Building Societies Act 1997
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—
After subsection (4) of that section there shall be inserted the following subsection—
For subsections (5) to (7) of that section there shall be substituted the following subsection—
For subsection (10) of that section there shall be substituted the following subsection—
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.
In sub-paragraph (3) of that paragraph—
in paragraph (b), after the words “may not” there shall be inserted the words “propose a resolution,”; and
in paragraph (c), after the words “may not” there shall be inserted the words “join in requisitioning a special meeting or”.
For paragraph 6 of that Schedule there shall be substituted the following paragraph—
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.
In subsection (8) of section 5 of the 1986 Act—
for paragraph (b) there shall be substituted the following paragraph—; and
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”.
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).
For section 6 of the 1986 Act there shall be substituted the following section—
After section 6 of the 1986 Act there shall be inserted the following section—
After section 6A of the 1986 Act there shall be inserted the following section—
After section 6B of the 1986 Act there shall be inserted the following section—
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).
For section 7 of the 1986 Act there shall be substituted the following section—
For section 8 of the 1986 Act there shall be substituted the following section—
After section 9 of the 1986 Act there shall be inserted the following section—
After section 9A of the 1986 Act there shall be inserted the following section—
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—
Part III (advances, loans and other assets);
section 33 (assistance to other building societies);
Part V (powers to provide services); and
sections 38 to 40 (power to determine extent of building society powers).
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.
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.
as a bank and a banker; and
as carrying on the business of banking or a banking undertaking,
In this section “mortgagee”, as respects Scotland, has the meaning given by section 119(2) of the 1986 Act.
For section 36 of the 1986 Act there shall be substituted the following section—
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).
After section 36 of the 1986 Act there shall be inserted the following section—
For section 37 of the 1986 Act there shall be substituted the following section—
After section 42 of the 1986 Act there shall be inserted the following section—
After section 42A of the 1986 Act there shall be inserted the following section—
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).
After section 42B of the 1986 Act there shall be inserted the following section—
After section 43 of the 1986 Act there shall be inserted the following section—
After section 43A of the 1986 Act there shall be inserted the following section—
For section 45 of the 1986 Act there shall be substituted the following section—
After section 45 of the 1986 Act there shall be inserted the following section—
For section 46 of the 1986 Act there shall be substituted the following section—
For subsections (5) to (8) of section 47 of the 1986 Act (determination of appeals) there shall be substituted the following subsections—
In subsection (10) of that section, for the word “conditions” there shall be substituted the words “conditions, variations or directions”.
After paragraph 20 of Schedule 2 to the 1986 Act there shall be inserted the following paragraph—
After paragraph 20A of Schedule 2 to the 1986 Act there shall be inserted the following paragraph—
In subsection (1) of section 60 of the 1986 Act (directors: elections and retirements), for paragraph (a) there shall be substituted the following paragraph—.
After that subsection there shall be inserted the following subsection—
For subsection (3) of that section there shall be substituted the following subsections—
In subsection (4) of that section, for the words “any person” there shall be substituted the words “any natural person”.
In subsection (10) of that section, for paragraph (b) there shall be substituted the following paragraph—.
After that subsection there shall be inserted the following subsection—
In subsection (17) of that section, the definition of “ordinary resolution” shall cease to have effect.
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—
For subsection (4) of that section there shall be substituted the following subsections—
In subsection (7) of that section—
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
in paragraph (a), after the words “the address” there shall be inserted the words “or, as the case may require, the revised address”.
In subsection (8) of that section—
after the words “an address”, in both places where they occur, there shall be inserted the words “or a revised address”; and
after the words “the address” there shall be inserted the words “or revised address”.
After section 92 of the 1986 Act there shall be inserted the following section—
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”.
After that subsection there shall be inserted the following subsection—
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).
After section 99 of the 1986 Act there shall be inserted the following section—
The Treasury, after consultation with the Commission, the Bank, the Building Societies Investor Protection Board and the Deposit Protection Board, may by order—
amalgamate those Boards into a single board to be known as the Deposit Protection Board; and
amalgamate the Deposit Protection Fund and the Building Societies Investor Protection Fund into a single fund to be known as the Deposit Protection Fund.
An order under this section shall make, in relation to the amalgamated board and the amalgamated fund, provisions corresponding to those of sections 50 to 57 and 63 to 66 of and Schedule 4 to the 1987 Act but—
with the modifications mentioned in subsection (3) below; and
with or without the modifications mentioned in subsection (4) below.
The modifications referred to in subsection (2)(a) above are modifications—
providing for the chairman of the Commission to be an ex officio member of the amalgamated board and to be consulted by the Governor of the Bank on the appointment of ordinary members of that board;
enabling officers or employees of the Commission to be appointed as ordinary members of that board;
providing for building societies, and for institutions which, but for the order, would be or would be entitled to become participating EEA institutions within the meaning of section 24 of the 1986 Act, to be or to be entitled to become participating institutions within the meaning of the corresponding provisions;
providing for authorised building societies, and for institutions which, but for the order, would be or would be liable to become contributory institutions within the meaning of the protective scheme provisions of Part IV of the 1986 Act, to be or to be liable to become contributory institutions within the meaning of the corresponding provisions; and
providing for the deposit base of any such society or institution as is mentioned in paragraph (d) above to include an amount determined by the amalgamated board as representing the average value, over the period mentioned in section 52(4) of the 1987 Act, of shareholdings in the society or institution.
The modifications referred to in subsection (2)(b) above are modifications—
increasing the number of ordinary members of the joint board that may be appointed; and
providing for contributions to be levied on contributory institutions of different descriptions at different rates and at different times.
An order under this section—
shall repeal sections 50 to 57 and 63 to 66 of and Schedule 4 to the 1987 Act, and sections 24, 25, 26 and 29 to 31 of and Schedule 5 to the 1986 Act;
shall provide for— to have effect as a reference to the amalgamated board or to the amalgamated fund, as the case may require; and
any reference in sections 58 to 62 of the 1987 Act to the Deposit Protection Board or to the Deposit Protection Fund; and
any reference in section 27 or 28 of, or Schedule 6 to, the 1986 Act to the Building Societies Investor Protection Board or to the Building Societies Investor Protection Fund,
may make such other consequential amendments of those Acts and of other enactments and instruments, and such incidental, supplemental and transitional provisions, as may appear to the Treasury to be necessary or expedient.
The power to make an order under this section shall be exercisable by statutory instrument; but no such order shall be made unless a draft of the order has been laid before and approved by a resolution of each House of Parliament.
In this section—
“the 1987 Act” means the Banking Act 1987;
“the Bank” means the Bank of England.
In subsection (2) of section 28 of the 1986 Act (liability of insolvent society in respect of payments made by Board), in paragraph (a) the words “as in respect of a contractual debt incurred immediately before the institution began to be wound up” shall cease to have effect.
After that subsection there shall be inserted the following subsection—
In subsections (4)(b) and (5)(b) of that section, for the words “apart from this section” there shall be substituted the words “apart from this paragraph”.
For section 83 of the 1986 Act there shall be substituted the following section—
For paragraph 1 (grounds of complaint) of Part III of Schedule 12 to the 1986 Act there shall be substituted the following paragraph—
In paragraph 2 (permissible exclusions from investigation) of that Part of that Schedule—
in paragraph (d), after the word “scheme” there shall be inserted the words “, or in furnishing evidence in support of the complaint”; and
after the second Note there shall be inserted the following Note—
After section 83 of the 1986 Act there shall be inserted the following section—
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, namely—
After sub-paragraph (7) of that paragraph there shall be inserted the following sub-paragraph—
For paragraph 10 of Schedule 2 to the 1986 Act (offences relating to society name) there shall be substituted the following paragraph—
After that paragraph there shall be inserted the following paragraphs—
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 Commission for the right to obtain names and addresses from the register, the Commission— may direct that the applicant shall have the right to obtain from the register the names and addresses of the members for the purpose of communicating with them on that subject.
After sub-paragraph (6) of that paragraph there shall be inserted the following sub-paragraphs—
After section 66 of the 1986 Act there shall be inserted the following section—
After section 90 of the 1986 Act there shall be inserted the following section—
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).
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—
in subsection (2), paragraph (c) and the word “and” immediately before that paragraph; and
subsections (5) and (6).
For section 101 of the 1986 Act there shall be substituted the following section—
After section 104 of the 1986 Act there shall be inserted the following section—
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.
There shall be paid out of money provided by Parliament any increase attributable to this Act in the sums payable out of money so provided under the 1986 Act.
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—
In paragraph 2(3) of Schedule 12 to the Finance Act 1988 (meaning of “financial stock” in relation to a building society), for the words “by virtue of regulations under section 21(7) of the Building Societies Act 1986 (liquid assets etc.)” there shall be substituted the words “in liquid form (within the meaning given by section 45(7) of the Building Societies Act 1986)”.
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).
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.
This Act may be cited as the Building Societies Act 1997.
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.
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.
sections 40 and 41 above;
paragraphs 9 and 10 of Schedule 8 to this Act and section 46(1) above so far as relating to those paragraphs; and
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,
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.
Subject to subsection (4) above, this Act extends to Northern Ireland.
Section 3(2).
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 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.
Section 7(2).
When all money intended to be secured by a mortgage given to a building society has been fully paid or discharged, the society may endorse on or annex to the mortgage one or other of the following— Where in pursuance of sub-paragraph (1) above a receipt is endorsed on or annexed to a mortgage, not being a charge or incumbrance registered under the Land Registration Act 1925, the receipt shall operate in accordance with section 115(1), (3), (6) and (8) of the Law of Property Act 1925 (discharge of mortgages by receipt) in the like manner as a receipt which fulfils all the requirements of subsection (1) of that section. Section 115(9) of the Law of Property Act 1925 shall not apply to a receipt in the prescribed form endorsed or annexed by a building society in pursuance of sub-paragraph (1) above; and in the application of that subsection to a receipt so endorsed or annexed which is not in that form, the receipt shall be taken to be executed in the manner required by the statute relating to the society if it is signed as mentioned in sub-paragraph (1)(a) above. The foregoing sub-paragraphs shall, in the case of a mortgage of registered land, have effect without prejudice to the operation of the Land Registration Act 1925 or any rules in force under it. In this paragraph— This paragraph does not extend to Scotland.
In its application to Northern Ireland, paragraph 1 above shall have effect with the following modifications. In sub-paragraph (1) after the words “on such trusts” there shall be inserted the words “or uses”. In sub-paragraph (2)— For sub-paragraphs (3) and (4) there shall be substituted the following sub-paragraphs— “registered land” means land the title to which is registered under Part III of the Land Registration Act (Northern Ireland) 1970.
The Chief Registrar may make rules for prescribing anything authorised or required by paragraph 1 above to be prescribed; and in this Schedule “prescribed” means prescribed by rules made under this paragraph. The power to make rules under this paragraph shall be exercisable by statutory instrument.
Section 13(2).
In this Schedule “direction” means a direction under section 36(3), (5), (6), (7) or (10).
If the Commission proposes to give a direction, it shall serve on the society and, subject to paragraph 5 below, on every director of the society and its chief executive a notice stating— If a direction proposed to be given to 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 (1) 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— If the Commission decides to give a direction, the notice under sub-paragraph (3) above shall— The Commission may not give a direction on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (1) above.
This paragraph applies where the Commission has decided to give a direction but proposes to give a direction different from and more onerous than that stated in the notice served by the Commission under paragraph 2(1) above. The Commission shall serve on the society and, subject to paragraph 5 below, on every director of the society and its chief executive, a notice stating— If any direction proposed to be given to 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— If the Commission decides to give a different direction, the notice under sub-paragraph (4) above shall— The Commission may not give a direction 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 paragraph 2 and 3 above in their application to the giving of a different direction by the Commission in pursuance of a direction of an appeal tribunal under section 47(6) or (7A) are as follows. The notice under paragraph 2(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 section 47(10); and a copy shall also be sent within that period to the tribunal. The notice under paragraph 2(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 3(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.
Section 17(2).
This Part of this Schedule applies where a direction is given under section 42B(3) (“the direction”).
The consent of the Commission shall be sufficient authority for the provision for any such compensation as is mentioned in section 96(1)(a). A resolution of the board of directors passed in pursuance of the direction shall be sufficient authority for any such payments as are mentioned in section 96(1)(b).
The following provisions of this paragraph shall apply in place of paragraph 1 of Schedule 16. The society shall send to every member entitled to notice of a meeting of the society, a statement containing— with or without other particulars regarding that transfer. The statement shall be sent— No statement shall be sent unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under sub-paragraph (2)(b) above, have been approved by the Commission. A failure to comply with a requirement of this paragraph shall not invalidate the transfer of engagements; but, if the society fails without reasonable excuse to comply with such a requirement 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.
No application for confirmation by the Commission of the transfer of engagements may be made under Part III of Schedule 16 until after the society has complied with the requirements of paragraph 3 above.
Section 95 shall apply as if—
for paragraphs (a) and (b) of subsection (4) there were substituted the following paragraph—; and
in subsection (6), for the words “paragraphs (a), (b) and (c)” there were substituted the words “paragraphs (a) and (c)” and, in paragraph (a), the words “, including the calling of a further meeting,” were omitted.
This Part of this Schedule applies where a direction is given under section 42B(4) (“the direction”).
The consent of the Commission shall be sufficient authority for the provision for any such compensation as is mentioned in section 99(2)(a). A resolution of the board of directors passed in pursuance of the direction shall be sufficient authority for any such payments as are mentioned in section 99(2)(b).
If the Commission consents to the inclusion of any such provision as is mentioned in section 99A(1), it shall not be necessary for an ordinary resolution approving the provision to be put before a meeting of the society.
The following provisions of this paragraph shall apply in place of Part I of Schedule 17. The society shall send to every member entitled to notice of a meeting of the society, a statement containing— with or without other particulars regarding that transfer. The statement shall be sent— No statement shall be sent unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under sub-paragraph (2)(b) above, have been approved by the Commission. A failure to comply with a requirement of this paragraph shall not invalidate the transfer of business; but, if the society fails without reasonable excuse to comply with such a requirement 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.
No application for confirmation by the Commission of the transfer of business may be made under Part II of Schedule 17 until after the society has complied with the requirements of paragraph 9 above.
Section 98 shall apply as if—
for paragraphs (a) and (b) of subsection (3) there were substituted the following paragraph—;
in subsection (5), for the words “paragraphs (a), (b), (c) and (d)” there were substituted the words “paragraphs (a), (c) and (d)”; and
in subsection (6), the words “the calling of a further meeting,” were omitted.
Section 30(3).
In this Part of this Schedule—
“prescribed matters” in relation to any transfer of the business of a building society to its successor, means the matters relating to the transfer, the society, its officers, members or depositors, or the successor, which are prescribed in regulations made under paragraph 5(1) below;
“transfer statement”, in relation to a transfer of business by a building society, means the statement with respect to the transfer which may be sent or handed to members of the society under paragraph 2 below;
“transfer summary”, in relation to a transfer of business by a building society, means the summary of the transfer statement which may be sent to members of the society under that paragraph.
A building society which desires to transfer its business shall, in accordance with this Part of this Schedule, send a transfer statement, or a transfer summary, to every member entitled to notice of a meeting of the society.
A transfer statement, in relation to a transfer of business by a building society, shall contain— with or without other particulars regarding the transfer. A transfer summary, in relation to a transfer of business by a building society, shall contain— with or without other particulars regarding the transfer.
Subject to sub-paragraph (3) below, a building society shall, in relation to a transfer of business, include a transfer statement, or a transfer summary, in or with the notice to be sent to its members of the meeting of the society at which the requisite transfer resolutions are to be moved. Subject to sub-paragraph (3) below, where a building society sends a transfer summary, a transfer statement— No transfer statement shall be sent or handed to a member unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under paragraph 3(1)(b) above, have been approved by the Commission.
The Commission, with the consent of the Treasury, may make regulations for the purpose of specifying, as prescribed matters, the matters of which transfer statements are to give particulars; and the regulations may also require particulars to be given of any alternatives to the particular transfer which were available to the society making the transfer. The Commission, with the consent of the Treasury, may make regulations for the purpose of specifying the information which transfer summaries are to give. Any power to make regulations 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 Part of this Schedule—
“requisite particulars”, in relation to a transfer proposal, means the particulars required by paragraph 5B(2) below to be given in a transfer proposal notification;
“transfer”, in relation to a building society, means a transfer of the whole of its business to a company under section 97;
“transfer proposal notification” means a notification containing the requisite particulars of a transfer proposal;
“transfer resolutions”, in relation to a building society, means the resolutions required for the approval of a transfer by the society under section 97.
Subject to sub-paragraph (3) below, it shall be the duty of a building society receiving a transfer proposal to send, in accordance with this Part of this Schedule, a transfer proposal notification in respect of the proposal to every member entitled to notice of a meeting of the society. A transfer proposal notification must contain the following particulars— with or without other particulars regarding the proposal. Sub-paragraph (1) above does not require a transfer proposal notification to be sent to members if the proposer has requested in writing that the requisite particulars are to be treated as confidential; and, where such a request is made and is at a later date withdrawn in writing, the society receiving the proposal shall, for the purposes of this Part of this Schedule, treat the proposal as having been received on that date instead of any earlier date.
A building society shall include in or with every notice of its annual general meeting a transfer proposal notification with respect to any transfer proposal, other than a proposal of which notice has already been given under this paragraph— and the society may also include, under this paragraph, a transfer proposal notification with respect to any proposal received, or treated as received, by it after the end of either period.
received by it during the period of 12 months ending with the ninth month of the last financial year of the society before that meeting; or
treated by paragraph 5B(3) above as having been received by it during the last three months of that financial year;
Where a building society sends a transfer proposal notification to its members under paragraph 5C above in connection with a meeting of the society, it shall send a copy of the notification to the central office at least 14 days before the date of the meeting. The central office shall keep the copy of a transfer proposal notification received by it from a building society in the public file of that society.
If default is made by a building society in complying with paragraph 5C or 5D 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.
Section 39(2).
Subject to the provisions of this Schedule, the enactments specified in sub-paragraph (2) below (referred to in this Schedule as “the enactments”) apply in relation to building societies as they apply in relation to companies limited by shares and registered under the Companies Act 1985 or (as the case may be) the Companies (Northern Ireland) Order 1986. The enactments referred to in sub-paragraph (1) above are— and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or Article 2(6) and 373 of, and Schedule 7 to, the Insolvency (Northern Ireland) Order 1989.
The enactments shall, in their application to building societies, have effect with the substitution— In the application of the enactments to building societies—
Where any of the enactments as applied to building societies requires a notice or other document to be sent to the central office, it shall have effect as if it required the central office to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it. Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.
Rules may be made under section 411 of the Insolvency Act 1986 or, as the case may be, Article 359 of the Insolvency (Northern Ireland) Order 1989 for the purpose of giving effect, in relation to building societies, to the provisions of the enactments. An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the enactments and the performance by the official receiver or the Secretary of State of functions under them. An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the enactments and the performance by the official receiver or that Department of functions under them.
Any enactment which specifies a money sum altered by order under section 416 of the Insolvency Act 1986, or, as the case may be, Article 362 of the Insolvency (Northern Ireland) Order 1989, (powers to alter monetary limits) applies with the effect of the alteration.
In this Part of this Schedule, the Insolvency Act 1986 is referred to as “the Act”.
Section 1 of the Act (proposals for voluntary arrangements) has effect as if—
it required any proposal under Part I of the Act to be so framed as to enable a building society to comply with the requirements of this Act; and
any reference to debts included a reference to liabilities owed to the holders of shares in a building society.
In section 2 (procedure where nominee is not liquidator or administrator) and section 3 (summoning of meetings) of the Act as applied to a building society, any reference to a meeting of the society is a reference to—
a meeting of both shareholding and borrowing members of the society; and
a meeting of shareholding members alone.
In section 6 of the Act (challenge of decisions) as applied to a building society, “contributory”—
means every person liable to contribute to the assets of the society in the event of its being wound up, and
for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
includes persons who are liable to pay or contribute to the payment of— but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.
any debt or liability of the building society being wound up, or
any sum for the adjustment of rights of members among themselves, or
the expenses of the winding up;
Section 8 of the Act (power of court to make administration order) has effect as if it included provision that, where— the society shall be deemed for the purposes of subsection (1) to be unable to pay its debts. In subsection (3) of that section, paragraph (c) and, in subsection (4) of that section, the words from “nor where” to the end are omitted.
Subsection (1) of section 9 of the Act (application for administration order) as applied to a building society has effect as if— In subsection (2)(a) of that section as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the Commission (unless it is a petitioner). Subsection (3) of that section, and in subsection (4) of that section, the words “Subject to subsection (3),” are omitted.
In section 10 of the Act (effect of application for administration order), the following are omitted, namely—
in subsection (2), paragraphs (b) and (c); and
subsection (3).
In section 11 of the Act (effect of administration order), the following are omitted, namely—
in subsection (1), paragraph (b) and the word “and” immediately preceding that paragraph;
in subsection (3), paragraph (b);
in subsection (4), the words “an administrative receiver of the company has vacated office under subsection (1)(b), or”; and
subsection (5).
In subsection (1) of section 12 of the Act (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
Subsection (3) of section 13 of the Act (appointment of administrator) has effect as if it enabled an application for an order under subsection (2) of that section to be made by the Commission.
Subject to sub-paragraph (2) below, section 14 of the Act (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that section— Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act or paragraph (a) of the seventh criterion in section 45(3) of this Act. In subsection (4) of that section as applied to a building society, the reference to any power conferred by the Act or the Companies Act 1985 or by the memorandum or articles of association is a reference to any power conferred by this Act or by the society’s memorandum or rules. Subsection (8) of section 45 of this Act applies for the purposes of sub-paragraph (1)(b) above as it applies for the purposes of the seventh criterion in subsection (3) of that section.
Subject to sub-paragraph (3) below, paragraph 16 of Schedule 1 to the Act (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society. No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act. No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the court, or by meetings summoned under section 23(1) or 25(2) of the Act (as modified by paragraph 21 or 23 below).
In section 15 of the Act (power to deal with charged property etc.)—
subsection (1) is omitted; and
for subsections (3) and (4) there is substituted the following subsection—
Section 17 of the Act (general duties of administrator) has effect as if, instead of the requirement imposed by subsection (3), it required the administrator of a building society to summon a meeting of the society’s creditors if— That section also has effect as if it required the administrator of a building society to summon a meeting of the society’s shareholding members if—
In subsection (4) of section 19 of the Act (vacation of office) as applied to a building society, the words “in priority to any security to which section 15(1) then applies” are omitted.
Subsection (1) of section 23 of the Act (statement of proposals) as applied to a building society has effect as if— In subsection (2) of that section as so applied, references to members of the society do not include references to holders of shares in the society.
Section 24 of the Act (consideration of proposals by creditors' meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.
Section 25 of the Act (approval of substantial revisions) as applied to a building society has effect as if— In subsection (3) of that section as so applied, references to members of the society do not include references to holders of shares in the society.
Subsection (1) of section 27 of the Act (protection of interests of creditors and members) has effect—
as if it enabled the Commission or Investor Protection Board to apply to the court by petition for an order under that section; and
in relation to an application by the Commission or that Board, as if the words “(including at least himself)” were omitted.
In section 38 of the Act (receivership accounts), “prescribed” means prescribed by regulations made by statutory instrument by the Commission.
In subsection (1) of section 39 of the Act (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
Section 40 (payment of debts out of assets subject to floating charge) and sections 42 to 49 (administrative receivers) of the Act are omitted.
In this Part of this Schedule, the Insolvency (Northern Ireland) Order 1989 is referred to as “the Order”.
Article 14 of the Order (proposals for voluntary arrangements) has effect as if—
it required any proposal under Part II of the Order to be so framed as to enable a building society to comply with the requirements of this Act; and
any reference to debts included a reference to liabilities owed to the holders of shares in a building society.
In Article 15 (procedure where nominee is not liquidator or administrator) and Article 16 (summoning of meetings) of the Order as applied to a building society, any reference to meetings of the society is a reference to—
a meeting of both shareholding and borrowing members of the society; and
a meeting of shareholding members alone.
In Article 19 of the Order (challenge of decisions) as applied to a building society, “contributory”—
means every person liable to contribute to the assets of the society in the event of its being wound up, and
for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
includes persons who are liable to pay or contribute to the payment of— but does not include persons liable to contribute by virtue of a declaration by the High Court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading) of the Order.
any debt or liability of the building society being wound up, or
any sum for the adjustment of rights of members among themselves, or
the expenses of the winding up;
Article 21 of the Order (power of High Court to make administration order) has effect as if it included provision that, where— the society shall be deemed for the purposes of paragraph (1) to be unable to pay its debts. In paragraph (3) of that Article, sub-paragraph (c) and, in paragraph (4) of that Article, the words from “nor where” to the end are omitted.
Paragraph (1) of Article 22 of the Order (application for administration order) as applied to a building society has effect as if— In paragraph (2)(a) of that Article as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the Commission (unless it is a petitioner). Paragraph (3) of that Article, and in paragraph (4) of that Article, the words “Subject to paragraph (3),” are omitted.
In Article 23 of the Order (effect of application for administration order), the following are omitted, namely—
in paragraph (2), sub-paragraphs (b) and (c); and
paragraph (3).
In Article 24 of the Order (effect of administration order), the following are omitted, namely—
in paragraph (1), sub-paragraph (b) and the word “and” immediately preceding that sub-paragraph;
in paragraph (3), sub-paragraph (b);
in paragraph (4), the words “an administrative receiver of the company has vacated office under paragraph (1)(b), or”; and
paragraph (5).
In paragraph (1) of Article 25 of the Order (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
Paragraph (3) of Article 26 of the Order (appointment of administrator) has effect as if it enabled an application for an order under paragraph (2) of that Article to be made by the Commission.
Subject to sub-paragraph (2) below, Article 27 of the Order (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that Article— Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act or paragraph (a) of the seventh criterion in section 45(3) of this Act. In paragraph (4) of that Article as applied to a building society, the reference to any power conferred by the Order or the Companies (Northern Ireland) Order 1986 or by the memorandum or articles of association is a reference to any power conferred by this Act or by the society’s memorandum or rules. Subsection (8) of section 45 of this Act applies for the purposes of sub-paragraph (1)(b) above as it applies for the purposes of the seventh criterion in subsection (3) of that section.
Subject to sub-paragraph (3) below, paragraph 17 of Schedule 1 to the Order (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society. No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act. No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the High Court, or by meetings summoned under Article 35(1) or 37(2) of the Order (as modified by paragraph 43 or 45 below).
In Article 28 of the Order (power to deal with charged property etc.)—
paragraph (1) is omitted; and
for paragraphs (3) and (4) there is substituted the following paragraph—
Article 29 of the Order (general duties of administrator) has effect as if, instead of the requirement imposed by paragraph (3), it required the administrator of a building society to summon a meeting of the society’s creditors if— That Article also has effect as if it required the administrator of a building society to summon a meeting of the society’s shareholding members if—
In paragraph (4) of Article 31 of the Order (vacation of office) as applied to a building society, the words “in priority to any security to which Article 28(1) then applies” are omitted.
Paragraph (1) of Article 35 of the Order (statement of proposals) as applied to a building society has effect as if— In paragraph (2) of that Article as so applied, references to members of the society do not include references to holders of shares in the society.
Article 36 of the Order (consideration of proposals by creditors' meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.
Article 37 of the Order (approval of substantial revisions) as applied to a building society has effect as if— In paragraph (3) of that Article as so applied, references to members of the society do not include references to holders of shares in the society.
Paragraph (1) of Article 39 of the Order (protection of interests of creditors and members) has effect—
as if it enabled the Commission or Investor Protection Board to apply to the High Court by petition for an order under that section; and
in relation to an application by the Commission or that Board, as if the words “(including at least himself)” were omitted.
In Article 48 of the Order (receivership accounts), “prescribed” means prescribed by regulations made by statutory instrument by the Commission.
In paragraph (1) of Article 49 of the Order (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
Article 50 (payment of debts out of assets subject to floating charge) and Articles 52 to 59 (administrative receivers) of the Order are omitted.
Section 43.
In subsection (4) of section 1 of the 1986 Act (the Building Societies Commission), for paragraph (c) there shall be substituted the following paragraph—.
In section 4 of the 1986 Act (annual and other reports), subsection (2) shall cease to have effect.
In subsection (3) of section 9 of the 1986 Act (authorisation to raise funds and borrow money), paragraph (d) and the word “or” immediately preceding that paragraph shall cease to have effect. In subsection (7), for the words “subsidiary or associated body” there shall be substituted the words “connected undertaking”. “qualifying deferred shares” means deferred shares which constitute own funds of the society, After that subsection there shall be inserted the following subsection—
“administrator”, in relation to a participating institution, means an administrator of the institution under Part II of the Insolvency Act 1986 or Part III of the Insolvency (Northern Ireland) Order 1989;
In subsection (5) of section 25 of the 1986 Act (the Investor Protection Fund), in the definition of “the expenses attributable to the insolvency” for the words “paragraphs (a) to (d)” there shall be substituted the words “paragraphs (a) to (c)”. In subsection (7) of that section, after the word “authorises” there shall be inserted the words “the Bank of England or”.
In subsection (2) of section 25A of the 1986 Act (meaning of “insolvency” etc.), for the word “society” there shall be substituted the word “institution”.
In subsection (3) of section 27 of the 1986 Act (payments to investors), for the words “such other authorised institution or building society” there shall be substituted the words “such institution (whether the Bank of England, an authorised institution or a building society)”. In subsection (4A) of that section, after the word “liquidator”, in each place where it occurs, there shall be inserted the words “or administrator”. In subsection (9) of that section, after the word “liquidator”, in both places where it occurs, there shall be inserted the words “or administrator”. In subsection (9A)(a) of that section, after the word “liquidator”, in both places where it occurs, there shall be inserted the words “or administrator”.
After section 27 of the 1986 Act there shall be inserted the following section—
For subsection (6) of section 28 of the 1986 Act (liability of insolvent society in respect of payments made by Board) there shall be substituted the following subsection—
In subsection (3) of section 29A of the 1986 Act (power to obtain information), after the word “liquidator” there shall be inserted the words “or administrator”.
For subsections (1) to (3) of section 31 of the 1986 Act (voluntary schemes) there shall be substituted the following subsections—
Section 41 of the 1986 Act (power to direct application to renew authorisation) shall become permanent; and accordingly subsections (14) to (16) of that section shall cease to have effect. In subsection (6) of that section, for paragraph (b) there shall be substituted the following paragraph—. In subsection (7) of that section, for paragraphs (a) and (b) there shall be substituted the following paragraphs—. For subsection (13) of that section there shall be substituted the following subsection— For subsection (17) of that section there shall be substituted the following subsection—
In subsection (5)(b) of section 42 of the 1986 Act (imposition of conditions on current authorisation), for the words “subsidiary or other associated body” there shall be substituted the words “connected undertaking”. At the beginning of subsection (7) of that section there shall be inserted the words “Subject to section 42A”.
In subsection (1) of section 43 of the 1986 Act (revocation of authorisation), for the word “or” immediately following paragraph (c) there shall be substituted the following paragraphs—. For subsection (7) of that section there shall be substituted the following subsections—
In subsection (4) of section 44 of the 1986 Act (reauthorisation), for paragraph (b) there shall be substituted the following paragraph—. In subsection (5) of that section, in paragraph (a), for the words “are or include” there shall be substituted the words “include either of”. For subsection (9A) of that section there shall be substituted the following subsection— For subsection (10) of that section there shall be substituted the following subsection—
Section 51 of the 1986 Act (powers to avoid apparent association with other bodies) shall cease to have effect.
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,”. In subsection (2) of that section— Subsection (3) of that section shall cease to have effect. In subsection (4) of that section— In subsection (5) of that section— For subsection (6) of that section there shall be substituted the following subsections— For subsection (9) of that section there shall be substituted the following subsection— For subsection (13) of that section there shall be substituted the following subsection—
After section 52 of the 1986 Act there shall be inserted the following section—
In subsection (2) of section 53 of the 1986 Act (confidentiality of information obtained by Commission)— In subsection (3) of that section, after the word “enable” there shall be inserted the words “or assist”. In subsection (11) of that section, for the words “subsidiary or associated body” there shall be substituted the words “connected undertaking”. In subsection (14) of that section, for the word “subsidiaries” there shall be substituted the words “subsidiary undertakings”.
In subsection (3A) of section 54 of the 1986 Act (information disclosed to Commission from other sources), after the word “enabling”, in both places where it occurs, there shall be inserted the words “or assisting”.
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”.
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”. In subsections (3) and (4) of that section— In subsections (6) and (8) of that section, for the words “subsidiary or associated body” there shall be substituted the words “connected undertaking”.
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”.
In subsection (1) of section 65 of the 1986 Act (restrictions on loans etc. to directors)— In subsection (10) of that section—
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”. 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. In subsection (7) of that section, for the words “an advance” there shall be substituted the words “a loan”.
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”.
In subsection (2) of section 69 of the 1986 Act (records of income of related businesses)— In subsections (7)(b) and (8) of that section, after the words “its directors” there shall be inserted the words “and other officers”. 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”.
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”.
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”. In subsection (6) of that section, for the words “statement in writing” there shall be substituted the word “record”. In subsection (10) of that section, for the following, namely— there shall be substituted the words “connected undertakings”. Subsection (10A) of that section shall cease to have effect.
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”.
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”.
In subsection (1) of section 75 (directors' report)— After that subsection there shall be inserted the following subsection— In subsection (2) of that section— 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”.
In subsection (2) of section 76 of the 1986 Act (summary financial statement for members and depositors)— In subsection (9)(a) of that section, for paragraph (a) there shall be substituted the following paragraph—.
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”. Subsection (5) of that section shall cease to have effect. 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”.
In subsection (2) of section 82 of the 1986 Act (auditor’s duties to Commission and related rights)— In subsection (3) of that section, paragraph (d) shall cease to have effect. In subsection (4) of that section, for the words “subsidiary undertakings or other associated bodies linked by resolution”, in both places where they occur, there shall be substituted the words “connected undertakings”. In subsection (8) of that section, for the words “subsidiary undertakings or other associated bodies” there shall be substituted the words “connected undertakings”.
Subsection (1) of section 84 of the 1986 Act (investigation of complaints: supplementary provisions) shall cease to have effect. In subsections (2), (3), (4) and (5) of that section, for the words “associated body” there shall be substituted the words “connected undertaking”. In subsection (9) of that section, for the words “section 83(5)” there shall be substituted the words “section 83(4)”. In subsection (10) of that section, for the words “section 83(3) or (5)” there shall be substituted the words “section 83(3) or (4)”. In subsection (11) of that section, for the words “associated body's” there shall be substituted the words “connected undertaking's”.
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”.
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”.
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—
For section 92 of the 1986 Act there shall be substituted the following section—
In subsection (2) of section 93 of the 1986 Act (amalgamations)—
for paragraph (a) there shall be substituted the following paragraph—; and
for paragraph (c) there shall be substituted the following paragraph—.
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”.
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)”. Subsections (7) to (9) of that section shall cease to have effect.
In subsection (1) of section 96 (mergers: compensation for loss of office etc.)— 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”. 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)”. 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”.
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,”. In subsection (3) of that section, the words from “and for the purposes” to the end shall cease to have effect. “the requisite shareholders” resolution' has the meaning given by paragraph 30(1) of Schedule 2; After that subsection there shall be inserted the following subsection—
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”.
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”.
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”.
Section 105 of the 1986 Act (limited power to anticipate future statutory instrument powers) shall cease to have effect.
Section 108 of the 1986 Act (power to require building society to change misleading name) shall cease to have effect.
In subsection (2) of section 112 of the 1986 Act (offences: liability of officers etc.), after the words “section 9(11),” there shall be inserted the words “section 43A(7),”.
Section 118 of the 1986 Act (qualifying asset holding for certain powers) shall cease to have effect.
In subsection (1) of section 119 of the 1986 Act (interpretation)— In subsection (2) of that section, for the word “advances” there shall be substituted the word “loans”. In subsection (3) of that section— After subsection (3) of that section there shall be inserted the following subsection— For subsection (4) of that section there shall be substituted the following subsection—
In subsection (1) of section 122 of the 1986 Act (Northern Ireland), the words “section 15,” shall cease to have effect.
In paragraph 11(1) of Schedule 1 to the 1986 Act (performance of functions), for the words “any member or members of the Commission” there shall be substituted the following paragraphs—.
Part I of Schedule 2 to the 1986 Act (establishment, incorporation and constitution) shall be amended as follows. 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— Sub-paragraph (5) of that paragraph shall cease to have effect. In sub-paragraph (4) of paragraph 3 (the rules)— A building society may by special resolution alter its purposes, alter its powers or alter its rules. In sub-paragraph (4) of that paragraph, the words “subject to paragraph 19 below” shall cease to have effect. In sub-paragraph (1) of paragraph 8 (joint borrowers), for the words “an advance” there shall be substituted the words “a loan”. 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”. Every building society shall maintain a register of members showing—
Part III of Schedule 2 to the 1986 Act (meetings, resolutions and postal ballots) shall be amended as follows. 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 instruments appointing proxies to vote at the meeting. 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, in the case of paragraphs (a) and (b), to sub-paragraph (3) below. 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— 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. 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,”. In paragraph 26 (special resolutions), after the words “as a special resolution” there shall be inserted the words “, or as a shareholding members' resolution,”. After paragraph 27 there shall be inserted the following paragraph— 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. In sub-paragraph (2) of paragraph 30 (transfer resolutions)— In sub-paragraph (3) of that paragraph— In sub-paragraph (5) of that paragraph, for the words “special resolution” there shall be substituted the words “shareholding members' resolution”. In sub-paragraph (1) of paragraph 31 (members' rights to propose and circulate resolutions)— 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)”. 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. A person making a declaration in pursuance of sub-paragraph (1) above shall—
After paragraph 5 of Schedule 5 to the 1986 Act (the Building Societies Investor Protection Board) there shall be inserted the following paragraph—
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”.
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”. In paragraphs 1, 2, 5 and 6 of that Schedule— In paragraphs 4 and 8 of that Schedule, for the word “advances” there shall be substituted the word “loans”.
In paragraph 5 of Schedule 11 to the 1986 Act (auditors: appointment, tenure and qualifications)—
in sub-paragraph (2)(c), for the word “subsidiary” there shall be substituted the words “subsidiary undertaking”; and
in sub-paragraph (4), for the words “sub-paragraph (1)(f)” there shall be substituted the words “sub-paragraph (1)(b)”.
In Part I of Schedule 12 to the 1986 Act (schemes for investigation of complaints), for the words “Parts II and III of this Schedule” there shall be substituted the words “Part III of this Schedule”. Part II of that Schedule (matters of complaint) shall cease to have effect. In paragraph 2 of Part III of that Schedule (other requirements)— In paragraphs 3 to 5, 6(1) and 7 of that Part of that Schedule, for the words “associated body”, in each place where they occur, there shall be substituted the words “connected undertaking”. In paragraph 6(3) of that Part of that Schedule—
Schedule 13 to the 1986 Act (recognition etc. of schemes for investigation of complaints) shall be amended as follows. In paragraph 1 (preliminary)— In paragraph 4(2) (procedure for recognition: Commission’s initiative), for the words “prescribed matters of complaint” there shall be substituted the words “relevant services”. In paragraph 5(2) (procedure for recognition: submission by societies), for the words “of the prescribed matters of complaint”, in both places where they occur, there shall be substituted the words “relevant services”. In sub-paragraph (1) of paragraph 6 (procedure on accession to schemes), after the words “building society” there shall be inserted the words “or connected undertaking of a building society”. In sub-paragraph (2) of that paragraph— In sub-paragraph (3) of that paragraph, for the words “the prescribed matters of complaint” there shall be substituted the words “the relevant services”. The central office, on receiving such a notice from a connected undertaking of a society, shall, if satisfied that the scheme is a recognised scheme to the extent required to enable the society to comply with its duty under section 83(4) in relation to the relevant services specified in the notice record the accession of the undertaking to the scheme in the public file of the society. In sub-paragraph (4) of that paragraph— In paragraph 7(2) (withdrawal of recognition), for the words “prescribed matters of complaint” there shall be substituted the words “relevant services”. In sub-paragraph (1) of paragraph 10 (withdrawal from membership), after the words “building society” there shall be inserted the words “or connected undertaking of a building society”. In sub-paragraph (2) of that paragraph— The central office, on receiving such a notice from a connected undertaking of a society, if satisfied that its withdrawal from the scheme will not result in a failure by the society to comply with the duty imposed on it by section 83(4), shall confirm the withdrawal of the undertaking from the scheme; but, if the central office is not so satisfied, the central office shall withhold its confirmation. In sub-paragraph (4) of that paragraph— In sub-paragraph (5) of that paragraph—
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)”. In sub-paragraph (1) of paragraph 4 of that Schedule— 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)”. After that paragraph there shall be inserted the following paragraph— In paragraph 7(1) of that Schedule—
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—
In paragraph 1 of Schedule 16 to the 1986 Act (mergers: supplementary provisions)— In any case where merger resolutions are to be moved at any meeting of a building society, every notice of the meeting shall have included in or with it— In this paragraph and paragraph 5 below— In sub-paragraph (1) of paragraph 5 of that Schedule— In sub-paragraph (2) of that paragraph, after the words “merger statement” there shall be inserted the words “or transfer proposal notification”.
In Schedule 20 to the 1986 Act (transitional and saving provisions), the following shall cease to have effect, namely—
in paragraph 1, the definitions of “existing society” and “existing rules”; and
paragraphs 2 to 4, 7 to 15 and 17 and 18.
Section 46(1).
At any time during the period beginning two months after the passing of this Act and ending with the commencement of sections 1 and 2 of this Act, a building society may, for the purposes of the transition to the 1986 Act as amended by those sections— On altering its purpose or principal purpose, its powers and its rules under this paragraph, the building society shall determine the date on which the society intends the alterations to take effect and the record of the alterations sent to the central office shall specify that date (in this paragraph referred to as “the specified date”). Subject to sub-paragraph (4) below, the central office, if satisfied that the alterations are in conformity with the 1986 Act as amended by sections 1 and 2 of this Act, shall— No registration of a record of alterations shall be effected by the central office under sub-paragraph (3) above before the end of the period of 21 days beginning with the date on which it receives copies of the record under sub-paragraph (1) above. A record of alterations registered under this paragraph shall take effect on the specified date or, if registration of the record is not effected until a later date, that later date.
Before the end of the transitional period each existing building society shall— On altering its purpose or principal purpose, its powers and its rules under this paragraph, the building society shall determine the date on which the society intends the alterations to take effect and the record of the alterations sent to the central office shall specify that date (in this paragraph referred to as “the specified date”). No date shall be specified under sub-paragraph (2) above which falls more than six months after the date of the meeting at which the special resolution was agreed. Subject to sub-paragraph (5) below, the central office, if satisfied that the alterations are in conformity with the 1986 Act as amended by sections 1 and 2 of this Act, shall— No registration of a record of alterations shall be effected by the central office under sub-paragraph (4) above before the end of the period of 21 days beginning with the date on which it receives copies of the record under sub-paragraph (1) above. A record of alterations registered under this paragraph shall take effect on the specified date or, if registration of the record is not effected until a later date, that later date. In this paragraph—
If the central office has not, before the end of the transitional period, received from an existing building society copies of a record of alterations in accordance with paragraph 1 or 2 above, the society shall be treated as having, by special resolution— The Commission may, by order made by a statutory instrument made with the consent of the Treasury, prescribe model rules for building societies for the purposes of this paragraph. Where, under this paragraph, a society is treated as having by special resolution, altered its purpose or principal purpose, its powers and its rules, the central office shall prepare three copies of a record of the alterations and shall— A record of alterations so registered shall have effect for all purposes of the society’s memorandum and rules until further alterations are made under paragraph 4 of Schedule 2 to the 1986 Act. Such fee as is prescribed shall be due from the society to the Chief Registrar for the registration of a record of alterations under this paragraph. In this paragraph—
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. 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.
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).
Subject to subsection (7) of section 6B of the 1986 Act— The assumption is that section 11 of the 1986 Act had effect at all material times—
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.
Nothing in section 9 of this Act shall affect the operation of the 1986 Act in relation to— This sub-paragraph applies to an individual if— In this paragraph— 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.