Building Societies Act 1986

• (5) Subject to compliance with the requirements of subsection (6) below, subsection (1) above does not preclude a building society from doing anything to provide a director with funds to meet expenditure incurred or to be incurred by him for the purposes of the society or for the purpose of enabling him properly to perform his duties as a director of the society nor does it preclude the society from doing anything to enable a director to avoid incurring such expenditure.

• (6) The following are the requirements referred to in subsection (5) above—

• (a) the things must either be done with the prior approval of the society given at a general meeting at which the requisite matters are disclosed or be done on condition that, if the approval of the society is not so given at the next annual general meeting, the loan is to be repaid, or any other liability arising under the transaction is to be discharged , within six months from the conclusion of that meeting; and

• (b) the amount provided, when aggregated with any other relevant provision of funds, does not exceed £40,000.

• (7) The following are the requisite matters which must be disclosed for the purposes of subsection (6) above—

• (a) the purpose of the expenditure incurred or to be incurred, or which would otherwise be incurred, by the director;

• (b) the amount of the funds to be provided by the society; and

• (c) the extent of the society’s liability under any transaction which is or is connected with the thing in question.

• (8) The Treasury may by order made by statutory instrument substitute for any sum specified in this section a larger sum specified in the order.

• (9) An order under subsection (8) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (10) In this section—

• “authorising provision” and “authorised”, in relation to a transaction of a description falling within paragraph (a), (b) or (c) of subsection (1) above, mean respectively any provision of subsection (2), (3) or (4) or constituted by subsection (5) above and any transaction or thing done to which that paragraph does not apply or which is not precluded from being done by virtue of that provision;

• “outstanding”, in relation to loans, means outstanding in respect of principal and interest and, in relation to the provision of funds subject to a condition for repayment or discharge of any other liability, means unpaid or undischarged to any extent;

• “provision of funds” includes anything else which, by virtue of subsection (5) above, a society is not precluded from doing by subsection (1) above; and

• “relevant”, in relation to a transaction of a description falling within paragraph (a), (b) or (c) of subsection (1) above, means an outstanding or, in the case of a lease or hiring, current transaction of that description (whether entered into by, or by arrangement with, the society) not being one authorised by any other authorising provision.

• “subsidiary” has the meaning given by section 1159 of the Companies Act 2006.

• (11) Section 70 has effect for the interpretation, in the subsequent provisions of this Part, of references to transactions or arrangements contravening this section and to such transactions or arrangements being made “for” a person.

Sanctions for breach of s. 65

66

• (1) If a building society enters into a transaction or arrangement contravening section 65, the transaction or arrangement is voidable at the instance of the society unless—

• (a) restitution of any money or any other assets which is the subject matter of the arrangement or transaction is no longer possible, or the society has been indemnified in pursuance of subsection (2)(b) below for the loss or damage suffered by it, or

• (b) any rights acquired in good faith, for value and without actual notice of the contravention by a person other than the person for whom the transaction or arrangement was made would be affected by its avoidance.

• (2) Where a transaction or arrangement contravening section 65 is made by a building society for a director of the society or a person connected with a director of the society then, without prejudice to any other liability but subject to subsections (3) and (4) below, that director and the person so connected and any other director of the society who authorised the transaction or arrangement (whether or not is has been avoided in pursuance of subsection (1) above) is liable—

• (a) to account to the society for any gain which he has made directly or indirectly by the transaction or arrangement; and

• (b) (jointly and severally with any other person liable under this subsection) to indemnify the society for any loss or damage resulting from the transaction or arrangement.

• (3) Where a transaction or arrangement contravening section 65 is entered into by a building society and a person connected with a director of the society, that director is not liable under subsection (2) above if he shows that he took all reasonable steps to secure the society’s compliance with that section.

• (4) In any case, a person so connected and any such other director as is mentioned in subsection (2) above is not so liable if he shows that, at the time the transaction or arrangement was entered into, he did not know the circumstances constituting the contravention.

• (5) A director of a building society who authorises or permits the society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 65 is guilty of an offence.

• (6) A building society which enters into a transaction or arrangement contravening section 65 for one of its directors is guilty of an offence unless it shows that, at the time the transaction or arrangement was entered into, it did not know the circumstances constituting the contravention.

• (7) A person who procures a building society to enter into a transaction or arrangement knowing or having reasonable cause to believe that the society was thereby contravening section 65 is guilty of an offence.

• (8) A person other than a building society who commits an offence under this section shall be liable—

• (a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; or

• (b) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or both.

• (9) A building society which commits an offence under this section shall be liable on conviction on indictment or on summary conviction to a fine which, on summary conviction, shall not exceed the statutory maximum.

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

67

• (1) This section applies to any person who holds office in or is employed by a building society as director, secretary, chief excecutive, manager, solicitor, surveyor or valuer or in connection with the assessment of the adequacy of securities for loans secured on land.

• (2) No person to whom this section applies shall (in addition to the remuneration prescribed or authorised by the rules or any resolution of the society) accept from any other person any commission for or in connection with any loan made by the society.

• (3) If a person to whom this section applies accepts a commission in contravention of subsection (2) ab ove—

• (a) both he and, subject to subsection (4) below, the person who paid it shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and

• (b) if, having been convicted of an offence under paragraph (a) above, the person accepting the commission fails to pay over to the society the amount or value of the commission, as and when directed to do so by the court which convicted him, he shall be guilty of an offence under this paragraph and liable on summary conviction to imprisonment for a term not exceeding six months.

• (4) No offence under paragraph (a) of subsection (3) above is committed by the person who paid the commission unless he did so knowing the circumstances that constituted the offence under that paragraph on the part of the person who accepted it from him.

• (5) Where—

• (a) a charge upon a policy of life assurance is given as additional security for a loan made by a building society, or

• (b) a building society makes an additional loan to enable payment to be made of a premium on a policy of insurance, or

• (c) any policy of insurance is taken out so as to comply with the terms on which a loan is made by a building society, whether by way of insuring the property given as security for the loan or otherwise,

and the policy is effected through the building society, or the society nominates or selects a person by whom the policy is to be issued, it shall be unlawful for any person to whom this section applies, in connection with the effecting of the policy, to receive any commission from a person by or through whom the policy is issued.

• (6) A person who pays, and a person who accepts, any commission which subsection (5) above makes it unlawful to receive shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

• (7) In this section—

• “charge upon a policy of life assurance”, in relation to a loan secured on land in Scotland, means an assignation in security in respect of such a policy;

• “commission” includes any gift, bonus or benefit;

• “solicitor”, in relation to England and Wales, includes any person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes a reserved instrument activity (within the meaning of that Act).

Records of loans, etc. for directors falling within s. 65

68

• (1) A building society shall maintain a register containing a copy of every subsisting transaction or arrangement (other than an excepted transaction or arrangement) falling within section 65(1) made for a director or a person connected with a director of the society during the current financial year or any of the preceding ten financial years.

• (2) In the case of a transaction or arrangement which is not in writing, there shall be kept in the register a written memorandum setting out its terms.

• (3) A building society shall make available for inspection by members—

• (a) at its principal office during the period of 15 days expiring with the date of its annual general meeting, and

• (b) at the annual general meeting,

a statement containing the requisite particulars of the transactions and arrangements falling within section 65(1) which were included in the register under subsection (1) above at any time during the last complete financial year preceding the meeting.

• (4) The requisite particulars are those specified in Schedule 9 to this Act.

• (5) The society must send two copies of the statement required to be made available under subsection (3) to the FCA and, if the society is a PRA-authorised person, one copy to the PRA, on the date on which the statement is required to be first made available to members.

• (5A) The FCA must keep a copy of the statement in the public file of the society.

• (6) A copy of the statement required to be so made available shall also be sent, on demand and on payment of such fee (not exceeding £5) as the society may from time to time determine, to any member of the society.

• (6A) Where a copy of a statement is required to be sent to a member under subsection (6)—

• (a) it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

• (b) the requirement to send it shall also be treated as satisfied if the conditions set out in subsection (6B) are satisfied.

• (6B) The conditions of this subsection are satisfied in the case of a copy of a statement if—

• (a) the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

• (b) the agreement applies to the statement in question;

• (c) the member is notified ... of—

• (i) the publication of the statement on a web site,

• (ii) the address of that web site, and

• (iii) the place on that web site where the statement may be accessed, and how it may be accessed; and

• (d) a copy of the statement continues to be published on that web site throughout the period of 21 days beginning with the day on which the society notifies the member in accordance with paragraph (c).

• (7) There are excepted from the obligations imposed by this section on a building society with respect to a financial year all transactions or arrangements made or subsisting during that year for a person who was at any time during that year a director of the society or was connected with a director of the society if the aggregate of the values of each transaction or arrangement made for that person, less the amount (if any) by which the value of those transactions or arrangements has been reduced, did not exceed £2,000 at any time during that year

• (8) There are also excepted from the obligations imposed by this section on a building society with respect to a financial year all transactions or arrangements falling within paragraphs (b), (d) or (e) of section 65(1) made during that year for a person who was at any time during that year a director of the society or was connected with a director of the society if the aggregate of the values of each such transaction or arrangement so made for that director or any person connected with him, less the amount (if any) by which the value of those transactions or arrangements has been reduced, did not exceed £10,000 at any time during that year.

• (9) The Treasury may by order amend subsection (7) or (8) above so as to substitute for the amount for the time being specified in that subsection such other amount as they think appropriate.

• (10) The power to make an order under subsection (9) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (11) If a building society fails to comply with any provision of this section (or Schedule 9) the society shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum, and so shall any officer who is also guilty of the offence.

• (11A) Where, in a case in which subsection (6A)(b) is relied on for compliance with a requirement of subsection (6)—

• (a) a statement is published for a part, but not all, of the period mentioned in subsection (6B)(d), but

• (b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under subsection (11) by reason of that failure.

Disclosure and record of related businesses

Disclosure and record of income of related businesses

69

• (1) Where, at any time during a financial year of a building society, a person both is a director or other officer of a building society and is, or is a director of or partner in, a business associate of the society, this section shall apply, as respects that year, to that person in relation to the business of the business associate.

• (2) A person is a “business associate” of a building society in any financial year of the society if that person—

• (a) carries on a business which consists of or includes the provision of relevant services,

• (b) provides relevant services during that year to, or to other persons in connection with loans secured on land made by, the society and

• (c) is not a connected undertaking of the society;

and “associated” has a corresponding meaning.

• (3) The following are relevant services—

• (a) conveyancing services provided by a solicitor;

• (b) surveying and valuing land or other property;

• (c) accountancy services;

• (d) arranging for the provision of insurance against loss of or damage to property or on human life;

• (e) any other services designated as relevant services.

• (4) Where a business associate of a building society provides the society with services which are relevant services by virtue of subsection (3) above, any administrative services provided to the society by the business associate are also relevant services.

• (5) The Treasury may by order in a statutory instrument—

• (a) designate as relevant services services of any description specified in the order which are normally provided to building societies; and

• (b) make such incidental, supplementary or transitional provision as they consider necessary or expedient;

and in subsection (3)(e) above “designated” means designated by an order under this subsection.

• (6) Where this section applies, as respects a financial year of a building society, to a person as a director or other officer of the society in relation to the business of a business associate, that person shall furnish the society with the requisite particulars of that business.

• (7) The requisite particulars of the business of a business associate of a building society are—

• (a) except where an election under paragraph (b) below is in force, those specified in Part I of Schedule 10 to this Act;

• (b) if a building society elects to adopt Part II of that Schedule for its directors and other officers as respects a financial year, those specified in Part II of that Schedule; and

• (c) as regards relevant services designated by an order under subsection (5) above, such particulars as are specified in the order;

and Part III of the Schedule has effect to supplement Parts I and II and includes a definition of “the volume of the business” for the purposes of this section.

• (8) An election by a building society to adopt Part II of Schedule 10 as regards the requisite particulars to be furnished by its directors and other officers must be made in writing to the FCA before the beginning of the financial year as respects which it is made and the requisite particulars must be furnished in writing within the period of six weeks beginning with the end of the financial year for which they are required.

• (9) For the purpose of enabling him to furnish the requisite particulars of the business of a business associate of a building society the person who is under the obligation to furnish them to the society may require any person who is a member of or partner in, or holds any office or employment with, the business associate to furnish him with such information relating to its business as he may reasonably require for that purpose.

• (10) Any person who, without reasonable excuse—

• (a) fails to furnish the particulars required by subsection (6) above or furnishes particulars which are false or misleading in a material particular or, in the case of particulars under Part II to Schedule 10, are not a justified estimate, or

• (b) fails to furnish any information lawfully required of him under subsection (9) above or furnishes information which is false or misleading in a material particular,

shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum.

• (11) Subject to subsection (12) below, a building society shall maintain at its principal office a register containing the particulars furnished to it under subsection (6) above as respects the last financial year and each of the ten financial years preceding that year.

• (12) No particulars of the business of a business associate of a building society need be kept in the register provided for by subsection (11) above as respects any financial year of the society in which the volume of the business of which the requisite particulars are required did not exceed £10,000 or such other sum as may be substituted for it by order of the Treasury in a statutory instrument under this subsection.

• (13) A building society shall make available for inspection by members—

• (a) at its principal office during the period of 15 days expiring with the date of its annual general meeting, and

• (b) at the annual general meeting,

a statement containing the particulars required to be kept in the register under subsection (11) above as respects the last financial year.

• (14) The society must send two copies of the statement required to be made available under subsection (13) to the FCA and, if the society is a PRA-authorised person, one copy to the PRA, on the date on which the statement is required to be first made available to members.

• (14A) The FCA must keep a copy of the statement in the public file of the society.

• (15) A copy of the statement required to be so made available shall also be sent, on demand and on payment of such fee (not exceeding £5) as the society may from time to time determine, to any member of the society.

• (15A) Where a copy of a statement is required to be sent to a member under subsection (15)—

• (a) it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

• (b) the requirement to send it shall also be treated as satisfied if the conditions set out in subsection (15B) are satisfied.

• (15B) The conditions of this subsection are satisfied in the case of a statement if–

• (a) the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

• (b) the agreement applies to the statement in question;

• (c) the member is notified ... of—

• (i) the publication of the statement on a web site,

• (ii) the address of that web site, and

• (iii) the place on that web site where the statement may be accessed, and how it may be accessed; and

• (d) a copy of the statement continues to be published on that web site throughout the period of 21 days beginning with the day on which the society notifies the member in accordance with paragraph (c).

• (16) . . . any statutory instrument containing an order made under subsection (5) or (12) above shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (17) In this section—

• “administrative services” means services necessary or incidental to the conduct of the society’s business;

• “conveyancing services” in relation to— land in England and Wales means the preparation of transfers, conveyances, contracts and other documents in connection with, and other services ancillary to, the disposition or acquisition of estates or interests in land; and for the purposes of this paragraph— “disposition”—does not include a testamentary disposition or any disposition in the case of such a lease as is referred to in section 54(2) of the Law of Property Act 1925 (short leases); butsubject to that, includes in the case of leases both their grant and their assignment; and“acquisition” has a corresponding meaning,land in Northern Ireland has the same meaning as in paragraph (a) above with the modification that “disposition” does not include any disposition in the case of such a lease as is excepted, by section 4 of the Landlord and Tenant Law Amendment Act (Ireland) 1860, from the requirements of that section, andheritable property in Scotland, includes drafting all writs relating to such property and negotiating and concluding missives for its purchase, sale, transfer, lease and sublease; and

• “solicitor”, in relation to England and Wales, includes any person who, for the purposes of the Legal Services Act 2007, is an authorised person in relation to an activity which constitutes a reserved instrument activity (within the meaning of that Act).

Interpretation

Interpretation of this Part

70

• (1) The following provisions apply for the interpretation of this Part.

• (2) A person is “connected with” a director of a building society if, but only if, he (not being himself a director of it) is—

• (a) that director’s spouse or civil partner, child or step-child; or

• (b) a body corporate with which the director is associated; or

• (c) a person acting in his capacity as trustee of any trust the beneficiaries of which include—

• (i) the director, his spouse or civil partner or any children or step-children of his, or

• (ii) a body corporate with which he is associated, or of a trust whose terms confer a power on the trustees that may be exercised for the benefit of the director, his spouse or civil partner, or any children or step-children of his or any such body corporate; or

• (d) a person acting in his capacity as partner of that director or of any person who, by virtue of paragraph (a), (b) or (c) of this subsection, is connected with that director;

• (e) a Scottish firm in which—

• (i) that director is a partner,

• (ii) a partner is a person who, by virtue of paragraph (a), (b) or (c) above, is connected with that director, or

• (iii) a partner is a Scottish firm in which that director is a partner or in which there is a partner who, by virtue of paragraph (a), (b) or (c) above, is connected with that director.

• (3) In subsection (2)—

• (a) a reference to a child or step-child of any person includes an illegitimate child of his but does not include any person who has attained the age of 18, and

• (b) paragraph (c) does not apply to a person acting in his capacity as trustee under an employees’ share scheme or a pension scheme.

• (4) A director is “associated” with a body corporate if he, his spouse or civil partner, his child or step-child or a person acting in his capacity as trustee of any trust the beneficiaries of which include the director, his spouse or civil partner, child or step-child between them, either—

• (a) own at least one-fifth of that body’s equity share capital (within the meaning of the Companies Acts (see section 548 of the Companies Act 2006)), or

• (b) are entitled to exercise or control the exercise of more than one-fifth of the voting power of"that body at any general meeting.

• (5) As regards transactions or arrangements falling within section 65, a “transaction contravening section 65” means a transaction to which subsection (1)(a), (b), (c) or (d) of that section applies and an “arrangement contravening section 65” means an arrangement to which subsection (1)(e) of that section applies and such a transaction or arrangement is made “for” a person if—

• (a) in the case of a loan, disposal or payment within paragraph (a), (b) or (c), it is made, in the case of paragraph (a) or (b), to him or, in the case of paragraph (c) on his behalf;

• (b) in the case of a guarantee or security within paragraph (d), it is made as an incident of or in connection with a loan or disposal to him or a payment on his behalf; and

• (c) in the case of an arrangement within paragraph (e), the transaction to which the arrangement relates was made for him.

Part VIII — Accounts and Audit

Accounting records . . .

Accounting records and systems of business control, etc.

71

• (1) Every building society shall—

• (a) cause accounting records to be kept, ...

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

in accordance with this section.

• (2) The accounting records of a society must be such as to—

• (a) explain its transactions;

• (b) disclose, with reasonable accuracy and promptness, the state of the business of the society at any time;

• (c) enable the directors properly to discharge the duties imposed on them by or under this Act (and, where applicable section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework)) and their functions of direction of the affairs of the society; and

• (d) enable the society properly to discharge the duties imposed on it by or under this Act (and, where applicable section 403(1) of the Companies Act 2006 (group accounts: applicable accounting framework));

and must be kept in an orderly manner.

• (3) The accounting records shall in particular contain—

• (a) entries from day to day of all sums received and paid by the society and the matters in respect of which they are received or paid;

• (b) entries from day to day of every transaction entered into by the society which will or there is reasonable ground for expecting may give rise to liabilities or assets of the society other than insignificant assets or liabilities in respect of the management of the society; and

• (c) a record of the assets and liabilities of the society and in particular of assets and liabilities of any class specifically regulated by or under section 6 or 7.

• (4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (8) The accounting records shall be kept at the society’s principal office or at such other place or places as the directors think fit, and shall at all times be open to inspection by the directors.

• (9) Accounting records shall be preserved for six years from the date on which they were made.

• (10) Where a building society has connected undertakings, the society shall also secure that such accounting records are kept . . . by the society and the connected undertakings as will enable the society to comply with the requirements of this section in relation to the business of the society and those connected undertakings.

• (10A) The Commission may, for the purpose of implementing the Council Directive on the supervision of credit institutions on a consolidated basis (No.92/30/EEC), direct that subsection (10) above shall have effect in relation to any building society specified in the direction as if any associated body of the society so specified were linked to it by resolution.

• (11) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Accounts

Duty of directors to prepare annual accounts

72

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Contents and form of annual accounts

73

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Duty of directors to prepare annual business statement

74

• (1) The directors of every building society shall, by reference to the annual accounts and other records and information at their disposal, prepare with respect to each financial year of the society a statement (referred to in this Act as “the annual business statement”) relating to prescribed aspects of the business of the society during the year.

• (2) Where the society has connected undertakings the annual business statement shall deal also with prescribed aspects of the business of the connected undertakings during the year to which it relates.

• (3) The annual business statement shall contain such information relating to such aspects of the business of the society and shall be in such form as the Treasury prescribe by regulations; and in this section “prescribed” means prescribed by regulations under this subsection.

• (4) Without prejudice to the generality of subsections (1) to (3) above the regulations may require the annual business statements of building societies to include prescribed information about directors and past directors and persons connected with them ... and their financial interests.

• (5) The information comprising the annual business statement shall give a true representation of the matters in respect of which it is given.

• (6) To such extent as may be prescribed matters contained in the society’s annual business statement shall not be the subject of report by the auditor under section 78.

• (7) The power to make regulations under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (8) It is the duty of every director ... of a building society to give notice to the society of such matters relating to himself or his financial interests as may be necessary for the purposes of compliance with the preceding provisions of this section.

• (9) Any person who fails to comply with subsection (8) above shall be liable on summary conviction to a fine not exceeding level 5 on the standard scale.

• (10) Any director who fails to comply with subsection (1) above shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum.

Directors' report

75

• (1) The directors of a building society shall prepare for submission to the annual general meeting a report on the business of the society containing—

• (a) a fair review of the business of the society and its connected undertakings (if any), complying with section 75A,

• (aa) a description of the principal risks and uncertainties facing the society and its connected undertakings (if any),

• (b) such information relating to such aspects of the business of the society or the society and any connected undertakings as may be prescribed by regulations made by the . . . Treasury, and

• (c) a statement as to the matters mentioned in subsection (1A) below.

• (1A) The said matters are—

• (a) whether the society has acquired or established, or allowed a subsidiary undertaking to acquire or establish, a business to which subsection (3) and subsection (4) or, as the case may be, subsection (5) of section 92A applied;

• (b) if the society has acquired or established, or allowed such an undertaking to acquire or establish, such a business, what the business is and whether the society complied with the requirements of subsection (1) of that section; and

• (c) if the society did not comply with those requirements, why the society nevertheless proceeded, or allowed the undertaking to proceed, with the acquisition or establishment.

• (1B) If the building society has subsidiary undertakings, the report may, where appropriate, give greater emphasis to those matters which are significant to the society and its subsidiary undertakings taken as a whole.

• (2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (3) The power to make regulations under subsection (1) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (4) If a directors’ report does not contain the review, information and statement required by subsection (1) above and, where applicable, the review required by subsection (2) above, each director shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum.

Summary financial statement for members and depositors

76

• (1) The directors of a building society shall, with respect to each financial year, prepare for members and depositors a summary financial statement for that year, that is to say, a statement derived from the annual accounts, annual business statement and director’s report, giving a summary account of the society’s financial development during and financial position at the end of the year.

• (2) Where the society has connected undertakings the statement shall (so far as they are dealt with in the group accounts) give an account of the financial development and position of the society and its connected undertakings.

• (3) The Treasury may by regulations make provision with respect to—

• (a) the form of the summary financial statement, and

• (b) the information which must be included in it.

• (4) Every summary financial statement shall also include in the prescribed form statements to the effect that—

• (a) it is only a summary of information in the accounts, business statement and directors’ report;

• (b) in so far as it summarises the information in the accounts, those accounts have been audited;

• (c) the accounts, business statement and director’s report will be available to members and depositors free of charge on demand at every office of the society after a specified date.

• (5) Every summary financial statement shall include a statement of the auditor’s opinion as to its consistency with the accounts, business statement and directors’ report and its conformity with the requirements of this section and regulations made under it.

• (6) The power to make regulations under subsection (3) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

• (7) The summary financial statement shall be signed by two directors on behalf of the board of directors and by the chief executive of the society.

• (8) Not later than 21 days before the date of the annual general meeting at which the accounts and reports are to be considered, the society shall send one copy of the documents to which this subsection applies to every member of the society who is entitled to receive notice of the meeting, and two copies of the documents to which this subsection applies to the FCA and, if the society is a PRA-authorised person, one copy to the PRA .

• (8A) The documents to which subsection (8) applies are—

• (a) the summary financial statement, and

• (b) where subsection (8) extends under section 78(6) to the auditor’s report also, the auditor’s report.

• (8AA) The society shall also—

• (a) publish the summary financial statement and (where applicable) the auditor's report on a web site, and

• (b) ensure that the statement and (where applicable) the report may be accessed on the web site until the publication of the next summary financial statement.

• (8B) Where a copy of the summary financial statement or of the auditor’s report is required to be sent to a member under subsection (8)—

• (a) it may be sent to him electronically only if it is sent to an electronic address notified to the society by the member for the purpose; but

• (b) the requirement to send it shall also be treated as satisfied if the conditions set out in subsection (8C) are satisfied.

• (8C) The conditions of this subsection are satisfied in the case of a copy of a summary financial statement or auditor’s report if—

• (a) the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

• (b) the agreement applies to the summary financial statement or auditor’s report in question;

• (c) the member is notified ... of—

• (i) the publication of the summary financial statement and (where applicable) the auditor’s report on a web site,

• (ii) the address of that web site, and

• (iii) the place on that web site where the statement and (where applicable) the report may be accessed, and how it may be accessed;

• (d) the notification given for the purposes of paragraph (c) is given not less than 21 days before the date of the annual general meeting at which the accounts and reports are to be considered; and

• (e) a copy of the statement and (where applicable) the report is published on the web site throughout a period beginning at least 21 days before the date of meeting.

• (8D) Where, in a case in which subsection (8C) is relied on for compliance with a requirement of subsection (8)—

• (a) a copy of a summary financial statement or auditor’s report is published for a part, but not all, of the period mentioned in subsection (8C)(e), and

• (b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society or the officer to prevent or avoid,

the failure shall not invalidate the proceedings of the meeting at which the accounts and reports are considered, and no offence is committed under subsection (10) by reason of that failure.

• (8E) If, at any time during the period beginning with the publication of the summary financial statement and ending with the publication of the next summary financial statement, an individual for the first time subscribes for shares in the society, the society shall at that time notify the individual of the information in subsection (8C)(c)(i) to (iii).

• (8F) In a case where subsection (8E) applies, the society is not required under section 115B (right to hard copy version) to send the individual a version of the summary financial statement or (where applicable) the auditor's report in hard copy form (within the meaning of that section).

• (9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9D) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (9E) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (10) If default is made by a building society in complying with subsection (8) above, the society shall be liable on summary conviction—

• (a) to a fine not exceeding level 5 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

• (11) If default is made by a building society in complying with subsection (8AA) or (8E) above, the society shall be liable on summary conviction—

• (a) to a fine not exceeding level 3 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

• (12) The FCA shall keep one of the copies of the summary financial statement received by it under subsection (8) above in the public file of the society.

Auditors and audit of accounts

Auditors: appointment, tenure, qualifications, etc.

77

• (1) Every building society shall at each annual general meeting appoint an auditor or auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general meeting.

• (2) Schedule 11 to this Act has effect as regards the appointment, resignation and removal of auditors.

• (3) Appointment as auditor of a building society is an appointment as a statutory auditor to which the provisions of Part 42 of the Companies Act 2006 apply.

Auditors' report

78

• (1) The auditor of a building society shall make a written report to the members on the annual accounts which are to be laid before the society at the annual general meeting during his tenure of office.

• (2) The auditor’s report shall . . . be open to inspection by any member at the annual general meeting of the building society.

• (3) The auditor shall, in his report under subsection (1) above, also make a report to the members on—

• (a) the annual business statement, and

• (b) the directors’ report,

in so far as subsection (7) below requires him to do so.

• (3A) The auditor's report must include—

• (a) the identity of the building society whose annual accounts are the subject of the audit,

• (b) a description of the annual accounts that are the subject of the audit (including the period covered by those accounts),

• (c) a description of the financial reporting framework that has been applied in the preparation of those accounts, and

• (d) a description of the scope of the audit identifying the auditing standards in accordance with which the audit was conducted.

• (4) The report must clearly state the opinion of the auditor as to whether the accounts—

• (a) give a true and fair view—

• (i) in the case of an individual balance sheet, of the state of affairs of the society as at the end of the financial year,

• (ii) in the case of an individual income and expenditure account, of the income and expenditure of the society for the financial year, and

• (iii) in the case of group accounts, of the state of affairs as at the end of the financial year and the income and expenditure for the financial year of the society and the subsidiary undertakings dealt with in the group accounts, so far as concerns members of the society,

• (b) have been properly prepared in accordance with the relevant financial reporting framework, and

• (c) have been prepared in accordance with the requirements of this Act (and, where applicable, section 403(1) of the Companies Act 2006).

• (4A) The auditor's report must—

• (a) be either unqualified or qualified,

• (b) include a reference to any matters to which the auditor wishes to draw attention by way of emphasis without qualifying the report,

• (c) include a statement on any material uncertainty relating to events or conditions that may cast significant doubt about the building society's ability to continue to adopt the going concern basis of accounting, and

• (d) identify the auditor's place of establishment.

• (6) If the auditor’s report includes a qualification of his opinion that the annual accounts give a true and fair view of the matters specified in subsection (4)(a) above, subsection (8) of section 76 extends also to the auditor’s report.

• (7) The auditor's report, in so far as it deals with the documents specified in subsection (3) above, must—

• (a) state whether, in his opinion, based on the work undertaken in the course of the audit—

• (i) the documents have been prepared so as to conform to the requirements of, or made under, sections 74 and 75 respectively,

• (ii) the information given in the annual business statement gives a true representation of the matters in respect of which it is given, and

• (iii) the information given in the directors' report for the financial year for which the accounts are prepared is consistent with those accounts,

• (b) state whether, in the light of the knowledge and understanding of the building society and its environment obtained in the course of the audit, the auditor has identified material misstatements in the directors' report, and

• (c) if applicable, give an indication of the nature of each of the misstatements referred to in paragraph (b).

• (8) The auditor’s report on the annual business statement shall not deal with any matters which, by virtue of section 74(6), are not to be the subject of report under this section.

• (9) The auditor of a building society shall, as regards the statement of particulars of transactions falling within section 65 which the society is to make available for "inspection by members under section 68(3), examine the statement before it is made available to members and make a report to the members on it; and the report shall be annexed to the statement before it is so made available.

• (10) The auditor’s report under subsection (9) above shall state whether in his opinion the statement contains the particulars required by section 68; and where his opinion is that it does not, he shall include in his report, so far as he is reasonably able to do so, a statement giving the requisite particulars.

• (11) Where more than one person is appointed as an auditor—

• (a) all the persons appointed must jointly make a report under this section and the report must include a statement as to whether all the persons appointed agree—

• (i) on the matters contained in the report, and

• (ii) on the statements and indications given under subsection (7); and

• (b) if all the persons appointed cannot agree on—

• (i) the matters contained in the report, or

• (ii) on the statements and indications given under subsection (7),

the report must include the opinions of each person appointed and give reasons for the disagreement.

Auditors' duties and powers

79

• (1) It is the duty of the auditor of a building society in preparing his report to the members under section 78, to carry out such investigations as will enable him to form an opinion as to the following matters—

• (a) whether adequate accounting records have been kept under section 71,

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) whether the annual accounts are in agreement with the accounting records.

• (2) If the auditor is of the opinion that—

• (a) adequate accounting records have not been kept under section 71, or

• (b) the annual accounts are not in agreement with the accounting records,

the auditor must state that fact in his report.

• (3) Every auditor of a building society has—

• (a) a right of access at all times to the accounting and other records of the society and all other documents relating to its business, and

• (b) a right to require from the officers of the society such information and explanations as he thinks necessary for the performance of the duties of the auditors.

• (4) Where a building society has a connected undertaking, then—

• (a) if the connected undertaking is a body corporate incorporated in any part of the United Kingdom, it is the duty of the connected undertaking and its auditor to give to the society’s auditor such information and explanation, and such access to documents, as that auditor may reasonably require for the purposes of his duties as auditor of the society;

• (b) in any other case, it is the duty of the society, if required by its auditor to do so, to take all such steps as are reasonably open to it to obtain from the connected undertaking such information and explanation and such access as are mentioned above.

• (5) Subsection (4) above applied as regards any body associated with the society which is not a subsidiary undertaking as it applies as regards a subsidiary undertaking of the society.

• (6) If the auditor fails to obtain all the information and explanations and the access to documents which, to the best of his knowledge and belief, are necessary for the purposes of his audit, he shall state that fact in his report.

• (6A) Where more than one person is appointed as auditor, the report must include a statement as to whether all the persons appointed agree on any statements given under subsections (2) and (6) and, if they cannot agree on those statements, the report must include the opinions of each person appointed and give reasons for the disagreement.

• (7) The auditor of a building society have the right—

• (a) to attend any general meeting of the society, and to receive all notices of and other communications relating to any general meeting which any member of the society is entitled to receive, and

• (b) to be heard at any meeting which he attends on any part of the business of the meeting which concerns him as auditor.

• (8) If a building society or other body corporate fails to comply with subsection (4) above, the society or other body shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer of the society or, as the case may be, of the other body who is also guilty of the offence; and if an auditor fails without reasonable excuse to comply with paragraph (a) of that subsection he shall be liable, on summary conviction, to such a fine.

• (9) If a person who is an officer of a building society or of a body which is a connected undertaking of the society knowingly or recklessly makes to the auditor of that or another society or body a statement which—

• (a) conveys or purports to convey any information or explanation which the auditor requires, or is entitled to require, as auditor of the society or other body, as the case may be, and

• (b) is false or misleading in a material particular,

that person shall be liable—

• (i) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine, or both; and

• (ii) on summary conviction, to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum, or both.

Procedure on completion of accounts

Signing of balance sheet: documents to be annexed

80

• (1) Every balance sheet of a building society shall be signed by one director on behalf of the board of directors ....

• (2) The income and expenditure account, . . . and the annual business statement shall be annexed to the balance sheet, and so shall any group accounts; and the auditor’s report shall be attached to it.

• (3) The income and expenditure account, . . . and the annual business statement shall be approved by the board of directors before the balance sheet is signed on their behalf, and so shall any group accounts; and the date of their approval of those documents shall be endorsed on the balance sheet.

• (4) The directors’ report shall be attached to the balance sheet.

• (5) If a balance sheet has not been signed as required by subsection (1) above, and a copy of it is issued, circulated or published, the building society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

• (6) If any copy of a balance sheet is issued, circulated or published—

• (a) without having annexed to it a copy of the income and expenditure account, or

• (b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (c) without having annexed to it a copy of the annual business statement, or

• (d) without having attached to it a copy of the auditor’s report, or

• (e) without having attached to it a copy of the directors’ report,

the building society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

Laying and furnishing accounts, etc. to members, Commission and central office

81

• (1) The directors of every building society shall lay before the society at the annual general meeting the annual accounts for the last financial year.

• (2) The directors of every building society shall send two copies of the annual accounts for the last financial year to the FCA, and, if the society is a PRA-authorised person, one copy to the PRA, not later than 14 days before the annual general meeting at which the accounts are to be considered.

• (3) Every building society shall, as from the date by which at the latest its directors are required to send them to the FCA and, if the society is a PRA-authorised person, the PRA , make copies of the annual accounts available free of charge to members of and depositors with the society at every office of the society and, free of charge, shall send copies of those documents to any member or depositor who demands it.

• (3A) Where a copy of the annual accounts is required to be sent to a member or depositor under subsection (3)—

• (a) they may be sent to him electronically only if they are sent to an electronic address notified to the society by that member or depositor for the purpose; but

• (b) the requirement to send them shall also be treated as satisfied if the conditions set out in subsection (3B) are satisfied.

• (3B) The conditions of this subsection are satisfied in the case of a copy of the annual accounts if—

• (a) the society and the member or depositor have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

• (b) the agreement applies to the annual accounts in question;

• (c) within seven days of his demand, the member or depositor is notified ... of—

• (i) the publication of the accounts on a web site,

• (ii) the address of that web site, and

• (iii) the place on that web site where the accounts may be accessed, and how they may be accessed; and

• (d) the accounts are published on that web site throughout the period beginning on the date on which the member or depositor is notified in accordance with paragraph (c) and ending with the conclusion of the annual general meeting at which the accounts are to be considered.

• (4) If default is made in complying with subsection (1) or (2) above, every person who was a director at any time during the relevant period shall be liable on summary conviction—

• (a) to a fine not exceeding level 5 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding £200 for every day during which the offence continues.

• (5) If, on demand made of it under subsection (3) above, a building society fails, in accordance with that subsection, to make available or, as the case may be, within seven days of the demand, to send, to a person a copy of the annual accounts the society shall be liable on summary conviction—

• (a) to a fine not exceeding level 3 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues,

and so shall any officer who is also guilty of the offence.

• (5A) Where, in a case in which subsection (3A)(b) is relied on for compliance with a requirement under subsection (3)—

• (a) a copy of the annual accounts is published for a part, but not all, of the period mentioned in subsection (3B)(d), but

• (b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society or the officer to prevent or avoid,

no offence is committed under subsection (5) by reason of that failure.

• (6) In subsection (4) above “the relevant period” means the period beginning at the end of the last financial year and ending with the date which falls 14 days before the annual general meeting following the end of that year.

• (7) The FCA shall keep one of the copies of the annual accounts of a building society received by it under subsection (2) above in the public file of the society.

• (8) In this section any reference to the annual accounts includes a reference to the documents annexed or attached to them under section 80.

Auditors' duties to Commission and related rights

82

Part IX — . . . Disputes

Schemes for investigation of complaints

83

Investigation of complaints: supplementary provisions

84

Settlement of disputes

85

• (1) Schedule 14 to this Act shall have effect for the settlement of certain disputes between a building society and a member, or representative of a member, of the society or, as provided by Part II of the Schedule, between a building society and one or more members of the society or a complainant.

• (2) Nothing in that Schedule affects the jurisdiction of any court to hear and determine disputes arising out of any mortgage or any contract other than the rules of a society.

Part X — Dissolution, Winding Up, Mergers and Transfer of Business

Dissolution and winding up

Modes of dissolution and winding up

86

• (1) A building society—

• (a) may be dissolved by consent of the members, or

• (b) may be wound up voluntarily or by the court,

in accordance with this Part; and a building society may not, except where it is dissolved by virtue of section 93(5), 94(10) or 97(9), or following building society insolvency or building society special administration, be dissolved or wound up in any other manner.

• (2) A building society which is in the course of dissolution by consent, or is being wound up voluntarily, may be wound up by the court.

Dissolution by consent

87

• (1) A building society may be dissolved by an instrument of dissolution, with the consent (testified by their signature of that instrument) of three-quarters of the members of the society, holding not less than two-thirds of the number of shares in the society.

• (2) An instrument of dissolution under this section shall set out—

• (a) the liabilities and assets of the society in detail;

• (b) the number of members, and the amount standing to their credit in the accounting records of the society;

• (c) the claims of depositors and other creditors, and the provision to be made for their payment;

• (d) the intended appropriation or division of the funds and property of the society;

• (e) the names of one or more persons to be appointed as trustees for the purposes of the dissolution, and their remuneration.

• (3) An instrument of dissolution made with consent given and testified as mentioned in subsection (1) above may be altered with the like consent, testified in the like manner.

• (4) The provisions of this Act shall continue to apply in relation to a building society as if the trustees appointed under the instrument of dissolution were the board of directors of the society.

• (5) The trustees, within 15 days of the necessary consent being given and testified (in accordance with subsection (1) above) to—

• (a) an instrument of dissolution, or

• (b) any alteration to such an instrument,

shall give notice to the FCA and, if the society is a PRA-authorised person, the PRA of the fact and, except in the case of an alteration to an instrument, of the date of commencement of the dissolution, enclosing a copy of the instrument or altered instrument, as the case may be; and if the trustees fail to comply with this subsection they shall each be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

• (6) An instrument of dissolution under this section, or an alteration to such an instrument, shall be binding on all members of the society as from the date on which the copy of the instrument or altered instrument, as the case may be, is placed in the public file of the society under subsection (10) below.

• (7) The trustees shall, within 28 days from the termination of the dissolution, give notice to the FCA and, if the society is a PRA-authorised person, the PRA of the fact and the date of the termination, enclosing an account and balance sheet signed and certified by them as correct, and showing the assets and liabilities of the society at the commencement of the dissolution, and the way in which those assets and liabilities have been applied and discharged; and, if they fail to do so they shall each be liable on summary conviction—

• (a) to a fine not exceeding level 2 on the standard scale, and

• (b) in the case of a continuing offence, to an additional fine not exceeding £10 for every day during which the offence continues.

• (8) Except with the consent of the appropriate authority , no instrument of dissolution, or alteration of such an instrument, shall be of any effect if the purpose of the proposed dissolution or alteration is to effect or facilitate the transfer of the society’s engagements to any other society or the transfer of its business to a company.

• (9) Any provision in a resolution or document that members of a building society proposed to be dissolved shall accept investments in a company or another society (whether in shares, deposits or any other form) in or towards satisfaction of their rights in the dissolution shall be conclusive evidence of such a purpose as is mentioned in subsection (8) above.

• (10) The FCA shall keep in the public file of the society any notice or other document received by it under subsection (5) or (7) above and shall record in that file the date on which the notice or document is placed in it.

Voluntary winding up

88

• (1) A building society may be wound up voluntarily under the applicable winding up legislation if it resolves by special resolution that it be wound up voluntarily, but a resolution may not be passed if—

• (a) the conditions in section 90D are not satisfied, or

• (b) the society is in building society insolvency or building society special administration.

• (1A) A resolution under subsection (1) shall have no effect without the prior approval of the court.

• (2) A copy of any special resolution passed for the voluntary winding up of a building society"shall be sent by the society to the FCA and, if the society is a PRA-authorised person, the PRA within 15 days after it is passed; and the FCA must keep a copy in the public file of the society.

• (3) A copy of any such resolution shall be annexed to every copy of the memorandum or of the rules issued after the passing of the resolution.

• (4) If a building society fails to comply with subsection (2) or (3) above the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.

• (5) For the purposes of this section, a liquidator of the society shall be treated as an officer of it.

Winding up by court: grounds and petitioners

89

• (1) A building society may be wound up under the applicable winding up legislation by the court on any of the followng grounds in addition to the grounds referred to or specified in section 37(1), that is to say, if—

• (a) the society has by special resolution resolved that it be wound up by the court;

• (b) the number of members is reduced below ten;

• (c) the number of directors is reduced below two;

• (d) being a society registered as a building society under this Act or the repealed enactments, the society has not been given permission under Part 4A of the Financial Services and Markets Act 2000 to accept deposits and more than three years has expired since it was so registered;

• (e) the society’s permission under Part 4A of the Financial Services and Markets Act 2000 to accept deposits has been cancelled (and no such permission has subsequently been given to it);

• (f) the society exists for an illegal purpose;

• (g) the society is unable to pay its debts; or

• (h) the court is of the opinion that it is just and equitable that the society should be wound up.

• (2) Except as provided by subsection (3) below, section 37 or the applicable winding up legislation, a petition for the winding up of a building society may be presented by—

• (a) the FCA, after consulting the PRA if the society is a PRA-authorised person,

• (aa) if the society is a PRA-authorised person, the PRA, after consulting the FCA,

• (b) the building society or its directors,

• (c) any creditor or creditors (including any contingent or any prospective creditor), or

• (d) any contributory or contributories,

or by all or any of those parties, together or separately.

• (3) A contributory may not present a petition unless either—

• (a) the number of members is reduced below ten, or

• (b) the share in respect of which he is a contributory has been held by him, or has devolved to him on the death of a former holder and between them been held, for at least six months before the commencement of the winding up.

• (4) For the purposes of this section, in relation to a building society,

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

• (b) the reference to its existing for an illegal purpose includes a reference to its existing after it has ceased to comply with the requirement imposed by section 5(1)(a) (purpose or principal purpose).

• (5) In this section, “contributory” has the same meaning as in paragraph 9(2) or, as the case may be, paragraph 37(2) of Schedule 15 to this Act.

Application of winding up legislation to building societies

90

• (1) In this section “the companies winding up legislation” means the enactments applicable in relation to England and Wales, Scotland or Northern Ireland which are specified in paragraph 1 of Schedule 15 to this Act (including any enactment which creates an offence by any person arising out of acts or omissions occurring before the commencement of the winding up).

• (2) In its application to the winding up of a building society, by virtue of section 88(1) or 89(1), the companies winding up legislation shall have effect with the modifications effected by Parts I to III of Schedule 15 to this Act; and the supplementary provisions of Part IV of that Schedule shall also have effect in relation to such a winding up.

• (3) In sections 37, 88, 89 and 103, “the applicable winding up legislation” means the companies winding up legislation as so modified.

Power of court to declare dissolution of building society void

91

• (1) Where a building society has been dissolved under section 87 or following a winding up, building society insolvency or building society special administration, the High Court or, in relation to a society whose principal office was in Scotland, the Court of Session, may, at any time within 12 years after the date on which the society was dissolved, make an order under this section declaring the dissolution to have been void.

• (2) An order under this section may be made, on such terms as the court thinks fit, on an application by the trustees under section 87 or the liquidator, building society liquidator or building society special administrator, as the case may be, or by any other person appearing to the Court to be interested.

• (3) When an order under this section is made, such proceedings may be taken as might have been taken if the society has not been dissolved.

• (4) The person on whose application the order is made shall, within seven days of its being so made, or such further time as the Court may allow, furnish the FCA and, if the society is a PRA-authorised person, the PRA with a copy of the order; and the FCA must keep a copy in the public file of the society.

• (5) If a person fails to comply with subsection (4) above, he shall be liable on summary conviction—

• (a) to a fine not exceeding level 3 on the standard scale, and

• (b) in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues.

Supplementary

92

Where at any time a building society is being wound up or dissolved by consent, or is in building society insolvency or building society special administration, a borrowing member shall not be liable to pay any amount other than one which, at that time, is payable under the mortgage or other security by which his indebtedness to the society in respect of the loan is secured.

Mergers

Amalgamations

93

• (1) Any two or more buildings societies desiring to amalgamate may do so by establishing a building society as their successor in accordance with this section and Schedule 16 to this Act

• (2) In order to establish a building society as their successor the societies desiring to amalgamate must—

• (a) agree the purpose or principal purpose of their successor to be that of making loans which are secured on residential property and are funded substantially by its members, and agree upon the extent of its powers, in a memorandum which complies with the requirements of Schedule 2 to this Act;