 para 44(1)(b)

in paragraph (b), for the words “the special resolution” there shall be substituted the words “ the two resolutions ”.

Sch 7 para 44(2)

In subsection (4) of that section, for the words “the special resolution”, in both places where they occur, there shall be substituted the words “ each of the two resolutions ”.

Sch 7 para 44(3)

In subsection (6) of that section, for the words “a special resolution of the society” there shall be substituted the words “ the two resolutions required by section 94(5)(a) ”.

Sch 7 para 44(4)

In subsection (8) of that section, in the definition of “loss of office”, for the words “a subsidiary of that society or in an associated body” there shall be substituted the words “ any other body ”.

Transfer of business to commercial company

Sch 7 para 45
Sch 7 para 45(1)

In subsection (2) of section 97 of the 1986 Act (transfer of business to commercial company), after the words “section 99,” there shall be inserted the words “ section 99A, ”.

Sch 7 para 45(2)

In subsection (3) of that section, the words from “and for the purposes” to the end shall cease to have effect.

Sch 7 para 45(3)

In subsection (12) of that section, after the definition of “the requisite protective provisions” there shall be inserted the following definition—.

Sch 7 para 45(4)

After that subsection there shall be inserted the following subsection—

Regulated terms: compensation for loss of office etc.

Sch 7 para 46

In subsection (6) of section 99 of the 1986 Act (regulated terms: compensation for loss of office etc.), in the definition of “loss of office”, for the words “a subsidiary of that society or in an associated body” there shall be substituted the words “ any other body ”.

Distribution and share rights

Sch 7 para 47

In subsection (4) of section 100 of the 1986 Act (distribution and share rights), for the words “requisite transfer resolution” there shall be substituted the words “ requisite shareholders’ resolution ”.

Power to amend etc. to assimilate to company law

Sch 7 para 48

In subsection (2) of section 104 of the 1986 Act (power to amend etc. to assimilate to company law), at the end of paragraph (d) there shall be inserted the words “ or insolvency ”.

Limited power to anticipate future statutory instrument powers

Sch 7 para 49

Section 105 of the 1986 Act (limited power to anticipate future statutory instrument powers) shall cease to have effect.

Power to require building society to change misleading name

Sch 7 para 50

Section 108 of the 1986 Act (power to require building society to change misleading name) shall cease to have effect.

Offences: liability of officers etc.

Sch 7 para 51

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

Qualifying asset holding for certain powers

Sch 7 para 52

Section 118 of the 1986 Act (qualifying asset holding for certain powers) shall cease to have effect.

Interpretation

Sch 7 para 53
Sch 7 para 53(1)

In subsection (1) of section 119 of the 1986 Act (interpretation)—

Sch 7 para 53(1)(a)

the definitions of “adopt”, “adopted”, “adoptable powers”, “advance secured on land”, “advance fully secured on land”, “advance secured on third party land”, “mobile home loan”, “qualifying asset holding”, “subsidiary” and “total commercial assets” shall cease to have effect;

Sch 7 para 53(1)(b)

for the definitions of “associated body”, “associated” and “linked by resolution” there shall be substituted the following definition—;

Sch 7 para 53(1)(c)

for the definitions of “borrowing members’ resolution” and “borrowing member” there shall be substituted the following definitions—;

Sch 7 para 53(1)(d)

after the definition of “the Commission” there shall be inserted the following definition—;

Sch 7 para 53(1)(e)

for the definition of “the court” there shall be substituted the following definition—;

Sch 7 para 53(1)(f)

after the definition of “the criteria of prudent management” there shall be inserted the following definition—;

Sch 7 para 53(1)(g)

for the definition of “deposit” there shall be substituted the following definition—;

Sch 7 para 53(1)(h)

after the definition of “heritable security” there shall be inserted the following definition—;

Sch 7 para 53(1)(i)

after the definition of “Investor Protection Board” there shall be inserted the following definitions—;

Sch 7 para 53(1)(j)

for the definition of “member” there shall be substituted the following definition—;

Sch 7 para 53(1)(k)

for the definition of “mortgage debt” there shall be substituted the following definition—;

Sch 7 para 53(1)(l)

after the definition of “officially notified” there shall be inserted the following definition—

Sch 7 para 53(1)(m)

after the definition of “the repealed enactments” there shall be inserted the following definition—;

Sch 7 para 53(1)(n)

for the definition of “share” there shall be substituted the following definition—; and

Sch 7 para 53(1)(o)

after the definition of “shareholder and depositor” there shall be inserted the following definitions—.

Sch 7 para 53(2)

In subsection (2) of that section, for the word “advances” there shall be substituted the word “ loans ”.

Sch 7 para 53(3)

In subsection (3) of that section—

Sch 7 para 53(3)(a)

in paragraph (a), the words “by him” and “to him” shall cease to have effect; and

Sch 7 para 53(3)(b)

in paragraph (b), for the words “an advance” there shall be substituted the words “ a loan ”.

Sch 7 para 53(4)

After subsection (3) of that section there shall be inserted the following subsection—

Sch 7 para 53(5)

For subsection (4) of that section there shall be substituted the following subsection—

Northern Ireland

Sch 7 para 54

In subsection (1) of section 122 of the 1986 Act (Northern Ireland), the words “section 15,” shall cease to have effect.

The Commission

Sch 7 para 55

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

Establishment, incorporation and constitution

Sch 7 para 56
Sch 7 para 56(1)

Part I of Schedule 2 to the 1986 Act (establishment, incorporation and constitution) shall be amended as follows.

Sch 7 para 56(2)

For sub-paragraph (4) of paragraph 1 (requirements for establishment) there shall be substituted the following sub-paragraph—

Sch 7 para 56(3)

For sub-paragraphs (1) to (3) of paragraph 2 (the memorandum) there shall be substituted the following sub-paragraphs—

Sch 7 para 56(4)

Sub-paragraph (5) of that paragraph shall cease to have effect.

Sch 7 para 56(5)

In sub-paragraph (4) of paragraph 3 (the rules)—

Sch 7 para 56(5)(a)

in item 2 of the Table, for the words “stock or funds of the society is or are” there shall be substituted the words “ funds of the society are ”; and

Sch 7 para 56(5)(b)

in item 5 of the Table, for the word “advances” there shall be substituted the word “ loans ” and for the word “advance” there shall be substituted the word “ loan ”.

Sch 7 para 56(6)

For sub-paragraph (1) of paragraph 4 (requirements for alteration of purpose, powers and rules) there shall be substituted the following sub-paragraph—

Sch 7 para 56(7)

In sub-paragraph (4) of that paragraph, the words “subject to paragraph 19 below” shall cease to have effect.

Sch 7 para 56(8)

In sub-paragraph (1) of paragraph 8 (joint borrowers), for the words “an advance” there shall be substituted the words “ a loan ”.

Sch 7 para 56(9)

In sub-paragraph (1)(b) of paragraph 11 (change of principal office), for the words “then at a general meeting specially called for the purpose in accordance with the rules” there shall be substituted the words “ by an ordinary resolution ”.

Sch 7 para 56(10)

For sub-paragraph (1) of paragraph 13 (register of members) there shall be substituted the following sub-paragraph—

Meetings, resolutions and postal ballots

Sch 7 para 57
Sch 7 para 57(1)

Part III of Schedule 2 to the 1986 Act (meetings, resolutions and postal ballots) shall be amended as follows.

Sch 7 para 57(2)

For sub-paragraph (2) of paragraph 22 (persons entitled to notice of meetings) there shall be substituted the following sub-paragraphs—

Sch 7 para 57(3)

For sub-paragraph (1) of paragraph 23 (members’ entitlement to vote on resolutions) there shall be substituted the following sub-paragraph—

Sch 7 para 57(4)

For sub-paragraphs (3) and (4) of that paragraph there shall be substituted the following sub-paragraphs—

Sch 7 para 57(5)

After sub-paragraph (4) of paragraph 24 (proxies) there shall be inserted the following sub-paragraph—

Sch 7 para 57(6)

In sub-paragraph (5) of that paragraph, after the words “building society,” there shall be inserted the words “ or in complying with sub-paragraph (4A) above in respect of a form of appointment of a proxy, ”.

Sch 7 para 57(7)

In paragraph 26 (special resolutions), after the words “as a special resolution” there shall be inserted the words “ , or as a shareholding members’ resolution, ”.

Sch 7 para 57(8)

After paragraph 27 there shall be inserted the following paragraph—

Sch 7 para 57(9)

For sub-paragraph (1) of paragraph 29 (borrowing members’ resolutions) there shall be substituted the following sub-paragraph—

Sch 7 para 57(10)

In sub-paragraph (2) of paragraph 30 (transfer resolutions)—

Sch 7 para 57(10)(a)

for the words “special resolution”, in both places where they occur, there shall be substituted the words “ shareholding members’ resolution ”; and

Sch 7 para 57(10)(b)

for the words “sub-paragraph (a) or sub-paragraph (b) of paragraph 27(1) above, as the case may be,” there shall be substituted the words “ paragraph 27A above ”.

Sch 7 para 57(11)

In sub-paragraph (3) of that paragraph—

Sch 7 para 57(11)(a)

for the words “special resolution”, in each place where they occur, there shall be substituted the words “ shareholding members’ resolution ”;

Sch 7 para 57(11)(b)

for the words “paragraph 27” there shall be substituted the words “ paragraph 27A ”; and

Sch 7 para 57(11)(c)

the words “has been duly given” shall cease to have effect.

Sch 7 para 57(12)

In sub-paragraph (5) of that paragraph, for the words “special resolution” there shall be substituted the words “ shareholding members’ resolution ”.

Sch 7 para 57(13)

In sub-paragraph (1) of paragraph 31 (members’ rights to propose and circulate resolutions)—

Sch 7 para 57(13)(a)

after the words “other than” there shall be inserted the words “ a shareholding members’ resolution or ”; and

Sch 7 para 57(13)(b)

for the words “100 words” there shall be substituted the words “ 500 words ”.

Sch 7 para 57(14)

In sub-paragraph (1) of paragraph 33 (postal ballots), after the words “resolution of the society”, in the first place where they occur, there shall be inserted the words “ (other than a shareholding members’ resolution or a borrowing members’ resolution) ”.

Sch 7 para 57(15)

For sub-paragraph (5) of that paragraph there shall be substituted the following sub-paragraph—

Sch 7 para 57(16)

For sub-paragraph (2) of paragraph 34 (declarations to be made in proxy and ballot forms) there shall be substituted the following sub-paragraph—

The Building Societies Investor Protection Board

Sch 7 para 58

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

Directors: requisite particulars of restricted transactions

Sch 7 para 59

In paragraph 2(2)(c) of Schedule 9 to the 1986 Act (directors: requisite particulars of restricted transactions), for the words “an advance or other loan” there shall be substituted the words “ a loan ”.

Sch 7 para 60
Sch 7 para 60(1)

In paragraphs 1 to 8 of Schedule 10 to the 1986 Act (requisite particulars of income of related business), for the words “management services”, in each place where they occur, there shall be substituted the words “ administrative services ”.

Sch 7 para 60(2)

In paragraphs 1, 2, 5 and 6 of that Schedule—

Sch 7 para 60(2)(a)

for the words “an advance”, in each place where they occur, there shall be substituted the words “ a loan ”; and

Sch 7 para 60(2)(b)

the words “under section 6, 10, 17 or 19” shall cease to have effect.

Sch 7 para 60(3)

In paragraphs 4 and 8 of that Schedule, for the word “advances” there shall be substituted the word “ loans ”.

Auditors: appointment, tenure and qualifications

Sch 7 para 61

In paragraph 5 of Schedule 11 to the 1986 Act (auditors: appointment, tenure and qualifications)—

Sch 7 para 61(a)

in sub-paragraph (2)(c), for the word “subsidiary” there shall be substituted the words “ subsidiary undertaking ”; and

Sch 7 para 61(b)

in sub-paragraph (4), for the words “sub-paragraph (1)(f)” there shall be substituted the words “ sub-paragraph (1)(b) ”.

Schemes for investigation of complaints

Sch 7 para 62

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

Recognition etc. of schemes for investigation of complaints

Sch 7 para 63

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

Settlement of disputes

Sch 7 para 64
Sch 7 para 64(1)

In paragraph 1(4) of Schedule 14 to the 1986 Act (settlement of disputes), for the words “paragraph 31(4)(a)” there shall be substituted the words “ paragraph 20A(10)(a) or 31(4)(a) ”.

Sch 7 para 64(2)

In sub-paragraph (1) of paragraph 4 of that Schedule—

Sch 7 para 64(2)(a)

after the words “an election address” there shall be inserted the words “ or a revised election address ”; and

Sch 7 para 64(2)(b)

for the words “paragraph 31(1)” there shall be substituted the words “ paragraph 20A(1)(b) or 31(1) ”.

Sch 7 para 64(3)

In sub-paragraph (2) of that paragraph, for the words “paragraph 31(1)” there shall be substituted the words “ paragraph 20A(1)(b) or 31(1) ”.

Sch 7 para 64(4)

After that paragraph there shall be inserted the following paragraph—

Sch 7 para 64(5)

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

Application of companies winding up legislation to building societies

Sch 7 para 65

In paragraph 3(2) of Schedule 15 to the 1986 Act (application of companies winding up legislation to building societies), for paragraph (b) there shall be substituted the following paragraph—

Mergers: supplementary provisions

Sch 7 para 66
Sch 7 para 66(1)

In paragraph 1 of Schedule 16 to the 1986 Act (mergers: supplementary provisions)—

Sch 7 para 66(1)(a)

in sub-paragraph (4)(e), for the words “class 1 or 2 advances made by the building society” there shall be substituted the words “ loans made by the building society which are secured on land ”; and

Sch 7 para 66(1)(b)

sub-paragraph (5) shall cease to have effect.

Sch 7 para 66(2)

For sub-paragraph (2) of paragraph 4 of that Schedule there shall be substituted the following sub-paragraphs—

Sch 7 para 66(3)

In sub-paragraph (1) of paragraph 5 of that Schedule—

Sch 7 para 66(3)(a)

after the words “merger statement” there shall be inserted the words “ or transfer proposal notification ”; and

Sch 7 para 66(3)(b)

after the words “the statement” there shall be inserted the words “ or notification ”.

Sch 7 para 66(4)

In sub-paragraph (2) of that paragraph, after the words “merger statement” there shall be inserted the words “ or transfer proposal notification ”.

Transitional and saving provisions

Sch 7 para 67

In Schedule 20 to the 1986 Act (transitional and saving provisions), the following shall cease to have effect, namely—

Sch 7 para 67(a)

in paragraph 1, the definitions of “existing society” and “existing rules”; and

Sch 7 para 67(b)

paragraphs 2 to 4, 7 to 15 and 17 and 18.

Sch 8

Transitional provisions and savings

Alterations of purpose, powers and rules

Sch 8 para 1

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

Sch 8 para 2

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

Default powers

Sch 8 para 3

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

Existing members to whom advances have been made

Sch 8 para 4
Sch 8 para 4(1)

Nothing in section 2 of this Act shall affect the operation of sub-paragraph (2) of paragraph 6 of Schedule 2 to the 1986 Act in relation to any person who, immediately before the commencement of that section, is the holder of a share on which an advance has been made.

Sch 8 para 4(2)

Nothing in that section shall affect the operation of sub-paragraph (3) of that paragraph in relation to any person who, immediately before the commencement of that section, is a member of a building society to whom an advance has been made under rules made in pursuance of paragraph 5(1) or (2) of that Schedule.

Existing borrowing members which are corporations

Sch 8 para 5

Nothing in section 2 of this Act shall affect the operation of Schedule 2 to the 1986 Act in relation to any body corporate which, immediately before the commencement of that section, is a borrowing member of a building society within the meaning given by paragraph 5(2) of that Schedule (as substituted by that section).

Existing fully secured loans

Sch 8 para 6
Sch 8 para 6(1)

Subject to subsection (7) of section 6B of the 1986 Act—

Sch 8 para 6(1)(a)

any advance which immediately before the commencement of that section was or was treated as a class 1 advance shall be treated as a loan falling within paragraph (a) of subsection (4) of that section;

Sch 8 para 6(1)(b)

any advance which immediately before that commencement was or was treated as a class 2 advance shall be treated as a loan falling within that paragraph if the building society concerned determines that, on the assumption mentioned in sub-paragraph (2) below, it would have been a class 1 advance;

Sch 8 para 6(1)(c)

any advance not falling within paragraph (b) above which immediately before that commencement was or was treated as a class 2 advance shall be treated as a loan falling within paragraph (b) of that subsection; and

Sch 8 para 6(1)(d)

any advance which immediately before that commencement neither was nor was treated as a class 1 or a class 2 advance shall be treated as a loan falling within paragraph (c) of that subsection.

Sch 8 para 6(2)

The assumption is that section 11 of the 1986 Act had effect at all material times—

Sch 8 para 6(2)(a)

with the substitution for paragraph (b) of subsection (2) of the following paragraph—; and

Sch 8 para 6(2)(b)

with the omission from subsection (3) of the words “by the borrower or a dependant of his of a prescribed description”.

Existing shareholders

Sch 8 para 7

Unless the contrary is shown, a building society may assume that any shares in the society which are held by an individual at the commencement of section 8 of this Act are held otherwise than as a bare trustee (or, in Scotland, a simple trustee) for a body corporate, or for persons who include a body corporate.

Existing depositors and shareholders

Sch 8 para 8
Sch 8 para 8(1)

Nothing in section 9 of this Act shall affect the operation of the 1986 Act in relation to—

Sch 8 para 8(1)(a)

any deposit accepted by a building society from an individual before the commencement of that section;

Sch 8 para 8(1)(b)

any deposit accepted by a building society from an individual to whom sub-paragraph (2) below applies which is to be credited to a deposit account opened before that commencement;

Sch 8 para 8(1)(c)

any deposit accepted by a building society from an individual which is to be credited to a tax-exempt special savings account opened before that commencement; or

Sch 8 para 8(1)(d)

any share issued by a building society to a body corporate before that commencement.

Sch 8 para 8(2)

This sub-paragraph applies to an individual if—

Sch 8 para 8(2)(a)

a deposit of his is held in a deposit account opened before the commencement of section 9 of this Act;

Sch 8 para 8(2)(b)

he has been notified by the building society that he may transfer the deposit without penalty into an account which, at the date of the notice, was an equivalent share account; and

Sch 8 para 8(2)(c)

he has chosen not to do so.

Sch 8 para 8(3)

In this paragraph—“access period”, in relation to a deposit or share account, means the period of notice required for making withdrawals from the account;“equivalent share account”, in relation to a deposit account, means a share account—whose access period is no longer than that of the deposit account; and whose rate of interest is not less than that of each other share account with the society which has the same access period or, where there is no such account, that of any one share account with the society which has a longer access period;“tax-exempt special savings account” has the meaning given by section 326A(2) of the Income and Corporation Taxes Act 1988.

Sch 8 para 8(4)

In relation to anything which, after the commencement of section 9 of this Act, is done by a building society under paragraph (d) of section 8(2) of the 1986 Act, sub-paragraphs (1) and (2) above shall have effect as if any reference to that commencement were a reference to the expiry of the period mentioned in that paragraph.

Existing transfer statements referring to the abolition of priority liquidation distribution rights

Sch 8 para 9
Sch 8 para 9(1)

Where before the commencement of section 40 of this Act, a building society issued a transfer statement which satisfies the requirements of sub-paragraph (2) below and either—section 100 of the 1986 Act shall be deemed to have had effect in relation to the transfer as if section 40 of this Act had come into force on that date.

Sch 8 para 9(1)(a)

the transfer of the society’s business to the company which is to be its successor is effected after that commencement; or

Sch 8 para 9(1)(b)

that transfer was effected after the relevant date and before that commencement and the company is not being wound up at that commencement,

Sch 8 para 9(2)

The requirements of this sub-paragraph are that the statement—

Sch 8 para 9(2)(a)

referred to the possibility of provision being made to the like effect as section 40 of this Act; and

Sch 8 para 9(2)(b)

stated that, if such provision were made, either no rights to priority liquidation distributions would be conferred on qualifying members of the society or, if such rights had been so conferred, they would be withdrawn.

Sch 8 para 9(3)

In this paragraph—“the relevant date” means 6th November 1996;“transfer statement” has the same meaning as in Part I of Schedule 17 to the 1986 Act.

Existing specially formed successor companies

Sch 8 para 10
Sch 8 para 10(1)

This paragraph applies where before the passing of this Act a company has been specially formed by a building society to be its successor.

Sch 8 para 10(2)

Nothing in section 101 of the 1986 Act as substituted by section 41 of this Act shall be taken—

Sch 8 para 10(2)(a)

to impose any requirement which would not be imposed, or to render void any provision, allotment or registration which would not be rendered void, if that section of this Act had not been enacted; or

Sch 8 para 10(2)(b)

to prevent any alterations in the provisions of the company’s articles of association which are such as to secure that the company does not contravene, or that those provisions are consistent with, subsection (1) of section 101 of that Act as so substituted.

Sch 9

Repeals and revocations