Legalize / United Kingdom / Public General Act

Building Societies Act 1986

Type Public General Act

Publication 1986-07-25

Last updated 2025-01-06

State In force

Department Statute Law Database

Source legislation.gov.uk

articles 16

Reform history JSON API

(i) as director of any of its connected undertakings, or

(ii) otherwise in connection with the management of the affairs of the society or any of its connected undertakings.

(2) The reference in sub-paragraph (1) to consideration includes benefits paid or receivable other than in cash; and–

(a) the nature of any such consideration must be disclosed, and

(b) in relation to such consideration the reference to its amount is to the estimated money value of the benefit.

(3) The reference in sub-paragraph (1) to third parties is to persons other than –

(a) the director himself or a person connected with him or a body corporate associated with him, and

(b) the society or any of its connected undertakings.

Supplementary provisions regarding directors' remuneration

6

(1) The following applies with respect to the amounts to be shown under paragraphs 1 to 5.

(2) The amount in each case includes all relevant sums paid by or receivable from–

(a) the society;

(b) the society’s connected undertakings; and

except sums to be accounted for to the society or any of its connected undertakings.

(3) References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate associated with him (but not so as to require an amount to be counted twice).

7

(1) The amounts to be shown for any financial year under paragraphs 1 to 5 are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.

(2) But where–

(a) any sums are not shown in a note to the accounts for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 6(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or

(b) any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year,

those sums must, to the extent to which the liability is released or not enforced or they are charged as mentioned (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and must be distinguished from the amounts to be shown apart from this provision.

8

(1) Where the chief executive of the society is not also a director of the society, he is deemed, for the purposes of paragraphs 1 to 7, to be a director of the society.

(2) In such circumstances there must be a note in the accounts specifying that the chief executive has been so deemed to be a director.

Interpretation of provisions regarding directors remuneration

9

(1) Sub-paragraphs (2) and (3) apply for the interpretation of paragraphs 1 to 8.

(2) For the purposes of paragraphs 1 and 2 a reference to a connected undertaking of the society is to any undertaking which is a connected undertaking at the time the services were rendered, and for the purposes of paragraph 4 is a reference to a connected undertaking immediately before the loss of office as a director.

(3) The following definitions apply–

(a) “pension scheme” has the meaning assigned to “retirement benefits scheme” by section 611 of the Income and Corporation Taxes Act 1988;

(b) “retirement benefits” has the meaning assigned to “relevant benefits” by section 612(1) and (2) of that Act.

(4) In paragraphs 5 and 6, references to a person being “connected” with a director, and to a director being “associated with” a body corporate, shall be construed in accordance with section 70 of this Act.

Directors' loans and transactions

10

(1) This paragraph applies, subject to sub-paragraph (4), in relation to–

(a) loans from and other transactions and arrangements with the society described in section 65 (which restricts loans to and other transactions and arrangements with directors and persons connected to them), other than those to which section 65(5) and (6) applies, and

(b) in the case of a society the directors of which are required to prepare consolidated group accounts, loans from and other transactions and arrangements with a subsidiary undertaking of the society to which paragraph (a) would apply were the society rather than the subsidiary undertaking a party to them.

(2) The notes to the annual accounts must contain a statement, in relation to such loans, transactions and arrangements, showing–

(a) the aggregate amounts outstanding under them at the end of the financial year; and

(b) the numbers of persons for whom such loans, transactions and arrangements were made.

(3) The notes to the annual accounts must, in relation to any loan, or other transaction or arrangement subsisting during or at the end of the financial year, make the following disclosures–

(a) where a copy of it or a memorandum of its terms is included in the register maintained under section 68, the existence of the register and the availability of requisite particulars from it for inspection must be disclosed;

(b) where it comes within paragraph (1)(b), its particulars must be disclosed unless it was one which would, had the subsidiary undertakings of the society formed part of the society, have been exempted from the obligations imposed by section 68.

(4) This paragraph applies in relation to loans to, and other transactions and arrangements with, a person connected with a director of the society where the society (or in the case of a subsidiary undertaking incorporated in the United Kingdom, the subsidiary undertaking) has notice of the connection between that director and that person.

Disclosure of auditors' remuneration

11

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

Persons who are to be regarded as associates of a society’s auditors

12

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

PART 2 — Information about employees

13

(1) The following information with respect to the employees of a building society must be given in notes to the society’s individual accounts–

(a) the average number of persons employed by the society in the financial year, and

(b) the average number of persons so employed within each category of persons employed by the society.

(2) The average number required by paragraph (1)(a) or (b) is determined by dividing the relevant annual number by the number of complete calendar months in the financial year.

(3) The relevant annual number is determined by ascertaining for each complete calendar month in the financial year–

(a) for the purposes of paragraph (1)(a), the number of persons employed under contracts of service by the society in that month (whether throughout the month or not);

(b) for the purposes of paragraph (1)(b), the number of persons in the category in question of persons so employed;

and, in either case, adding together all the monthly numbers.

(4) In respect of all persons employed by the society during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph (1)(a) there must also be stated the aggregate amounts respectively of–

(a) wages and salaries paid or payable in respect of that year to those persons;

(b) social security costs incurred by the society on their behalf; and

SCHEDULE 10B

PART 1 — Societies not required to prepare consolidated group accounts

Subsidiary undertakings

1

(1) The following information must be given where at the end of the financial year the society has subsidiary undertakings but is not required to prepare consolidated group accounts.

(2) The name of each subsidiary undertaking shall be stated.

(3) There must be stated with respect to each subsidiary undertaking–

(a) if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b) if it is unincorporated, the address of its principal place of business.

(4) The specific reason why each subsidiary undertaking is not required to be included in consolidated group accounts must be stated.

Holdings in subsidiary undertakings

2

(1) There must be stated in relation to shares of each class held by the society in a subsidiary undertaking–

(a) the identity of the class; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

(2) The shares held by or on behalf of the society itself must be distinguished from those attributed to the society which are held by or on behalf of a subsidiary undertaking.

Financial information about subsidiary undertakings

3

(1) There must be disclosed with respect to each subsidiary undertaking–

(a) the aggregate amount of its capital and reserves as at the end of its relevant financial year; and

(b) its profit or loss for that year.

(2) The information referred to in sub-paragraph (1) need not be given if the society’s investment in the subsidiary undertaking is included in the society’s accounts by way of the equity method of valuation or if–

(a) the subsidiary undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b) the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(3) Information otherwise required by this paragraph need not be given if it is not material–

(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate section 72F(2), or

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

(4) For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is–

(a) if its financial year ends with that of the society, that year, and

(b) if not, its financial year ending last before the end of the society’s financial year.

Financial years of subsidiary undertakings

4

Where—

(a) disclosure is made under paragraph 3(1) with respect to a subsidiary undertaking; and

(b) that undertaking’s financial year does not end with that of the society,

there must be stated in relation to that undertaking the date on which its last financial year before the end of the society’s financial year ended.

Significant holdings in undertakings other than subsidiary undertakings

5

(1) The information required by paragraphs 6 and 7 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not a subsidiary undertaking of the society.

(2) A holding is significant for this purpose if–

(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b) the amount of the holding (as stated or included in the society’s accounts) exceeds one-fifth of the amount (as so stated) of the society’s assets.

6

(1) The name of the undertaking must be stated.

(2) There must be stated–

(a) if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b) if it is unincorporated, the address of its principal place of business.

(3) There must also be stated–

(a) the identity of each class of shares in the undertaking held by the society; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

(4) Information otherwise required by this paragraph need not be given if it is not material–

(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or ,where appropriate, section 72F(2), or

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

7

(1) There must also be stated–

(a) the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and

(b) its profit or loss for that year.

(2) That information need not be given if the investment of the society in all undertakings in which it has a significant holding is shown, in aggregate, in the notes to the accounts by way of the equity method of valuation.

(3) That information need not be given in respect of an undertaking if

(a) the undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b) the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(4) Information otherwise required by this paragraph need not be given if it is not material–

(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate, section 72F(2), or

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

(5) For the purposes of this paragraph the “relevant financial year” of an undertaking is –

(a) if its financial year ends with that of the society, that year, and

(b) if not, its financial year ending last before the end of the society’s financial year.

Construction of references to shares held by society

8

(1) References in this Part of this Schedule to shares held by a society shall be construed as follows.

(2) For the purposes of paragraphs 2 and 3–

(a) shares held by a subsidiary undertaking, or by a person acting on behalf of the society or a subsidiary undertaking are treated as if they were held by the society; but

(b) shares held on behalf of a person other than the society or a subsidiary undertaking are not treated as if they were held by the society.

(3) For the purposes of paragraphs 5 to 7–

(a) shares held on behalf of a society by any person are treated as if they were held by the society; but

(b) shares held on behalf of a person other than the society are not treated as if they were held by the society.

(4) For the purposes of paragraphs 2 to 7, shares held by way of security shall be treated as if they were held by the person providing the security –

(a) where apart from the right to exercise them for the purposes of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions, and

(b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in his interests.

PART 2 — Societies required to prepare consolidated group accounts

Subsidiary undertakings

9

(1) The following information must be given with respect to the undertakings that are subsidiary undertakings of the society at the end of the financial year.

(2) The name of each undertaking must be stated.

(3) There must be stated–

(a) if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b) if it is unincorporated, the address of its principal place of business.

(4) It must be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reason for excluding it from the consolidation must be given.

(5) It must be stated with respect to each subsidiary undertaking of the society by virtue of which of the conditions specified in section 1162 of the Companies Act 2006 it is a subsidiary undertaking of the society.

(6) That information need not be given in relation to a subsidiary undertaking if—

(a) the relevant condition is that specified in subsection (2)(a) of that section, and

(b) the society that is its immediate parent undertaking (within the meaning of section 1162 of the Companies Act 2006) holds the same proportion of the shares in the undertaking as it holds voting rights.

Holdings in subsidiary undertakings

10

(1) The following information must be given with respect to the shares of a subsidiary undertaking held—

(a) by the society, and

(b) by the group,

and the information required under paragraphs (a) and (b) must (if different) be shown separately.

(2) There must be stated–

(a) the identity of each class of shares held, and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

Financial information about subsidiary undertakings not included in the consolidation

11

(1) There must be shown with respect to each subsidiary undertaking not included in the consolidation–

(a) the aggregate amount of its capital and reserves as at the end of its relevant financial year, and

(b) its profit or loss for that year.

(2) The information referred to in sub-paragraph (1) need not be given if the group’s investment in the subsidiary undertaking is included in the accounts by way of the equity method of valuation or if –

(a) the subsidiary undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b) the holding of the group is less than 50 per cent of the nominal value of the shares in the subsidiary undertaking.

(3) Information otherwise required by this paragraph need not be given if it is not material—

(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

(4) For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is –

(a) if its financial year ends with that of the society, that year, and

(b) if not, its financial year ending last before the end of the society’s financial year.

Associated undertakings

12

(1) The following information must be given where an undertaking included in the consolidation has an interest in an associated undertaking.

(2) The name of the associated undertaking must be stated.

(3) There must be stated–

(a) if the associated undertaking is incorporated outside the United Kingdom, the country in which it is incorporated, and

(b) if it is unincorporated, the address of its principal place of business.

(4) The following information must be given with respect to the shares of the associated undertaking held–

(a) by the society; and

(b) by the group,

and the information required under paragraphs (a) and (b) must (if different) be given separately.

(5) There must be stated–

(a) the identity of each class of shares in the associated undertaking held; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

Other significant holdings of society or group

13

(1) The information required by paragraphs 14 and 15 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not one of its subsidiary undertakings and does not fall within paragraph 12 (associated undertakings).

(2) A holding is significant for this purpose if–

(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b) the amount of the holding (as stated or included in the society’s individual accounts) exceeds one-fifth of the amount of the society’s assets (as so stated).

14

(1) The name of the undertaking must be stated.

(2) There must be stated –

(a) if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b) if it is unincorporated, the address of its principal place of business.

(3) There must also be stated–

(a) the identity of each class of shares in the undertaking held by the society; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

(4) The information otherwise required by this paragraph need not be given if it is not material—

(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

15

(1) There must also be stated–

(a) the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year; and

(b) its profits or loss for that year.

(2) That information need not be given in respect of an undertaking if–

(a) the undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b) the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(3) Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

(4) For the purposes of this paragraph the “relevant financial year” of an undertaking is–

(a) if its financial year ends with that of the society, that year, and

(b) if not, its financial year ending last before the end of the society’s financial year.

16

(1) The information required by paragraphs 17 and 18 must be given where at the end of the financial year the group has a significant holding in an undertaking which is not a subsidiary undertaking of the society and does not fall within paragraph 12 (associated undertakings).

(2) A holding is significant for this purpose if–

(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b) the amount of the holding (as stated or included in the group accounts) exceeds one-fifth of the amount of the group’s assets (as so stated).

17

(1) The name of the undertaking must be stated.

(2) There must be stated–

(a) if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b) if it is unincorporated, the address of its principal place of business.

(3) There must also be stated–

(a) the identity of each class of shares in the undertaking held by the group; and

(b) the proportion of the nominal value of the shares of that class represented by those shares.

(4) Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

18

(1) There must also be stated–

(a) the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year; and

(b) its profit or loss for that year.

(2) That information need not be given if–

(a) the undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere; and

(b) the holding of the group is less than 50 per cent of the nominal value of the shares in the undertaking.

(3) Information otherwise required by this paragraph need not be given if it is not material—

(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.

(4) For the purposes of this paragraph the “relevant financial year” of an undertaking is–

(a) if its financial year ends with that of the society, that year, and

(b) if not, its financial year ending last before the end of the society’s financial year.

Construction of references to shares held by society or group

19

(1) References in this Part of this Schedule to shares held by the society or the group shall be construed as follows.

(2) For the purposes of paragraphs 10, 12(4) and (5) and 13 to 15–

(a) shares held on behalf of a society by any person are treated as if they were held by the society; but

(b) shares held on behalf of a person other than the society are not treated as if they were held by the society.

(3) References to shares held by the group are to any shares held by or on behalf of the society or any of its subsidiary undertakings; but shares held on behalf of a person other than the society or any of its subsidiary undertakings are not treated as if they were held by the group.

(4) Shares held by way of security are treated as if they were held by the person providing the security in the following cases–

(a) where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions;

(b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of security, or of realising it, the rights attached to the shares are exercisable only in his interests.

Interpretation: general

20

In this Schedule, “group” means a building society and its subsidiary undertakings.

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

119A

(1) In this Act “associated undertaking”, in relation to a building society, means an undertaking (other than a subsidiary undertaking of the society)—

(a) in which the society (or the group of which the society is a member) holds a participating interest, and

(b) over whose operating and financial policy the society (or group) exercises a significant influence.

(2) A “participating interest” means an interest in the shares of the undertaking held on a long term basis for the purpose of securing a contribution to the activities of the society (or group) by the exercise of control or influence arising from or related to that interest.

(3) For this purpose—

(a) a holding of 20% or more of the shares of an undertaking is presumed to be a participating interest unless the contrary is shown;

(b) an “interest in shares” includes—

(i) an interest that is convertible into an interest in shares, and

(ii) an option to acquire shares or any such interest,

and an interest or option falls within sub-paragraph (i) or (ii) notwithstanding that the shares to which it relates are, until the conversion or the exercise of the option, unissued;

(4) A holding of 20% or more of the voting rights in an undertaking is presumed to result in the exercise of such influence as is mentioned in subsection (1)(b), unless the contrary is shown.

(5) For this purpose—

(a) the voting rights in an undertaking means the rights conferred on shareholders in respect of their shares or, in the case of an undertaking not having a share capital, on members, to vote on all, or substantially all, matters affecting the undertaking; and

(b) the provisions of paragraphs 5 to 11 of Schedule 7 to the Companies Act 2006 (rights to be taken into account and attribution of rights) apply in determining whether the society (or the group) holds 20% or more of the voting rights in an undertaking.

(6) References in this section to the group of which the society is a member at any time are to the undertakings that would fall to be included in the consolidation if consolidated group accounts were to be drawn up by the society at that time.

(7) An undertaking is not an “associated undertaking” of a building society for the purposes of this Act if, in such accounts, it would fall to be dealt with as a joint venture (that is, an undertaking managed jointly with one or more undertakings not included in the consolidation).

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

Class 1 and class 2 advances

Special provisions as regards investors.

Power to make prohibition orders.

Powers to petition for winding up etc.

The determination: notification, effect, appeal.

Variation and revocation of transfer directions

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

Rights of appeal.

Directors, etc, not to accept commissions in connection with loans.

Consistency of accounts

Auditor’s duties and powers .

Power to alter priorities on dissolution and winding up

Application of bank insolvency and administration legislation to building societies

Acquisition or establishment of a business.

Mergers; provisions supplementing ss. 93 and 94.

Protective provisions for specially formed successors.

Mergers; provisions supplementing ss. 93 and 94.

Consequences of false declaration.

Provisions supplementary to sections 102B and 102C.

Public file of the society.

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

72L

(1) If in any financial year—

(a) a building society is or has been party to arrangements that are not reflected in its balance sheet, and

(b) at the balance sheet date the risks or benefits arising from those arrangements are material,

72M

(1) The information specified in Schedule 10C must be given in notes to a building society’s annual accounts.

(2) The Treasury may, by order, modify the provisions of Schedule 10C.

(3) An order under this section may—

(a) make consequential amendments of or repeals in other provisions of this Act;

(b) make such transitional or saving provisions as appear to the Treasury to be necessary or expedient;

(4) The power to make an order under this section is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

(5) In this section “modify” includes amend, add to or repeal.

78B

(1) The senior statutory auditor means the individual identified by the firm as senior statutory auditor in relation to the audit in accordance with the standards or guidance mentioned in section 504(1) of the Companies Act 2006.

(2) The person identified as senior statutory auditor must be eligible for appointment as auditor of the building society in question (see Chapter 2 of Part 42 of the Companies Act 2006).

(3) The senior statutory auditor is not, by reason of being named or identified as senior statutory auditor or by reason of his having signed the auditor’s report, subject to any civil liability to which he would not otherwise be subject.

78C

(1) The copy of the auditor’s report sent ... under section 81, and every copy of the auditor’s report that is published by or on behalf of the society, must—

(a) state the name of the auditor and (where the auditor is a firm) the name of the person who signed it as senior statutory auditor, or

(b) if the conditions in section 78D (circumstances in which names may be omitted) are met, state that a resolution has been passed and notified ... in accordance with that section.

(1A) If more than one person is appointed as auditor, the reference in subsection (1)(a) to the name of the auditor is to be read as a reference to the names of all the auditors.

(2) For the purposes of this section a building society is regarded as publishing the report if it publishes, issues or circulates it or otherwise makes it available for public inspection in a manner calculated to invite members of the public generally, or any class of members of the public, to read it.

(3) If a copy of the auditor’s report is sent to the FCA or published without the statement required by this section, an offence is committed by—

(a) the society, and

(b) every officer of the society who is in default.

(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale.

78D

(1) An auditor’s name and, where the auditor is a firm, the name of the person who signed the report as senior statutory auditor, may be omitted from—

(a) the copy of the report sent ... under section 81, and

(b) published copies of the report,

if the following conditions are met.

(2) The conditions are that the building society—

(a) considering on reasonable grounds that statement of the name would create or be likely to create a serious risk that the auditor or the senior statutory auditor, or any other person, would be subject to violence or intimidation, has resolved by an ordinary resolution that the name should not be stated, and

(b) has given notice of the resolution to the FCA and, if the society is a PRA-authorised person, the PRA , stating—

(i) the name of the society,

(ii) the financial year of the society to which the report relates, and

(iii) the name of the auditor and (where the auditor is a firm) the name of the person who signed the report as senior statutory auditor.

SCHEDULE10C

Disclosure required

1

(1) The following must be shown—

(a) the amount of any remuneration receivable by the society’s auditor , or an associate of the society’s auditor, for the auditing of the annual accounts, and

(b) the amount of any remuneration receivable in respect of the financial year by—

(i) the society’s auditor, or

(ii) any person who was, at any time during that financial year, an associate of the society’s auditor,

for the supply of other services to the society or any associate of the society.

(2) Where the remuneration includes benefits in kind, the nature and estimated money-value of those benefits must also be shown.

(3) Separate disclosure is required in respect of the auditing of the accounts in question and of each type of service specified in paragraph 2, but not in respect of each service falling within a type of service.

(4) Separate disclosure is required in respect of services supplied to the society and its subsidiaries on the one hand and to associated pension schemes on the other.

(5) Where more than one person has been appointed as a society’s auditor in respect of the financial year, separate disclosure is required in respect of the remuneration of each such person and his associates.

(6) Where a building society is required to prepare consolidated group accounts—

(a) those accounts must comply with sub-paragraph (1)(b) as if the undertakings included in the consolidation were a single building society, and

(b) the notes to the individual accounts of—

(i) the society, and

(ii) a subsidiary of the society, where the subsidiary is included in the group accounts and the statutory auditor is the same for both the society and the subsidiary,

do not have to disclose the information required by that provision if the notes state that the group accounts are so required.

Types of service

2

The types of service in respect of which disclosure is required are—

(a) the auditing of accounts of any associate of the society;

(b) audit-related assurance services;

(d) any taxation advisory services not falling within paragraph (c);

(e) internal audit services;

(f) any assurance services not falling within paragraphs (a) to (e);

(g) any services relating to corporate finance transactions entered into, or proposed to be entered into, by or on behalf of the society or any of its associates not falling within paragraphs (a) to (f);

(h) any other non-audit services.

Disclosure not required of remuneration for certain services provided by distant associate

3

(1) Disclosure is not required of remuneration receivable for the supply of services falling within paragraph 2(h) supplied by a distant associate of the society’s auditor where the total remuneration receivable for all of those services supplied by that associate does not exceed—

(a) £10,000, or

(b) 1% of the total audit remuneration received by the society’s auditor in the most recent financial year of the auditor which ended no later than the end of the financial year of the society to which the accounts relate.

(2) In sub-paragraph (1)(b)—

(a) “financial year of the auditor” means—

(i) the period of not more than 18 months in respect of which the auditor’s profit and loss account is required to be made up (whether by law or by or in accordance with the auditor’s constitution (if any)), or

(ii) failing any such requirement, the period of 12 months beginning with 1st April;

(b) “total audit remuneration received” means the total remuneration received for the auditing pursuant to legislation (including that of countries and territories outside the United Kingdom) of any accounts of any person.

Duty of auditor to supply information

4

The auditor of a building society must supply the directors of the society with such information as is necessary to enable the disclosure required by paragraph 1 to be made.

Meaning of “associate” and “distant associate” of auditor

5

(1) This paragraph defines what is meant in this Schedule by an “associate” or a “distant associate” of a building society’s auditor.

(2) The following are associates of a society’s auditor—

(a) any person controlled by the society’s auditor or by any associate of the society’s auditor (whether alone or through two or more persons acting together to secure or exercise control), but only if that control does not arise solely by virtue of the society’s auditor or any associate of the society’s auditor acting—

(i) as an insolvency practitioner in relation to any person,

(ii) in the capacity of a receiver, or a receiver or manager, of the property of a society or other body corporate, or

(iii) as a judicial factor on the estate of any person;

(b) any person who, or group of persons acting together which, has control of the society’s auditor;

(c) any person using a trading name which is the same as or similar to a trading name used by the society’s auditor, but only if the society’s auditor uses that trading name with the intention of creating the impression of a connection between the auditor and that other person;

(d) any person who is party to an arrangement with the society’s auditor, with or without any other person, under which costs, profits, quality control, business strategy or significant professional resources are shared.

(3) Where the society’s auditor is a partnership, the following are also associates of the auditor—

(a) any partner in the society’s auditor;

(b) any body corporate which is in the same group as a body corporate which is a partner in the society’s auditor;

(d) any partnership which has a partner in common with the society’s auditor;

(e) any body corporate which is in the same group as a body corporate which is a partner in a partnership which has a partner in common with the society’s auditor.

(4) Where a society’s auditor is a body corporate (other than one which is also a partnership as defined in sub-paragraph (6)(d)), the following are also associates of the auditor—

(a) any director of the society’s auditor;

(b) any body corporate which is in the same group as a body corporate which is a director of the society’s auditor;

(d) any partnership in which any such body corporate which is in the same group as the society’s auditor is a partner;

(e) any partnership in which a director of the society’s auditor is a partner;

(f) any body corporate which has a director in common with the society’s auditor;

(g) any body corporate which is in the same group as a body corporate which has a director in common with the society’s auditor.

(5) A distant associate of a society’s auditor is a person who is an associate of that auditor by reason only that that person is an associate within one or more of—

(a) sub-paragraph (2)(a) where the person in question is controlled by a distant associate of the society’s auditor and not by the auditor or by an associate who is not a distant associate;

(b) sub-paragraph (3)(c), (d) or (e);

(6) For the purposes of this paragraph—

(a) “acting as an insolvency practitioner” shall be construed in accordance with section 388 of the Insolvency Act 1986 or Article 3 of the Insolvency (Northern Ireland) Order 1989;

(b) “director” includes any person occupying the position of director, by whatever name called;

(d) “partnership” includes a limited liability partnership and a partnership constituted under the law of a country or a territory outside the United Kingdom;

(e) a reference to “a receiver, or a receiver or manager, of the property of a society or other body corporate” includes a receiver, or (as the case may be) a receiver or manager, of part only of that property;

(f) a person able, directly or indirectly to control or materially to influence the operating and financial policy of another person shall be treated as having control of that other person; and

(g) a body corporate is in the same group as another body corporate if one is a subsidiary of the other.

Interpretation

6

In this Schedule—

“associate of the society” means—any subsidiary of the society, other than a subsidiary in respect of which severe long-term restrictions substantially hinder the exercise of rights of the society over the assets or management of that subsidiary, orany associated pension scheme;

“associated pension scheme”, in relation to a building society, means a scheme for the provision of benefits for or in respect of directors or employees (or former directors or employees) of the society or any subsidiary of the society where—the benefits consist of or include any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death or in anticipation of retirement or, in connection with past service, after retirement or death, andeither—a majority of the trustees are appointed by, or by a person acting on behalf of the society or a subsidiary of the society, orthe society, or a subsidiary of the society, exercises a dominant influence over the appointment of the auditor (if any) of the scheme;

“remuneration” includes payments in respect of expenses and benefits in kind;

“subsidiary” means a subsidiary undertaking that is a body corporate.

Removal of auditor on improper grounds

6A

(1) Where an auditor of a building society is removed from office , other than by order of the High Court made under paragraph 6ZA, an application may be made to the High Court under this paragraph.

(2) The persons who may make such an application are—

(a) any member of the society who was also a member at the time of the removal;

(b) the FCA; and

(3) If the court is satisfied that the removal was—

(a) on grounds of divergence of opinion on accounting treatments or audit procedures, or

(b) on any other improper grounds,

it may make such order as it thinks fit for giving relief in respect of the removal.

(4) The court may, in particular—

(a) declare that any resolution of the society removing an auditor, or appointing a new auditor in his place, is void;

(b) require the directors of the society to re-appoint the auditor until the next general meeting of the society;

Duty of auditor to notify appropriate audit authority

8A

(1) Where an auditor of a building society ceases for any reason to hold office, he must notify the appropriate audit authority.

(2) The notice must—

(a) inform the appropriate audit authority that he has ceased to hold office, and

(b) if the auditor resigns, be accompanied by a copy of the auditor’s notice of resignation.

(3) The notice required by this paragraph must also be accompanied by a statement of the reasons for his ceasing to hold office unless—

(a) the auditor resigns, and

(b) the notice of resignation contains a statement under paragraph 7(2)(b).

(4) The auditor must comply with this paragraph—

(a) if the auditor resigns, at the same time as he deposits his notice of resignation at the principal office of the building society;

(b) in any other case, not later than the end of the period of fourteen days beginning with the date on which he ceases to hold office.

(5) A person ceasing to hold office as auditor who fails to comply with this paragraph commits an offence.

(6) If that person is a firm an offence is committed by—

(a) the firm, and

(b) every officer of the firm who is in default.

(7) A person guilty of an offence under this paragraph is liable—

(a) on conviction on indictment, to a fine;

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Duty of building society to notify appropriate audit authority

8B

(1) Where an auditor ceases to hold office before the end of his term of office, the building society must notify the appropriate audit authority.

(2) The notice must—

(a) inform the appropriate audit authority that the auditor has ceased to hold office, and

(b) be accompanied by—

(i) a statement by the society of the reasons for his ceasing to hold office, or

(ii) if the auditor resigns, and his notice of resignation contains a statement under paragraph 7(2)(b), a copy of that statement.

(3) The society must give notice under this paragraph—

(a) if the auditor resigns, not later than the end of the period of fourteen days beginning with the date on which the auditor’s notice of resignation is deposited at the society’s principal office;

(b) in any other case, not later than the end of the period of fourteen days beginning with the date on which the auditor ceases to hold office.

(4) If a building society fails to comply with this paragraph, an offence is committed by—

(a) the society, and

(b) every officer of the society who is in default.

(5) A person guilty of an offence under this paragraph is liable—

(a) on conviction on indictment, to a fine, and

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Interpretation

8C

(1) In this Schedule—

“appropriate audit authority” means—the Secretary of State, orif the Secretary of State has delegated functions under section 1252 of the Companies Act 2006 to a body whose functions include receiving the equivalent notice under section 522 or 523 of that Act, that body;

“audit committee” means a body which performs— the functions referred to in—rule 7.1.3 of the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority under the Financial Services and Markets Act 2000; or rule 2.4 of the Audit Committee Part of the Rulebook made by the Prudential Regulation Authority under that Act; orequivalent functions;

“Audit Regulation” means Regulation 537/2014 of the European Parliament and of the Council on specific requirements regarding statutory audit of public interest entities and repealing Commission Decision 2005/989/EC; and

“competent authority” means the Financial Reporting Council Limited .

(1A) For the purposes of the definition of “audit committee”, 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.

(2) For the purposes of this Schedule, a person is auditor of a building society in respect of a financial year if the auditor is required to report on the accounts of the society for that financial year.

Application of winding up legislation to building societies.

Application of bank insolvency and administration legislation to building societies

Consequences of false declaration.

Provisions supplementary to sections 102B and 102C.

Amendments, repeals, revocations and transitional and saving provisions.

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

89A

(1) On a petition for a winding up order or an application for an administration order in respect of a building society the court may, instead, make a building society insolvency order (under section 94 of the Banking Act 2009 as applied by section 90C below).

(2) A building society insolvency order may be made under subsection (1) only—

(a) on the application of the appropriate authority made with the consent of the Bank of England, or

(b) on the application of the Bank of England.

90C

(1) Parts 2 (Bank Insolvency) and 3 (Bank Administration) of the Banking Act 2009 shall apply in relation to building societies with any modifications specified in an order made under section 130 or 158 of that Act and with the modifications specified in subsection (2) below.

(2) In the application of Parts 2 and 3 of that Act to building societies—

(a) references to “bank” (except in the term “bridge bank” and the terms specified in paragraphs (b) and (c)) have effect as references to “building society”;

(b) references to “bank insolvency”, “bank insolvency order”, “bank liquidation” and “bank liquidator” have effect as references to “building society insolvency”, “building society insolvency order”, “building society liquidation” and “building society liquidator”;

(c) references to “bank administration”, “bank administration order” and “bank administrator” have effect as references to “building society special administration”, “building society special administration order” and “building society special administrator”.

90D

(1) An application for an administration order in respect of a building society may not be determined unless the conditions below are satisfied.

(2) A petition for a winding up order in respect of a building society may not be determined unless the conditions below are satisfied.

(3) A resolution for voluntary winding up of a building society may not be passed unless the conditions below are satisfied.

(4) An administrator of a building society may not be appointed unless the conditions below are satisfied.

(5) Condition 1 is that the FCA , the Bank of England and, if the society is a PRA-authorised person, the PRA have been notified—

(a) by the applicant for an administration order, that the application has been made,

(b) by the petitioner for a winding up order, that the petition has been presented,

(d) by the person proposing to appoint an administrator, of the proposed appointment.

(6) Condition 2 is that a copy of the notice complying with Condition 1 has been filed with the court (and made available for public inspection by the court).

(7) Condition 3 is that—

(a) the period of 7 days , beginning with the day on which the notice is received, has ended, or

(b) both—

(i) the Bank of England has informed the person who gave the notice that it does not intend to exercise a stabilisation power under Part 1 of the Banking Act 2009 in relation to the building society (and condition 5 has been met, if applicable), and

(ii) each of the PRA and the Bank of England has informed the person who gave the notice that it does not intend to apply for a building society insolvency order (under section 95 of the Banking Act 2009 as applied by section 90C).

(8) Condition 4 is that no application for a building society insolvency order is pending.

(8A) Condition 5—

(a) applies only if a resolution instrument has been made under section 12A of the Banking Act 2009 with respect to the building society in the three months ending with the date on which the Bank of England receives the notification under Condition 1, and

(b) is that the Bank of England has informed the person who gave the notice that it consents to the insolvency procedure to which the notice relates going ahead.

(9) Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a building society’s creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading) or Article 178 (wrongful trading) of the Insolvency (Northern Ireland) Order 1989 as applied in relation to building societies by section 90 of, and Schedule 15 to, this Act.

(10) Where the society is a PRA-authorised person and notice has been given under Condition 1 —

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) the PRA shall inform the person who gave the notice, within the period in Condition 3(a), whether it intends to apply for a building society insolvency order, ...

(c) if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a); and

(d) if Condition 5 applies, the Bank of England must, within the period in Condition 3(a), inform the person who gave the notice whether or not it consents to the insolvency procedure to which the notice relates going ahead.

(11) Where the society is not a PRA-authorised person and notice has been received under Condition 1

(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(b) if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a); and

(c) if Condition 5 applies, the Bank of England must, within the period in Condition 3(a), inform the person who gave the notice whether or not it consents to the insolvency procedure to which the notice relates going ahead.

(12) References in this section to the insolvency procedure to which the notice relates are to the procedure for the determination, resolution or appointment in question (see subsections (1) to (4)).

90E

(1) In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986.

(2) In the Disqualification Act—

(a) a reference to liquidation includes a reference to building society insolvency and a reference to building society special administration,

(b) a reference to winding up includes a reference to making or being subject to a building society insolvency order and a reference to making or being subject to a building society special administration order,

(c) a reference to becoming insolvent includes a reference to becoming subject to a building society insolvency order and a reference to becoming subject to a building society special administration order, and

(d) a reference to a liquidator includes a reference to a building society liquidator and a reference to a building society special administrator.

(3) For the purposes of the application of section 7A of the Disqualification Act (office-holder’s report on conduct of directors) to a building society which is subject to a building society insolvency order—

(a) the “office-holder” is the building society liquidator,

(b) the “insolvency date” means the date on which the building society insolvency order is made, and

(4) For the purposes of the application of that section to a building society which is subject to a building society special administration order—

(a) the “office-holder” is the building society special administrator,

(b) the “insolvency date” means the date on which the building society special administration order is made, and

(5) In the application of this section to Northern Ireland, references to the Disqualification Act are to the Company Directors Disqualification (Northern Ireland) Order 2002 and in subsections (3) and (4)—

(a) the reference to section 7A of the Disqualification Act is a reference to Article 10A of that Order (office-holder’s report on conduct of directors), and

(b) the reference to subsections (9) to (11) of that section is a reference to paragraphs (9) to (11) of that Article.

Signing of balance sheet: documents to be annexed.

Application of bank insolvency and administration legislation to building societies

Transfer of engagements.

Transfer regulations.

Consequences of false declaration.

Provisions supplementary to sections 102B and 102C.

Commencement.

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

115A

(1) For the purposes of this Act, a person is to be taken to have agreed with a building society to access a document, information or facility on a web site if—

(a) the person has been asked individually by the society to agree to access documents, information or facilities generally, or documents, information or facilities of the description in question, on a web site, and

(b) the society has not received a response within the period of 28 days beginning with the date on which the society's request was received.

This is subject to subsections (2) to (4).

(2) A person is not to be taken to have so agreed if the society's request—

(a) did not state clearly what the effect of a failure to respond would be, or

(b) was sent less than 12 months after a previous request made to the person for the purposes of this section in respect of the same or a similar description of document, information or facility.

(3) A person who is taken to have made an agreement by virtue of subsection (1) may revoke the agreement.

(4) Subsection (1) does not apply in relation to the following documents—

(a) a statement required to be sent to members by paragraph 1(1) of Schedule 16 (statements in connection with proposed mergers);

(b) a merger statement (within the meaning of Part 2 of that Schedule) required to be sent to members by paragraph 3 of that Schedule;

(c) a transfer statement or transfer summary (within the meaning of Part 1 of Schedule 17) required to be sent to members by paragraph 4(1) or (2) of that Schedule;

(d) a transfer proposal notification (within the meaning of Part 1A of Schedule 17) required to be sent to members by paragraph 5B(1) of that Schedule.

115B

(1) Where a person has received a document or information from a building society otherwise than in hard copy form, the person is entitled to require the society to send the person a version of the document or information in hard copy form.

(2) The society must send the document or information in hard copy form within 21 days of receipt of the request from the person.

(3) The society may not make a charge for providing the document or information in that form.

(4) Subsection (1) does not apply if the recipient of the document or information is the FCA or the PRA.

(5) A building society that fails to comply with this section is to be treated as having contravened rules made under section 137A of the Financial Services and Markets Act 2000.

(6) For the purposes of this section a person is treated as receiving a document or information from a building society if—

(a) the society is required by this Act to send the document or information to the person, and

(b) the requirement to send it is treated as satisfied.

(7) For the purposes of this section—

(a) a document or information is sent or supplied in hard copy form if it is sent or supplied in a paper copy or similar form capable of being read, and

(b) a document or information can be read only if it can be read with the naked eye, or (to the extent that it consists of images) it can be seen with the naked eye.

115C

(1) A document or information that is sent or supplied by a building society otherwise than in hard copy form or electronically or by means of a web site is validly sent or supplied if it is sent or supplied in a form or manner that has been agreed by the intended recipient.

(2) For the purposes of this section “hard copy form” is to be read in accordance with section 115B(7).

117A

(1) A building society may by notice given to the FCA specify a new year-end date.

(2) A notice given under subsection (1) has effect in relation to—

(a) the financial year in which the notice is given (“the current financial year”), and

(b) subsequent financial years.

(3) The notice must state whether the current financial year—

(a) is to be shortened, so as to come to an end on the first occasion on which the new year-end date falls or fell after the beginning of the current financial year, or

(b) is to be extended, so as to come to an end on the second occasion on which that date falls or fell after the beginning of the current financial year.

(4) A notice extending a building society's financial year is not effective if given less than 5 years after the end of an earlier financial year of the society that was extended under this section.

(5) A financial year of a building society may not be extended so as to exceed 18 months and a notice under subsection (1) is ineffective if the current financial year as extended in accordance with the notice would exceed that limit.

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

1A

(1) This paragraph applies for the purposes of paragraph (a) of the definition of “money purchase benefits” in paragraph 1(2).

(2) A benefit other than a pension in payment falls within this paragraph if its rate or amount is calculated solely by reference to assets which (because of the nature of the calculation) must necessarily suffice for the purposes of its provision to or in respect of the director.

(3) A benefit which is a pension in payment falls within this paragraph if—

(a) its provision to or in respect of the director is secured by an annuity contract or insurance policy made or taken out with an insurer, and

(b) at all times before coming into payment the pension was a benefit falling within this paragraph by virtue of sub-paragraph (2).

(4) For the purposes of sub-paragraph (2) it is immaterial if the calculation of the rate or amount of the benefit includes deductions for administrative expenses or commission.

(5) In this paragraph references to a pension do not include income withdrawal or dependants' income withdrawal (within the meaning of paragraphs 7 and 21 of Schedule 28 to the Finance Act 2004).

90B

(1) The Treasury may by order make provision for the purpose of ensuring that, on the winding up, or dissolution by consent, of a building society, any assets available for satisfying the society's liabilities to creditors or to shareholders are applied in satisfying those liabilities pari passu.

(2) Liabilities to creditors do not include—

(a) liabilities in respect of subordinated deposits;

(b) liabilities in respect of preferential debts;

(3) Liabilities to shareholders do not include liabilities in respect of deferred shares.

(4) A preferential debt is a debt which constitutes a preferential debt for the purposes of any of the enactments specified in paragraph 1 of Schedule 15 to this Act (or which would constitute such a debt if the society were being wound up).

(5) An order under this section may—

(a) make amendments of this Act;

(b) make different provision for different purposes;

(c) make such consequential, supplementary, transitional and saving provision as appears to the Treasury to be necessary or expedient.

(6) The power to make an order under this section is exercisable by statutory instrument but no such order may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

1A

In this Schedule—

“deposit” means rights of the kind described in—paragraph 22 of Schedule 2 to the Financial Services and Markets Act 2000 (deposits); orsection 1(2)(b) of the Dormant Bank and Building Society Accounts Act 2008 (balances transferred under that Act to authorised reclaim fund); and

“relevant deposit” means—an “eligible deposit” within the meaning given by paragraph 15C(1) of Schedule 6 to the Insolvency Act 1986 (categories of preferential debts) or a deposit of the kind mentioned in paragraph 15BB of that Schedule; oran “eligible deposit” within the meaning given by paragraph 21(1) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (categories of preferential debts) or a deposit of the kind mentioned in paragraph 20 of that Schedule.

6A

In the following provisions of the Act a reference to the creditors, general creditors or unsecured creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit—

(a) subsection (1) of section 143 (general functions of liquidator in winding up by the court);

(b) subsection (3) of section 149 (debts due from contributory to company);

(d) subsection (2)(b) of section 175 (preferential debts (general provision));

(e) subsection (1) of section 176ZA (payment of expenses of winding up (England and Wales)); ...

(f) subsections (3)(b) and (5)(a) of section 176A (share of assets for unsecured creditors);

(g) subsection (1)(e) of section 391O (direct sanctions orders);

(h) subsection (5) of section 391Q (direct sanctions order: conditions); and

(i) subsection (3)(e) of section 391R (direct sanctions direction instead of order).

23A

Section 143 (general functions of liquidator in winding up by the court) of the Act has effect as if after subsection (1) there were inserted—

(1A) Subject to the provisions of Part 4 relating to preferential payments, a building society’s property in the winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society. (1B) In subsection (1A) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.

34A

In the following provisions a reference to the creditors, general creditors or unsecured creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit—

(a) paragraph (1) of Article 121 (general functions of liquidator in winding up by the High Court);

(b) paragraph (3) of Article 127 (debts due from contributory to company);

(d) paragraph (2)(b) of Article 149 (preferential debts (general provision));

(e) paragraph (1) of Article 150ZA (payment of expenses of winding up); ...

(f) paragraphs (3)(b) and (5)(a) of Article 150A (share of assets for unsecured creditors);

(g) paragraph (1)(e) of Article 350O (direct sanctions orders);

(h) paragraph (5) of Article 350Q (direct sanctions order: conditions); and

(i) paragraph (3)(e) of Article 350R (direct sanctions direction instead of order).

50A

Article 121 (general functions of liquidator in winding up by the High Court) of the Order has effect as if after paragraph (1) there were inserted—

(1A) Subject to the provisions of Part V relating to preferential payments, a building society’s property in the winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society. (1B) In paragraph (1A) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.

The lending limit.

Discharge of mortgages.

The funding limit.

Raising funds and borrowing.

Rights of appeal.

Signature of auditors' report

Names to be stated in copies of auditor’s report filed or published

Acquisition or establishment of a business.

Provisions supplementary to sections 102B and 102C.

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

3A

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

3B

(1) This paragraph applies to the appointment of an auditor or auditors under section 77, where the building society has an audit committee.

(2) Before an appointment to which this paragraph applies is made—

(a) the audit committee of the building society must make a recommendation to the directors in connection with the appointment, and

(b) the directors must propose an auditor or auditors for appointment ...

(3) Before the audit committee makes a recommendation or the directors make a proposal under sub-paragraph (2), the committee... must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation.

(4) The audit committee must in its recommendation—

(a) identify its first and second choice candidates for appointment, drawn from those auditors who have participated in a selection procedure under sub-paragraph (3),

(b) give reasons for the choices so identified,

(i) the recommendation is free from influence by a third party, and

(ii) no contractual term of the kind mentioned in Article 16(6) of the Audit Regulation has been imposed on the building society.

(5) The directors must include in their proposal—

(a) the recommendation made by the audit committee in connection with the appointment, and

(b) if the proposal of the directors departs from the preference of the audit committee—

(i) a recommendation for a candidate or candidates for appointment drawn from those auditors who have participated in a selection procedure under sub-paragraph (3), and

(ii) the reasons for not following the audit committee’s recommendation.

(6) Where the audit committee recommends re-appointment of the society’s existing auditor or auditors, and the directors are in agreement, sub-paragraphs (3) and (4)(a) and (b) do not apply.

3C

(1) This paragraph applies to the appointment of an auditor or auditors under section 77, where the building society does not have an audit committee.

(2) Before an appointment to which this paragraph applies is made the directors must propose an auditor or auditors for appointment.

(3) Before the directors make a proposal under sub-paragraph (2), they must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation , from which their proposed auditor or auditors must be drawn .

(4) Sub-paragraph (3) does not apply in relation to a proposal to re-appoint the society’s existing auditor or auditors.

Tenure

5A

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

Application to court to remove auditor from office

5B

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

6ZA

(1) The competent authority may apply to the High Court for an order removing an auditor of a building society from office if the authority considers that there are proper grounds for removing the auditor from office.

(2) The members of a building society may apply to the High Court for an order removing an auditor of the building society from office if the applicant or applicants consider that there are proper grounds for removing the auditor from office.

(3) If the court is satisfied, on hearing an application under sub-paragraph (1), that there are proper grounds for removing the auditor from office, it may make an order removing the auditor from office.

(4) If the court is satisfied, on hearing an application under sub-paragraph (2), that—

(a) the applicants represent in total—

(i) not less than 5% of the voting rights of all the members having a right to vote at a general meeting of the building society, or

(ii) not less than 5% in nominal value of the amount standing to the credit of shares in a building society as shown by the latest balance sheet, and

(b) there are proper grounds for removing the auditor from office,

the court may make an order removing the auditor from office.

(5) For the purposes of this paragraph, divergence of opinions on accounting treatments or audit procedures are not to be taken to be proper grounds for removing an auditor from office.

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

27A

Sections 42 to 49 of the Act (administrative receivers) are omitted.

27B

Subsection (1) of section 51 of the Act (power to appoint receiver), as applied to a building society, has effect as if for the words “an incorporated company (whether a company registered under the Companies Act 2006 or not)” there were substituted “a building society”.

27C

Subsection (3) of section 59 of the Act (priority of debts), as applied to a building society, has effect as if the reference to ordinary creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

27D

Subsection (1) of section 67 of the Act (report by receiver), as applied to a building society, has effect as if—

(a) the reference to the Financial Conduct Authority included a reference to the scheme manager; and

(b) in paragraph (d) the reference to other creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

27E

Subsection (1) of section 70 of the Act (interpretation for Chapter 2), as applied to a building society, has effect as if—

(a) in the definition of “company” for the words “an incorporated company (whether or not a company registered under the Companies Act 2006)” there were substituted “a building society”; and

(b) the definition of “the register” were omitted.

27F

Chapter 4 of Part 3 of the Act (prohibition of appointment of administrative receiver), as applied to a building society, has effect as if—

(a) in section 72A (floating charge holder not to appoint administrative receiver)—

(i) in subsections (1) and (2) the word “qualifying” and in subsection (3) the definition of “holder of a qualifying floating charge in respect of a company’s property” were omitted; and

(ii) subsections (4)(a), (5) and (6) were omitted; and

(b) sections 72B to 72H (exceptions to prohibition) were omitted.

50

Articles 52 to 59 of the Order (administrative receivers) are omitted.

51

Article 59A of the Order (floating charge holder not to appoint administrative receiver), as applied to a building society, has effect as if—

(a) in paragraph (1) the word “qualifying” were omitted; and

(b) paragraphs (2), (3)(a), (4) and (5) were omitted.

52

Articles 59B to 59J of the Order (exceptions to prohibition) are omitted.

Insolvency practitioners: their qualification and regulation

33A

Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—

(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.

33B

(1) In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies has effect without the modification in paragraph 3(1)(a) above—

(a) sections 390A and 390B(1) and (3) (authorisation of insolvency practitioners); and

(b) sections 391O(1)(b) and 391R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2) In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 3(1)(a) above.

Insolvency practitioners: their qualification and regulation

55F

Article 349 (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—

(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.

55G

(1) In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies has effect without the modification in paragraph 3(1)(a) above—

(a) Articles 349A and 349B(1) and (3) (authorisation of insolvency practitioners); and

(b) Articles 350O(1)(b) and 350R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2) In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) the reference to a company has effect without the modification in paragraph 3(1)(a) above.

Insolvency practitioners: their qualification and regulation

27G

Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—

(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.

27H

(1) In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 2(1)(a) above—

(a) sections 390A and 390B(1) and (3) (authorisation of insolvency practitioners); and

(b) sections 391O(1)(b) and 391R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2) In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 2(1)(a) above.

27I

In sections 391O, 391Q and 391R of the Act a reference to the creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit.

Insolvency practitioners: their qualification and regulation

53

Article 349 of the Order (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—

(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.

54

(1) In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 2(1)(a) above—

(a) Articles 349A and 349B(1) and (3) (authorisation of insolvency practitioners); and

(b) Articles 350O(1)(b) and 350R(3)(b) (court sanction of insolvency practitioners in public interest cases).

(2) In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) of the Order the reference to a company has effect without the modification in paragraph 2(1)(a) above.

55

In Articles 350O, 350Q and 350R of the Order a reference to the creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit.

Acquisition or establishment of a business.

Protection of interests of beneficiaries in the case of trustee account holders.

Provisions supplementary to sections 102B and 102C.

Cancellation of registration.

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Building Societies Act 1986

Supplementary provisions regarding directors' remuneration

6

7

8

Interpretation of provisions regarding directors remuneration

9

Directors' loans and transactions

10

Disclosure of auditors' remuneration

11

Persons who are to be regarded as associates of a society’s auditors

12

PART 2 — Information about employees

13

SCHEDULE 10B

PART 1 — Societies not required to prepare consolidated group accounts

Subsidiary undertakings

1

Holdings in subsidiary undertakings

2

Financial information about subsidiary undertakings

3

Financial years of subsidiary undertakings

4

Significant holdings in undertakings other than subsidiary undertakings

5

6

7

Construction of references to shares held by society

8

PART 2 — Societies required to prepare consolidated group accounts

Subsidiary undertakings

9

Holdings in subsidiary undertakings

10

Financial information about subsidiary undertakings not included in the consolidation

11

Associated undertakings

12

Other significant holdings of society or group

13

14

15

16

17

18

Construction of references to shares held by society or group

19

Interpretation: general

20

119A

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

Class 1 and class 2 advances

Security for advances: valuation and supplementary and related provisions.

Special provisions as regards investors.

Power to make prohibition orders.

Powers to petition for winding up etc.

The determination: notification, effect, appeal.

Variation and revocation of transfer directions

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

Rights of appeal.

Directors, etc, not to accept commissions in connection with loans.

Consistency of accounts

Auditor’s duties and powers .

Power to alter priorities on dissolution and winding up

Application of bank insolvency and administration legislation to building societies

Acquisition or establishment of a business.

Mergers; provisions supplementing ss. 93 and 94.

Protective provisions for specially formed successors.

Mergers; provisions supplementing ss. 93 and 94.

Consequences of false declaration.

Provisions supplementary to sections 102B and 102C.

Public file of the society.

Public file of the society.

72L

72M

78B

78C

78D