Building Societies Act 1986

Any ten or more persons may establish a society under this Act by taking the following steps— Where copies of the memorandum and rules are sent to the FCA in accordance with sub-paragraph (1)(c) above, the FCA , if satisfied that— shall register the society and issue it with a certificate of incorporation. On registering a building society under sub-paragraph (2) above, the FCA shall— In this Act “memorandum”, in relation to a building society, means the memorandum of the purpose and the extent of the powers of the society including the record of any alteration under paragraph 4 below.

The memorandum of a building society shall state the purpose or principal purpose of the society to be that of making loans which are secured on residential property and are funded substantially by its members. The memorandum of a building society shall specify— The provisions of the memorandum of a building society, as read with the provisions of ths Act as in force for the time being, are binding upon— and all such members, officers and persons so claiming and all persons dealing with the society shall be taken to have notice of those provisions. Where any adoptable power conferred by virtue of an instrument under a provision of this Act ceases, by reason of the amendment or revocation of the instrument, to be available to building societies or building societies of any description, every society affected by the amendment or revocation shall annex to its memorandum a note of the fact that, as from the operative date of the instrument, it no longer has that power and shall send a copy of the note to the Authority which shall keep the copy in the public file of the society.

The rules of a building society shall provide for the matters specified in the Table in sub-paragraph (4) below. The rules of a building society are binding upon each of the members and officers of the society and on all persons claiming on account of a member or under the rules; and all such members, officers and persons (but no others) shall be taken to have notice of the rules. Nothing in this paragraph shall be taken to authorise any provision to be made which is inconsistent with this Act or an instrument made under it by . . . the Treasury or to affect the operation of any provision of this Act making rules void to any specified extent. The Table referred to in sub-paragraph (1) above is as follows:— TABLE OF MATTERS TO BE COVERED BY THE RULES 1. The name of the society and the address of its principal Office. 2. The manner in which the funds of the society are to be raised. 3. The manner in which the terms are to be determined on which shares are to be issued and the manner in which shareholders are to be informed of changes in the terms on which their shares are held. 4. Whether any preferential or deferred shares are to be issued and, if so, within what limits. 5. The manner in which loans are to be made and repaid, and the conditions on which a borrower may redeem the amount due from him before the end of the period for which the loan was made. 6. The manner in which losses are to be ascertained and provided for. 7. The manner in which membership is to cease. 8. The manner of remunerating the auditors. 9. As respects directors— (a) the manner of electing them and whether they may be co-opted; (b) any conditions which must be satisfied with respect to the holding of shares in the society if a person is to become, or is to remain, a director; (c) the manner of remunerating and, where it is not to be fixed by resolution at the annual general meeting, the maximum amount of the remuneration to be paid to, directors; and (d) the circumstances in which pensions may be awarded to persons by virtue of their office as director and the method of determining the terms of such pensions. 10. The powers and duties of the board of directors. 11. The custody of the mortgage deeds and other securities belonging to the society. 12. The form, custody and use of the society’s common seal. 13. The calling and holding of meetings and, in particular— (a) the right of members to requisition meetings; (b) the right of members to move resolutions at meetings; (c) the manner in which notice of any resolutions to be moved at meetings is to be given to members; (d) the procedure to be observed at meetings; (e) the form of notice for the convening of a meeting and the manner of its service; (f) the voting rights of members, the right to demand a poll and the manner in which a poll is to be taken. 14. The entitlement of members to participate in the distribution of any surplus assets after payments to creditors on the dissolution by consent of the society. 15. The entitlement of members, on the winding up of the society, to participate in the distribution of any surplus assets after payments are made in satisfaction of the society’s liabilities to creditors and shareholding members under the companies winding up legislation as modified by Parts 1 to 3 of Schedule 15 to this Act. Nothing in the rules of a society shall prevent the service of a notice or other document by the society—

A building society may by special resolution alter its purposes, alter its powers or alter its rules. Where a building society alters its purpose or powers or its rules under this paragraph, it shall send to the FCA — On altering its purpose or powers or its rules under this paragraph the building society shall determine the date on which it intends the alteration to take effect; and the record of the alteration shall specify that date (in this paragraph referred to as “the specified date”). Where copies of a record of an alteration of a building society’s purpose, powers or rules are sent to the FCA under sub-paragraph (2) above and the FCA is satisfied that the alteration is in conformity with this Act and (where applicable) any instruments under it, the FCA shall, subject to paragraph 19 below— An alteration of the purpose or powers or of the rules of a building society under this paragraph shall take effect on the specified date or, if registration of the alteration is not effected under sub-paragraph (4) above until a later date, that later date. Any provision in the rules of a building society that the memorandum or rules may be altered without passing a special resolution shall be void. If a building society arranges for the publication in consolidated form of its rules or memorandum as altered for the time being, it shall send a copy to the FCA and the FCA — If a building society fails to comply with sub-paragraph (2) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

The rules of a building society shall provide that no person shall be a member of the society unless he is a shareholding member or a borrowing member or both. In this Act, in relation to a building society— If the rules of a building society so provide, an individual shall cease to be a borrowing member at any time if at that time the society— Unless the rules of a building society so provide, an individual shall not be a borrowing member at any time if at that time the loan is owed to the society in equity rather than at law. A person who is a minor—

The liability at any time of a shareholding member of a building society shall be limited to the amount which, at that time, has been actually paid, or is in arrear, on his shares in the society. The liability at any time of a borrowing member of a building society shall be limited to the amount which, at that time, is payable under the mortgage or other security by which his indebtedness to the society in respect of the loan is secured.

Two or more persons may jointly hold shares in a building society and the following provisions of this paragraph shall apply to any shares so held. In this paragraph, in relation to any shares jointly held, “representative joint holder” means that one of the joint holders who is named first in the records of the society. Except where the rules of the society otherwise provide, any notice or other document may be given or sent by the society to the joint holders by being given or sent to the representative joint holder; but this sub-paragraph shall not prevent any of the joint holders from exercising the rights under this Act of a member of a building society to obtain from the society on demand a copy of ... the annual accounts and the annual business statement. For the purpose of determining— the shares shall be treated as held by the representative joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares (other than the representative joint holder) shall not be entitled to vote in any such election or qualified to vote on any such resolution. For the purposes of sections 87 and 93 to 102 the shares shall be treated as held by the representative joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares (other than the representative joint holder) shall not be regarded as a member of the society for the purposes of those sections. In its application to section 100, sub-paragraph (5) above shall have effect subject to the provisions of section 102A. The representative joint holder (but none of the other joint holders) shall have the right to join in making an application under section 56 and any reference in that section to the total membership of a building society shall be construed accordingly. In the register to be maintained under paragraph 13 below the entry of that one of the joint holders who is the representative joint holder shall indicate that fact. The joint holders shall be entitled to choose the order in which they are named in the records of the society.

Where a loan secured on land is made by a building society to two or more persons jointly the following provisions of this paragraph shall apply to their rights as borrowing members of the society. In this paragraph, in relation to any rights of theirs as borrowing members, “representative joint borrowers” means that one of the joint borrowers who is named first in the records of the society. Except where the rules of the society otherwise provide, any notice or other document may be given or sent by the society to the joint borrowers by being given or sent to the representative joint borrowers; but this sub-paragraph shall not prevent any of the joint borrowers from exercising the rights under this Act of a borrowing member of a building society to obtain from the society on demand a copy of ... the annual accounts and the annual business statement. For the purpose of determining— the rights of the joint borrowers as borrowing members of the society shall be treated as the rights of the representative joint borrower alone; and accordingly a person who is a member of the society by reason only of being a joint borrower (other than the representative joint borrower) shall not be entitled to vote in any such election or qualified to vote on any such resolution. For the purposes of sections 87 and 93 to 102 the rights of the joint borrowers as borrowing members of the society shall be treated as the rights of the representative joint borrower alone; and accordingly a person who is a member of the society by reason only of being a joint borrower (other than the representative joint borrower) shall not be regarded as a borrowing member of the society for the purposes of those sections. The representative joint borrower (but none of the other joint borrowers) shall have the right to join in making an application under section 56 and any reference in that section to the total membership of a building society shall be construed accordingly. In the register to be maintained under paragraph 13 below the entry of that one of the joint borrowers who is the representative joint borrower shall indicate that fact. The joint borrowers shall be entitled to choose the order in which they are named in the records of the society.

The common seal of a building society shall bear the registered name of the society. Every building society shall paint or affix, and keep painted or affixed, its registered name on the outside of every office or place in which its business is carried on, in a conspicuous position and in letters easily legible. Every building society shall state its registered name in legible characters in all of the following documents, in every electronic communication containing any of the following documents and on every web site on which any of the following documents is published, namely— A building society may change its name by special resolution. Where a society changes its name in accordance with this paragraph notice of the change of name shall be sent to the FCA and, unless the FCA is of the opinion that the changed name is undesirable, the FCA shall register the notice of the change of name and give the society a certificate of registration. A change of name shall take effect on the date on which the certificate of registration under sub-paragraph (4) above is issued or on such later date as may be specified in the certificate. The FCA shall keep a copy of the certificate of registration issued under sub-paragraph (4) above in the public file of the society. A change of name shall not affect the rights and obligations of the society or of any of its members or of any other person concerned. For the purposes of this paragraph and paragraphs 10 to 10C below “registered name”, in relation to a building society, means the name of the society which is for the time being registered with the FCA .

If a building society does not— as required by paragraph 9(2) above, the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale. A building society which, without reasonable excuse, does not comply with paragraph 9(2A) above shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale. If an officer of a building society or a person on its behalf issues or authorises the issue of any document mentioned in paragraph 9(2A)(a) to (g) above, in which the society’s registered name is not stated as required by that paragraph, he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale. If an officer of a building society or a person on its behalf signs or authorises to be signed on behalf of the building society any document mentioned in paragraph 9(2A)(h) above in which the society’s registered name is not stated as required by that paragraph— If a building society fails to send to the FCA a notice which it is required to send to it under paragraph 9(4) above, the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

A building society may change its principal office— Notice of any such change and of the date of it shall, within seven days after the change, be sent to the FCA and the FCA shall keep the notice in the public file of the society. It is not necessary to alter the memorandum or rules of a building society by reason only that its principal office is changed. If a building society fails to send to the FCA a notice which it is required to send to it under sub-paragraph (2) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

This paragraph and paragraph 10B below apply where a building society carries on business under a name other than the following, namely— The society shall not, without the written approval of the FCA , carry on business under a name which— The Treasury may, by regulations— Where the society proposes to carry on business under a name which is or includes any such word or expression, and a government department or other body is specified under sub-paragraph (3)(b) above in relation to that word or expression, the society shall— For the purposes of this paragraph “local authority” means—

A building society shall, on demand, give a copy of its statutory documents— The reference in sub-paragraph (1) above to a copy of a building society’s statutory documents is a reference to— If a building society fails to comply with the requirements of sub-paragraph (1) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence. In sub-paragraph (1) above the “prescribed amount” means £1 or such other amount as the Treasury prescribe by order made by statutory instrument.

Paragraph 9(2A) above shall have effect as if after the words “in legible characters” there were inserted the words “ which are reasonably prominent ”. The society shall in all documents mentioned in paragraph 9(2A) above state in legible characters an address in the United Kingdom at which service of any document relating in any way to the business will be effective. The society shall also in any premises where the business is carried on and to which the members of the society, the customers of the business or suppliers of any goods or services to the business have access, display in a prominent position so that it may easily be read by such persons a notice containing the society’s registered name and the address mentioned in sub-paragraph (2) above. The society shall secure that the registered name and the address mentioned in sub-paragraph (2) above is immediately given, by written notice, to any person with whom anything is done or discussed in the course of the business and who asks for the registered name or the address. The Treasury may, by regulations require a notice under sub-paragraph (3) or (4) above to be displayed or given in a specified form.

Every building society shall maintain a register of members showing— Where a member has notified to the building society an electronic address for the purpose of receiving notices or documents required to be sent by the society under this Act, the register shall show— The register shall be kept at the principal office or at such other place or places as the directors think fit. If a building society contravenes sub-paragraph (1) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence. For the purposes of this Act “registered address” in relation to a member of a building society, means—

A building society which contravenes paragraph 10A(2) above shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale. A building society which, without reasonable excuse, does not comply with paragraph 9(2A) or 10B(2), (3) or (4) above, or any regulations made under paragraph 10B(5) above, shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale. Where paragraph 10A above applies any legal proceedings brought by the society to enforce a right arising out of a contract made in the course of the business in respect of which the society was, at the time the contract was made, in breach of paragraph 9(2A) or 10B(2), (3) or (4) above shall be dismissed if the defendant (or, in Scotland, the defender) to the proceedings shows— unless the court before which the proceedings are brought is satisfied that it is just and equitable to let the proceedings continue. Sub-paragraph (3) above is without prejudice to the right of any person to enforce such rights as he may have against another person in any proceedings brought by that person. Regulations made under paragraph 10A(3) or 10B(5) above shall be made by statutory instrument subject to annulment by resolution of either House of Parliament. Such regulations may contain such transitional provisions and savings as the Treasury think fit, and may make different provision for different cases or classes of case.

A building society is not obliged by any provision of this Act or its rules to send a notice or other document to a member in whose case the society has reason to believe that communications sent to him at his registered address are unlikely to be received by him. Where the requirement relates to notice of a meeting or postal ballot of the society, the society must, instead, comply with the advertising requirements of paragraph 35 below.

At any time when a building society— a member of the society shall, subject to sub-paragraph (1A) below, have the right to obtain, from the register kept under paragraph 13 above, the names and addresses of members of the society, for the purpose of communicating with them on a subject relating to the affairs of the society. Sub-paragraph (1) above shall not apply unless the member in question— If, at any time not falling within sub-paragraph (1) above, a member of a building society who is qualified under the rules of the society to join in a members’ requisition for a special meeting, or to join in nominating a person for election as a director, makes a written application to the FCA for the right to obtain names and addresses from the register, the FCA — The FCA may charge a reasonable fee for considering an application under sub-paragraph (2) above. Any direction under sub-paragraph (2) above may be given subject to such limitations or conditions as the FCA may think fit. The FCA must consult the PRA before giving a direction under sub-paragraph (2). Before giving a direction under sub-paragraph (2) above, the FCA shall give particulars of the application to the building society and shall afford the society an opportunity of making representations with respect to the application; and the FCA shall, if the applicant or the society so requests, afford to the applicant and to the society an opportunity of being heard by it. A member entitled under this paragraph to obtain the names of members of a building society may apply in writing to the society, describing in the application the subject on which he proposes to communicate with other members of the society; and the society shall give him all necessary information as to the place or places where the register, or part of it, is kept, and reasonable facilities for inspecting the register and taking a copy of any names and addresses in the register. A building society shall not be obliged to disclose to a member making an application under this paragraph any particulars contained in the register other than the names of the members and their addresses, and may construct the register in such a way that it is possible to disclose the names and addresses to inspection without disclosing any such other particulars. No information obtained under sub-paragraph (1) or (2) above or this sub-paragraph and relating to a member of the society may be disclosed except— Any person who discloses information in contravention of sub-paragraph (7) above shall be liable— . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

The validity of an act done by a building society shall not be called into question on the ground of lack of capacity by reason of anything included in the society’s memorandum. A member of a building society may bring proceedings to restrain the doing of an act which but for sub-paragraph (1) above would be beyond the society’s capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society. It remains the duty of the directors of a building society to observe any limitations on their powers flowing from the society’s memorandum; and action by the directors which but for sub-paragraph (1) above would be beyond the society’s capacity may only be ratified by the society by special resolution. A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; relief from any such liability must be agreed to separately by special resolution.

In favour of a person dealing with a building society in good faith, the power of the board of directors to bind the society, or authorise others to do so, shall not be limited by reason of anything included in the society’s constitution, that is to say, its memorandum and rules. For this purpose— The references above to limitations on the directors’ powers under the society’s constitution include limitations deriving from a resolution of the society passed at a general meeting or special meeting or on a postal or electronic ballot, or from any agreement between the members of the society. Notwithstanding anything in paragraph 3(2) above, sub-paragraph (1) above applies in relation to members of the society, and to persons claiming on account of members or under the rules of the society, as it applies in relation to other persons. Sub-paragraph (1) above does not affect any right of a member of the society to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society. Nor does that sub-paragraph affect any liability incurred by the directors, or any other person, by reason of the directors’ exceeding their powers.

A party to a transaction with a building society is not bound to enquire as to whether it is permitted by the society’s constitution or as to any limitation on the powers of the board of directors to bind the society or authorise others to do so. Notwithstanding anything in paragraph 3(2) above, sub-paragraph (1) above applies in relation to members of the society as it applies in relation to other persons.

The central office, on receiving from a building society the declaration required by and the other documents referred to in paragraph 16 above, shall refer to the Commission for its determination the question whether or not the alteration of the society’s powers is to be registered. On a reference to the Commission of the question whether or not the alteration of a society’s powers is to be registered— The Commission, in deciding, in a case falling within subparagraph (2)(b) above, whether or not to direct the registration of the alteration of a society’s powers may have regard to all the circumstances of the case. No registration of an alteration shall be effected by the central office under paragraph 4(4) above before the expiry of the period of 21 days beginning with the date on which it receives the declaration required by and the other documents referred to in paragraph 16 above. If the central office, in pursuance of a direction of the Commission under sub-paragraph (2) above, refuses registration of the alteration of a society’s powers under sub-paragraph (1) above it shall serve on the society a notice— and shall send a copy of the notice to the Commission. The central office shall comply with any direction as regards the registration of the alteration of the society’s powers given to it by the Commission consequent on the Commission’s determination of the society’s powers under section 38. In this paragraph “the specified date” has the same meaning as in paragraph 4 above.

Subject to sub-paragraph (2) below, every building society shall hold a meeting in the first four months of each financial year as its annual general meeting (in addition to any other meetings in that year) and shall specify the meeting as such in the notices calling it. Sub-paragraph (1) above does not require a building society to hold an annual general meeting in the calendar year in which it is incorporated. If default is made in holding a meeting in accordance with sub-paragraph (1) above, the FCA may— Notwithstanding anything in the rules of a building society, the business which may be dealt with at the annual general meeting shall include any resolution whether special or not. In any case where default is made— the building society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

Any provision contained in the rules of a building society shall be void to the extent that it provides for the calling of a meeting of the society (other than an adjourned meeting) by less than 21 days’ notice expiring with the date of the meeting or, if earlier, the date specified by the society, under its rules, as the final date for the receipt of appointments of proxies to vote at the meeting. A meeting of a building society may be called by 21 days’ notice, unless the rules provide for longer notice of the meeting to be given. Where notice of a meeting is given in accordance with sub-paragraph (2) above, the notice shall be taken for the purposes of this Act or any other enactment to have been duly given according to the rules of the building society.

On a members’ requisition, a building society shall— and where a meeting is so called no business shall be conducted at the meeting other than that stated in the notice calling it or (where applicable) that mentioned in sub-paragraph (8)(b) below. Where a copy of a statement is required to be sent to a member under sub-paragraph (1)(b)— The requirements of this sub-paragraph are satisfied in the case of a statement if— A members’ requisition is a requisition of not less than the requisite number of members of the society; and that number is 500 or such lesser number as may be specified in the rules of the society. The requisition— Where the requisition consists of several documents, the date of its deposit shall be taken to be the date on which the document signed by the requisitionist making up the requisite number is deposited at the society’s principal office. The rules of the society may require a requisitionist— and in this sub-paragraph “specified period” means such period (not more than two years) before the date of the requisition as is specified in the rules. No objection may be made by virtue of such rules to the requisition or, where the requisition consists of several documents, to any of those documents unless it is made within 14 days of the requisition or document being deposited at the society’s principal office. The rules of the society may also require a sum of money, not exceeding £50 per requisitionist, to be deposited with the requisition; and, where any money is so deposited, it shall be forfeited to the society, or returned to the persons who deposited it, as provided by the rules. The rules shall not provide for any deposited money to be forfeited to the society except— If the rules of a building society so provide, sub-paragraph (1) above does not require the society— Sub-paragraph (1)(b) above does not require the society to send copies of a statement to members entitled to receive notice of a meeting in any case where— and that provision shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of a statement which does not relate directly to the affairs of the society. Where sub-paragraph (1)(b) above requires copies of a statement to be sent to members entitled to receive notice of a meeting, the proceedings at the meeting are not invalidated by— Where, in a case in which sub-paragraph (1A)(b) is relied on for compliance with a requirement of sub-paragraph (1)(b)— the failure shall not invalidate the proceedings at the meeting. The appropriate authority shall hear and determine any dispute arising under sub-paragraph (10)(a) above, whether on the application of the society or of any other person who claims to be aggrieved. The Treasury may, by order substitute— such other number or sum as appears to them to be appropriate; and an order under this subsection may make such supplementary, transitional and saving provision as appears to the Treasury to be necessary or expedient. The power to make an order under sub-paragraph (13) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Subject to the provisions of this Part of this Schedule, notice of a meeting of a building society shall be given to every member of the society who would be eligible to vote at the meeting if the meeting were held on the date of the notice. Notice of the meeting shall, subject to those provisions, be given also to every person— and who would (in either case) be eligible to vote at the meeting if he remained such a member until the date of the meeting. In sub-paragraph (2) above “the specified date” means the date specified by the society as the final date for the receipt of appointments of proxies to vote at the meeting. Accidental omission to give notice of a meeting to, or non-receipt of notice of a meeting by, any person entitled to receive notice of the meeting does not invalidate the proceedings at that meeting.

This paragraph applies where a members’ requisition is deposited at a building society’s principal office and the society is not relieved of the obligation to call a special meeting by paragraph 20A(9)(a) above. Subject to sub-paragraph (5) below, if the society does not within 28 days from the date of the deposit of the requisition duly call a meeting to be held within 63 days from that date— A meeting called under sub-paragraph (2) above by requisitionists shall be called in the same manner, as nearly as may be, as that in which meetings are to be called by the society. If— the requisitionists, or any proportion of them exceeding one half, may themselves send a copy of the statement to each such member. If the rules of the society make such provision as is mentioned in paragraph 20A(9)(b) above, any days falling within the period there mentioned shall be disregarded in determining any period for the purposes of sub-paragraph (2) or (4)(b) above. Any reasonable expenses incurred by the requisitionists by reason of the failure of the society to call a meeting, or to comply with such a requirement as is mentioned in sub-paragraph (4) above, shall be repaid to the requisitionists by the society. Any sum so repaid shall be recoverable by the society from such of the directors of the society as were responsible for the failure (whether by the retention of fees or other remuneration in respect of services or otherwise).

A member of a building society is entitled to vote— but subject, in either case, to paragraphs 5(3), 7(4) and 8(4) above and sub-paragraph (5A) below and, in the case of paragraphs (a) and (b), to sub-paragraph (3) below. Subject to the following provisions of this paragraph, any provision in the rules of a building society is void to the extent that it would have the effect of restricting the rights conferred on members by sub-paragraph (1) above. If the rules of the society so provide, a shareholding member is not entitled to vote on an ordinary resolution or a special resolution as such a member, or to vote on a shareholding members’ resolution— Where a building society’s rules make such provision as is mentioned in sub-paragraph (3)(a) above, a shareholding member shall be taken to have had a qualifying shareholding at the qualifying shareholding date if he had such a holding— For the purposes of this paragraph a member of a building society has a “qualifying shareholding” at any time if at that time he holds shares in the society to a value not less than the prescribed amount or such lesser amount as may be specified in the rules. If the rules of the society so provide, a member who is also an employee of the building society shall not be entitled to exercise, directly or indirectly, any voting rights that the member may have with respect to a relevant resolution. For the purposes of sub-paragraph (5A), a relevant resolution is a resolution to approve an increase in the maximum ratio between the fixed and variable components of remuneration as permitted by— where the member referred to would be directly affected by the increase. For the purposes of sub-paragraph (5B), references to rules made by the Prudential Regulation Authority or the Financial Conduct Authority are to those rules as they have effect on IP completion day. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . In this paragraph “voting date”, with reference to any resolution, means—

A member of a building society who is entitled to attend and vote at a meeting of the society— A form for the appointment of a proxy— The conditions are that— If the form is absent from the website for part of the period referred to in sub-paragraph (1B)(c), the absence is to be disregarded if it is wholly attributable to circumstances that it would not be reasonable to have expected the society to prevent or avoid. Where a form for the appointment of a proxy is made available by a society on a website in accordance with subsection (1A)(b), the society may also make available on the website a facility for completing the form and returning the appointment in an electronic communication (but see paragraph 34). Where the society, under its rules, specifies a final date for the receipt of appointments of proxies to vote at a meeting, a person appointed a proxy by a member who at that date is entitled to attend and vote at the meeting may act as his proxy at the meeting whether or not the member ceases to be so entitled after that date. A proxy is entitled to vote on a poll but, subject to any provision in the rules of the building society, not otherwise. In every notice calling a meeting of a building society there shall appear with reasonable prominence a statement— Every form for the appointment of a proxy sent by a building society to persons entitled to notice of a meeting of the society must contain provision enabling that person to direct the proxy how to vote at the meeting. If default is made in complying with sub-paragraph (4) above in respect of a meeting of a building society, or in complying with sub-paragraph (4A) above in respect of a form of appointment of a proxy, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale, and so shall any officer who is also guilty of the offence. Any provision contained in the rules of a building society shall be void in so far as it would have the effect of requiring the appointment of a proxy, or any document necessary to show the validity of, or otherwise relating to, the appointment of a proxy, to be received by the society or any other person more than seven days before a meeting or adjourned meeting in order that the appointment may be effective at the meeting or adjourned meeting.

Any provision contained in the rules of a building society shall be void in so far as it would have the effect either— Any appointment of a proxy to vote at a meeting of a building society shall be taken also to confer authority to demand or join in demanding a poll; and for the purposes of sub-paragraph (1) above a demand by a person as proxy of a member shall be the same as the demand by the member.

Where a notice of a meeting of a society is required to be sent to a person under any provision of this Act, the notice may be sent to him electronically only if it is sent to an electronic address notified by him to the society for the purpose. In a case in which this paragraph is relied on for compliance with a requirement to send a notice, a notice given in accordance with this paragraph is to be treated as given to a person on the day that the notice is transmitted.

No resolution of a building society shall be passed as a special resolution, or as a shareholding members’ resolution, unless it is required to be so passed by or under any provision of this Act or by the rules of the society.

A resolution of a building society shall be a special resolution when it has been passed by not less than three-quarters of the number of the members of the society qualified to vote on a special resolution and voting either— In any rules made by a building society on or after 1st October 1960, whether before or after the commencement of this Act, “special resolution”, unless the context otherwise requires, means a special resolution as defined in this paragraph.

A resolution of a building society shall be a shareholding members’ resolution when it has been passed by not less than three-quarters of the number of the shareholding members of the society—

A requirement under any provision of this Act to send a notice of a meeting of the society to a person shall also be treated as satisfied if the conditions set out in sub-paragraph (2) are satisfied. The conditions of this sub-paragraph are satisfied in the case of a notice of a meeting of a society if— A notification given for the purposes of sub-paragraph (2)(c) must— In a case in which this paragraph is relied on for compliance with a requirement to send a notice, a notice given in accordance with this paragraph is to be treated as given to a person on the day that person is notified in compliance with sub-paragraphs (2)(c) and (3). Where, in a case in which this paragraph is relied on for compliance with a requirement to send a notice of a meeting— the failure shall not invalidate the proceedings of the meeting.

No resolution of a building society shall be passed as a borrowing members’ resolution unless it is required to be so passed by or under any provision of this Act or by the rules of the society.

A resolution of a building society shall be a borrowing members’ resolution when it has been passed by a majority of the borrowing members of the society voting in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a borrowing members’ resolution has been duly given. For the purposes of this Part of this Schedule, an individual who is indebted to a building society in respect of a loan fully secured on land is not a borrowing member of the society at any time if at that time the amount of his mortgage debt is less than the prescribed amount. Where a borrowing member’s resolution approving a transfer of engagements by a building society is moved, only those borrowing members whose mortgages are to be transferred shall be entitled to vote on the resolution. In any rules made by a building society after the commencement of this paragraph, “borrowing members’ resolution”, unless the context otherwise requires, means a borrowing members’ resolution as defined in this paragraph.

The transfer resolutions required for the purposes of section 97 for the approval by members of a building society of a transfer of its business are two resolutions, of which— In a case where the successor is to be a specially formed company, the requisite shareholders’ resolution— and the notice of the resolution required by paragraph 27A above must specify that the resolution will not be effective unless both of the requirements specified in this sub-paragraph are fulfilled. Subject to any direction under sub-paragraph (5) below, in a case where the successor is to be an existing company, the requisite shareholders’ resolution must be passed as a shareholding members’ resolution and either— and, in either case, the resolution must be a resolution in relation to which the notice required by paragraph 27A above includes a statement specifying that the resolution will not be effective unless either of the above requirements is fulfilled has been duly given. If the appropriate authority considers it expedient, in relation to a transfer of the business of a building society to an existing company, to do so for the purpose of protecting the investments of the shareholders of or depositors with the society, the it may give a direction under sub-paragraph (5) below. If the appropriate authority is the PRA, it must consult the FCA before giving a direction under sub-paragraph (5). A direction under this sub-paragraph is a direction that, for the purposes of the transfer of business specified in the direction, the requisite shareholders’ resolution is to be effective if it is passed as a shareholding members’ resolution. The Treasury . . . may by order amend sub-paragraph (2)(b), (3)(a) or (3)(b) above so as to substitute for the percentage for the time being specified in the subparagraph such other percentage as they think appropriate. The power to make orders under sub-paragraph (6) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament. In this paragraph “voting date”, with reference to a requisite shareholders’ resolution, has the same meaning as in paragraph 23(6) above.

If at least the requisite number of qualified members of a building society give notice to the society of their intention to have moved on their behalf a resolution, other than a shareholding members’ resolution or a borrowing members’ resolution, specified in the notice at an annual general meeting of the society, it shall be the duty of the society, subject to sub-paragraphs (4), (5) and (6) below— For the purposes of sub-paragraph (1) above— Any provision contained in the rules of a building society shall be void to the extent that it would have the effect of requiring a qualified member, for the purposes of sub-paragraph (1) above,— and for the purposes of this sub-paragraph the qualifying date is the date on which the notice is given to the society under sub-paragraph (1) above. Sub-paragraph (1) above does not require a building society to send notices of a resolution or copies of a statement to members of the society in any case where— and that sub-paragraph shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of a resolution or statement which does not relate directly to the affairs of the society. If the rules of a building society so provide, sub-paragraph (1) above does not require notice of a resolution to be given to members of the society if the resolution is in substantially the same terms as any resolution which has been defeated at a meeting or on a postal or electronic ballot during the period beginning with the third annual general meeting before the date on which notice of the resolution is given to the society. No copies of a statement with respect to a resolution shall be sent to members of a building society if, on any of the grounds in sub-paragraph (4) or (5) above, the society does not give the notice of the resolution to them required by sub-paragraph (1)(a) above. The PRA shall hear and determine any dispute arising under sub-paragraph (4)(a) above, whether on the application of the building society or of any other person who claims to be aggrieved. If a building society fails to comply with the requirements of sub-paragraph (1) above where notice is duly given under that sub-paragraph, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence. For the purposes of this paragraph “liquid assets” and “fixed assets”, in the case of societies which produce IAS individual accounts or IAS group accounts, have the same meaning as given in section 6(16).

Notice of a resolution given under paragraph 31(1) above must be given to the building society not later than the last day of the financial year preceding the financial year in which is held the annual general meeting at which it is intended to move the resolution; and any statement to be sent to members under paragraph 31 (1)(b) above must also be notified to the society not later than that day. The notices of a resolution and the copies of a statement required to be sent to members by paragraph 31(1)(a) or (b) above shall be sent to them in the same manner and (so far as practicable) at the same time as the notice of the annual general meeting at which the resolution is intended to be moved; and, where it is not practicable for them to be sent at the same time as the notice, they shall be sent as soon as practicable thereafter. Sub-paragraph (2B) applies where, in a case in which a society gives notice in accordance with paragraph 22A or 22B of this Schedule of the annual general meeting at which a resolution is intended to be moved, the notice of the resolution and the copy of a statement in respect of the resolution that are required to be sent to a member under paragraph 3 1 (1)(a) or (b) are not transmitted or published at the same time as the notice. The requirement of sub-paragraph (2) to send a member his notice of the resolution and his copy of a statement in the same manner as the notice of the annual general meeting is satisfied if— Where a notice of a resolution and copy of a statement are sent to a member electronically under sub-paragraph (2B), they must be sent to an electronic address notified by the member for the purpose. The requirements of sub-paragraph (2) or (2B)(a) are satisfied by the publication of a notice of the resolution and a copy of the statement on a web site only if— Where notices of a resolution, or copies of a statement in respect of a resolution, intended to be moved at a meeting of a building society are required to be sent to any persons, the proceedings at the meeting are not invalidated by— Where, in a case in which sub-paragraph (2D) is relied on for compliance with a requirement of sub-paragraph (2) or (2B)(a)— the failure shall not invalidate the proceedings at the meeting. The Treasury may by order vary— whether by the addition of any description or other provision or by the substitution or deletion of any definition, description or other provision for the time being specified or contained in that paragraph. An order under sub-paragraph (4) above shall be made by statutory instrument subject to annulment in pursu" ance of a resolution of either House of Parliament. An order under sub-paragraph (4) above may contain transitional, consequential or supplementary provision.

The rules of a building society may provide for the voting in an election of directors or on any resolution of the society (other than a shareholding members’ resolution or a borrowing members’ resolution) to be conducted in all, or in any particular, circumstances by postal ballot; ... Rules made pursuant to sub-paragraph (1) may also make provision in relation to the use of electronic communications in the conduct of a postal ballot. Where, under the rules of a society, a postal ballot is to take place, the following provisions of this paragraph have effect. Notice of a postal ballot shall be given not less than 21 nor more than 56 days before the date which the society specifies as the final date for the receipt of completed ballot papers (referred to in this paragraph as “the voting day”). Subject to the provisions of this Part of this Schedule, notice of a postal ballot shall be given to every member of the society who would be entitled to vote in the election or on the resolution if the voting date for the election or the resolution fell on the date of the notice. Notice of the postal ballot shall, subject to those provisions, be given also to every person— and who would (in either case) be eligible to vote in the election or on the resolution if he remained such a member until that day. Where a notice of a postal ballot is required to be given to a person by sub-paragraph (4) or (5), the notice may be sent to him electronically only if it is sent to an electronic address notified by the person to the society for the purpose. In a case in which notice of a postal ballot is sent electronically to an electronic address in accordance with sub-paragraph (5A), the notice is to be treated as given to a person on the day on which it is transmitted. A requirement of sub-paragraph (4) or (5) to send a notice of a postal ballot shall also be treated as satisfied if— In a case in which sub-paragraph (5B) is relied on for compliance with a requirement of sub-paragraph (4) or (5), a notice of a postal ballot is to be treated as sent to a person on the day when notification is given in accordance with sub-paragraph (5C)(d). Where, in a case in which sub-paragraph (5C) is relied on for compliance with a requirement of sub-paragraph (4) or (5)— the failure shall not invalidate the postal ballot. Notice of a postal ballot— as would be required to be given or sent to a member in connection with notice of a meeting, had it been intended to hold the election or vote on the resolution at a meeting instead of by postal ballot with the exception, however, of any notice relating to voting by proxy at a meeting. Where the notice of a postal ballot is required by sub-paragraph (6) to contain a related notice or to be accompanied by an accompanying document— The conditions of this sub-paragraph are satisfied in the case of a related notice or accompanying document if— Where notice of a postal ballot and any related notice or accompanying document is sent to a person electronically, that person may return the completed voting paper to the society either— unless the rules of the society make provision to the contrary. Accidental omission— to any person entitled to receive it, or non-receipt of such a notice or document by such a person, does not invalidate the postal ballot. Where, in a case in which sub-paragraph (6A)(b) is relied on for compliance with a requirement of sub-paragraph (6)— the failure shall not invalidate the postal ballot.

If a member of a building society who purports to exercise his right— fails to make a declaration in accordance with sub-paragraph (2) below in the ... appointment or, as the case may be, on the voting paper, the appointment made or, as the case may be, the vote cast by him is invalid. A person making a declaration in pursuance of sub-paragraph (1) above shall— Where an appointment of a proxy is returned in an electronic communication in accordance with paragraph 24(1D), the requirements of sub-paragraph (2) above are satisfied only if— Where a member voting in a postal ballot returns a completed voting paper electronically as mentioned in sub-paragraph (6E)(b) of paragraph 33 above, the requirements of sub-paragraph (2) above are satisfied only if— Where a member registers a vote on a web site in accordance with sub-paragraph (8)(b) of paragraph 33A above, the requirements of sub-paragraph (2) above are satisfied only if— A building society shall secure that every document issued by it for use as a voting paper and every appointment of a proxy incorporates a form of declaration under this paragraph for completion by the member using it. A building society shall ensure that— for completion or confirmation by the member purporting to exercise his right to vote. If a building society fails to comply with the requirements of sub-paragraph (3) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence. In this paragraph—

Nothing in this Part of this Schedule is to be taken to preclude the holding and conducting of a meeting of a building society in such a way that persons who are not present together at the same place may by electronic means attend, speak and vote at it. The use of electronic means for the purpose of enabling participation in such a meeting may be made subject only to such requirements and restrictions as are—

The advertising requirements referred to in paragraph 14 above, in relation to notices of meetings or postal or electronic ballots of building societies, are as follows. Notice of the holding of the meeting or of the postal ballot must be given either— according as the rules of the society provide. The notice must be given not later than 21 days before the date of the proposed meeting or, as the case may be, the final date for the receipt of completed ballot papers or for the registration of votes in an electronic ballot (as the case may be). The notice shall state where members may obtain copies of the resolutions and any statements with respect to the matter referred to in a resolution, forms relating to voting by proxy and, in the case of a postal ballot, the ballot papers, or, in the case of an electronic ballot, how members may access electronic voting facilities.

For the purposes of this Part of this Schedule, the “prescribed amount” is £100 or such other amount as the Treasury by order specify for the time being. The power to make an order under sub-paragraph (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament. An order under sub-paragraph (1) above may contain transitional, consequential or supplementary provision.

Where— the ballot in the case of that election or resolution may, in those circumstances, be an electronic ballot instead of a postal ballot. A ballot in the case of an election or resolution is an electronic ballot if it is conducted— But voting in the case of an election or resolution may not be conducted by an electronic ballot in which all the voting is electronic voting in accordance with sub-paragraphs (8) to (10) unless the rules of the society expressly permit it. The rules of a building society may provide for voting in the case of— to be conducted by an electronic ballot in which all the voting is electronic voting in accordance with sub-paragraphs (8) to (10). Where voting may be conducted by electronic ballot by virtue of sub-paragraph (1) the rules of the society may contain provision supplementing rules relating to postal ballots in so far as it is necessary to provide for the conduct of electronic voting in accordance with subparagraphs (8) to (10). Where voting may be conducted by electronic ballot by virtue of sub-paragraph (1) or (3) the rules of the society may make provision as to the consequences of any irregularities occurring in the course of a ballot, including (but not restricted to) provision as to the validity of multiple votes cast by a member in the same election or on the same resolution. In the case of an electronic ballot, the society is not required to send notice of the ballot to any person if— The voting of a person in an electronic ballot is electronic if— The conditions of this sub-paragraph are satisfied if— A notice given for the purposes of sub-paragraph (9)(c) must— Nothing in sub-paragraph (9) shall invalidate an electronic ballot where— Sub-paragraphs (3) to (7) of paragraph 33 apply, with the modification specified in subparagraph (13) below, in relation to notices of an electronic ballot as they apply in relation to notices of a postal ballot. Sub-paragraph (3) of paragraph 33 has effect as if the reference to the receipt of completed ballot papers included a reference to the registration of votes by means of a voting facility on a web site. For the purposes of sub-paragraph (3) of paragraph 33 (as applied to electronic ballots by sub-paragraph (13) above), in a case in which a person is notified for the purposes of subparagraph (9)(c), a notice of an electronic ballot is treated as given to a person on the day when notification is given in accordance with that sub-paragraph.

An application for authorisation— If required to do so by notice from the Commission given at any time after an application for authorisation has been made and before a decision has been reached on the application, the applicant shall furnish to the Commission such additional information as it may reasonably require in order to reach a decision on the application. If on an application for authorisation the Commission proposes to impose conditions the provisions of Part III of this Schedule shall apply. If the Commission proposes to refuse to grant authorisation it shall serve a notice on the applicant stating— If the grounds for the proposed refusal include the ground that any officer of the society is not a fit and proper person to hold office in the society the Commission shall also serve the notice specified in sub-paragraph (4) above on the officer concerned giving him the like right to make representations and to be heard with respect to his fitness and propriety for office. The Commission shall, before reaching a decision on the application, consider any representations made to it in accordance with sub-paragraph (4) or (5) above. If, on an application for authorisation, the Commission refuses to grant authorisation it shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society, and every other person on whom a notice was served under sub-paragraph (5) above, a notice stating the Commission’s decision and the grounds for it and, subject to sub-paragraph (8) below, shall do so before the expiry of the period of 6 months beginning with the date on which the application was received. In any case where, under sub-paragraph (2) above, the Commission requires additional information with respect to an application, the latest time for the giving of a notice under sub-paragraph (7) above with respect to the application shall be the expiry of whichever of the following periods first expires, namely— In the application of this paragraph to an application for the renewal of authorisation under section 41—

Any building society which furnishes any information or makes any statement which is false or misleading in a material particular in connection with an application for authorisation shall be liable, on conviction on indictment or on summary conviction, to a fine which, on summary conviction, shall not exceed the statutory maximum. Any person who knowingly or recklessly furnishes any information or makes any statement which is false or misleading in a material particular in connection with an application for authorisation shall be liable—

If the Commission proposes to revoke a society’s authorisation it shall serve on the society and, subject to paragraph 10 below, on every director and its chief executive a notice stating— If the grounds for the proposed revocation include the ground that any officer of the society is not a fit and proper person to hold office in the society the Commission shall also serve the notice specified in sub-paragraph (1) above on the officer concerned giving him the like right to make representations and to be heard with respect to his fitness and propriety for office. The Commission shall, before reaching a decision on whether to revoke the authorisation, consider any representations made to it in accordance with sub-paragraph (1) or (2) above and, except where paragraph 7 below applies the Commission shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (2) above, a notice stating its decision. If the Commission decides to revoke a society’s authorisation, the notice under sub-paragraph (3) above shall state the grounds for the decision. The Commission may not revoke a society’s authorisation on grounds other than those stated, or grounds included in those stated, in the notice served under sub-paragraph (1) above.

This paragraph applies where the Commission proposes, instead of revoking a society’s authorisation, to impose conditions. The Commission shall serve on the society and, subject to paragraph 10 below, on every director of the society and its chief executive a notice stating— If any condition proposed to be imposed on the society includes a requirement for the removal from office of any officer of the society, the Commission shall also serve the notice specified in sub-paragraph (2) above on the officer whose removal is proposed giving him a like right to make representations and to be heard with respect to his proposed removal from office. The Commission shall, before reaching a decision on whether to impose conditions and, if so, what conditions, consider any representations made in accordance with sub-paragraph (2) or (3) above and, except where paragraph 8 below applies, the Commission shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (3) above, a notice stating its decision. If the Commission decides to impose conditions the notice under sub-paragraph (4) above shall— The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by the Commission under sub-paragraph (2) above.

This paragraph applies where the Commission has decided, instead of revoking a society’s authorisation, to impose conditions but proposes to impose conditions different from and more onerous than those stated in the notice served by the Commission under paragraph 7(2) above. The Commission shall serve on the society and, subject to paragraph 10 below, on every director of the society and its chief executive, a notice stating— If any condition proposed to be imposed on the society includes a requirement for the removal from office of any officer of the society the Commission shall also serve the notice specified in sub-paragraph (2) above on the officer whose removal is proposed giving him the like right to make representations and to be heard with respect to his proposed removal from office. The Commission shall, before reaching a decision on whether to impose conditions different from those stated in the notice served under paragraph 7(2) above and, if so, what conditions, consider any representations made in accordance with sub-paragraph (2) or (3) above and shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (3) above, a notice stating its decision. If the Commission decides to impose conditions the notice under sub-paragraph (4) above shall— The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (2) above.

The modifications of the provisions of Part III of this Schedule in their application to the imposition of conditions by the Commission in pursuance of a direction of an appeal tribunal under section 47(6) or (7) are as follows. The notice under paragraph 4(1) shall be served on the society and the other persons there specified within the period of 14 days beginning with the date on which the Commission received notice of the tribunal’s decision under subsection (10) of that section; and a copy shall also be sent within that period to the tribunal. The notice under paragraph 4(1) may specify, as the period within which representations may be made, a period of not less than 7 days. If the Commission serves a notice under paragraph 5(2) on the society and the other persons there specified it shall send a copy of the notice to the tribunal.

Where any provision of this Schedule requires notice of any matter to be served on every director of a building society that requirement is satisfied by serving notice on each director whose appointment has been officially notified and the non-receipt of a notice of a matter by a director or the chief executive does not affect the validity of any action on the part of the Commission.

No guarantee arising out of the operation of an account by means of which money transmission services are provided shall exceed, for any single operation, the prescribed limit

In relation to the power to provide banking services—

The provision of foreign exchange services is restricted to their provision to individuals.

In relation to the power to provide investment services—

Management of land is restricted to management of land which is or is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land managed by the society which is or is to be used primarily for residential purposes.

The power to manage land is not available to a building society which does not for the time being have a qualifying asset holding.

In relation to the power to provide the service of trusteeship—

Arranging for the provision of investment services is restricted to their provision to individuals.

In relation to the power to provide land services—

No employee of a building society, a subsidiary or other associated body of which carries on estate agency work, whose duties include— shall perform any service on behalf of that subsidiary or other associated body.

The power to establish and manage personal equity plans is available only to a subsidiary of the society. The power to establish and manage personal equity plans is available only while the society has a qualifying asset holding.

Arranging for the provision of credit and connected services is restricted to their provision by recognised banks or licensed institutions or other bodies for the time being approved for the purposes of this Schedule by the Commission, whether in relation to all building societies or specified classes of building society.

Arranging for the provision of credit is restricted to its provision to individuals except where the loan to the borrower is to be secured by— being a mortgage or heritable security to which no other, or no more than one other, mortgage or heritable security, as the case may be, will have priority.

The power to establish and manage unit trust schemes is available only to a subsidiary of the society.

Arranging for the provision of insurance is restricted to its provision primarily to individuals ; but this restriction does not apply to, nor in determining whether over any period insurance is being provided primarily to individuals is any account to be taken of income derived from, insurance relating to land which is to secure advances by the society.

The power to provide estate agency services is available only to a subsidiary of the society.

For the power to provide estate agency services to be available to the subsidiary of a building society, the following conditions must be fulfilled as regards the subsidiary and its business, that is to say—

No employee of a building society a subsidiary of which provides estate agency services shall act as agent for the subsidiary.

The Commission, with the consent of the Treasury, may by order prescribe a limit of such amount as it considers appropriate for the purposes of paragraph 1 of Part III of this Schedule and in that paragraph " the prescribed limit" means the limit for the time being in force under this paragraph. The power to make an order under this paragraph shall be exercisable by statutory instrument and any instrument so made shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Without prejudice to any other implied incidental power, the power conferred in Part I of this Schedule to provide money transmission services implies (subject to any specified restriction) power, as regards members as well as others, to give guarantees in relation to, or to permit occasional overdrawing on, accounts with the society. It shall be the duty of a building society which has become obliged by virtue of the provision of money transmission services under this Schedule to fulfill a guarantee on a person's account or has permitted an account to become overdrawn to recover as soon as practicable from the person the amount paid by it under the guarantee or, as the case may be, the amount due to it on the overdrawn account and any instrument embodying the guarantee.

Any power derived from this Schedule to perform any activity includes the power to arrange its performance but a restriction in Part III of this Schedule on the power to perform any activity does not imply an equivalent restriction on the power to arrange its performance.

So far as regards the provision by it of a service which is a qualifying banking service for the purposes of this paragraph a building society shall be treated for all purposes as a bank and a banker and as carrying on the business of banking or a banking undertaking whether or not it would be so treated apart from this paragraph. A building society provides a qualifying banking service for the purposes of this paragraph if, with or without any restriction, it provides either or both of the services falling within paragraph 1 or 3 of Part I. This paragraph does not affect the determination of any question as to the status of a building society as a bank or banker for other purposes.

Without prejudice to the general scope of any service specified in Part I of this Schedule—

For the purpose of determining whether a transaction consists in the provision of foreign exchange services to an individual it shall be presumed that a transaction does so consist if the value of the transaction is less than the standard amount. The standard amount is, subject to sub-paragraph (3) below, £5,000. The Commission, with the consent of the Treasury, may by order amend sub-paragraph (2) above so as to substitute for the amount for the time being specified in that sub-paragraph such other amount as it considers appropriate for the purposes of this paragraph. For the purposes of sub-paragraph (1) above the value of a transaction consisting in the provision of foreign exchange services is, where the society is selling the foreign currency, the sum paid to it and, where the society is purchasing the foreign currency, the sum paid by it.

A building society shall, so far as regards the carrying on of an activity which comprises provision of a banking service for the purposes of this Schedule, be treated for all purposes as a bank and a banker and as carrying on the business of banking or a banking undertaking whether or not it would be so treated apart from this paragraph. This paragraph does not affect the determination of any question as to the status of a building society as a bank or banker for other purposes.

Where an account of a person with a building society has, by virtue of the provision of banking services under this Schedule, become overdrawn, it shall be the duty of the building society to take all reasonable steps to recover as soon as practicable from that person the amount due to it on the overdrawn account.

For the purposes of paragraph 1(f) and (g) of Part III of this Schedule, a transaction consisting in the provision of foreign exchange services is an excepted transaction where the value of the transaction is less than £10,000. For the purposes of subparagraph (1) above the value of a transaction consisting in the provision of foreign exchange services is, where the building society is selling foreign currency, the sum paid to it and, where the building society is purchasing foreign currency, the sum paid by it.

If a person acts as agent in contravention of paragraph 13 of Part III of this Schedule he shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

If a person performs any service in contravention of paragraph 5 of Part III of this Schedule he shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

This Schedule is to be construed as relating only to the capacity of building societies to provide the services for the time being specified in it and not as making lawful any activity, whether of a building society or a subsidiary or other associated body of a building society, which would not be lawful apart from this Schedule.

This Schedule is to be construed as relating only to the capacity of building societies to provide the services for the time being specified in it and not as making lawful any activity, whether of a building society or a subsidiary or other associated body of a building society, which would not be lawful apart from this Schedule.

In this Schedule—

In this Schedule—

Where the business associate of the building society provides conveyancing services the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society provides the services of surveying and valuing property the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society provides accountancy services the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society arranges for the provision of relevant insurance the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society provides conveyancing services the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society provides the services of surveying and valuing property the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society provides accountancy services the requisite particulars of its business in any financial year are the following—

Where the business associate of the building society arranges for the provision of relevant insurance the requisite particulars of its business in any financial year are the following—

The Treasury may by order prescribe, for the purposes of the provisions of Part II of this Schedule,— and, in any provision of Part II, “prescribed band” means, in relation to cases, any series of numbers so prescribed for the purposes of that provision and, in relation to monetary amounts, any series of monetary amounts so prescribed for the purposes of that provision. The power conferred by this paragraph includes power to prescribe different series of numbers or of monetary amounts for the purposes of different provisions. The power to make an order under this paragraph is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

In this Schedule— In section 69, “the volume of the business”, in relation to any business constituted by the provision of any services referred to in any provision of Part I or Part II of this Schedule means—

The establishment and functioning of an independent body (whether corporate or unincorporate) which is to administer the scheme.

The identity of the members.

The manner in which the expenses of the scheme are to be met by the members.

The appointment of an independent adjudicator to conduct investigations under the scheme and his tenure of office and remuneration.

The matters action in relation to which is to be subject to investigation under the scheme and the grounds for making it subject to investigation.

The duty of the adjudicator to investigate, and make determinations on, actions duly referred for investigation.

The powers of, and procedure to be followed in the conduct of investigations by, the adjudicator.

The powers of the adjudicator on the making of determinations.

The extent to which determinations are binding.

The manner in which determinations are to be communicated and published.

The making to the body administering the scheme of regular reports by the adjudicator as to the discharge of his functions, and their publication.

The manner of amending or revoking the scheme.

Accession to membership of other societies.

Withdrawal from membership.