Building Societies Act 1986

Part III — Minimum Requirements for Recognised Schemes: Other Provisions

Grounds of complaint

1

• (1) The grounds for making action by a building society or connected undertaking subject to investigation under the scheme must be that the action constitutes—

• (a) in the case of a building society, a breach of the society’s obligations under this Act, its rules or any contract, or

• (b) in the case of a connected undertaking, a breach of the undertaking’s obligations under its rules (if any) or any contract, or

• (c) unfair treatment, or

• (d) maladministration, or

• (e) a decision to which sub-paragraph (2) below applies, or action consequential on such a decision,

in relation to the complainant and has caused him pecuniary loss or expense or inconvenience.

• (2) This sub-paragraph applies to any decision in connection with the provision of a relevant service which is made otherwise than in the legitimate exercise of commercial judgment.

Permissible exclusions from investigation

2

A scheme must not exclude action from investigation on any other than the following grounds, that is to say—

• (a) that the complaint is frivolous or vexatious;

• (b) that the action is the subject of proceedings in a court of law or was the subject of such proceedings in which a judgment on the merits was given;

• (bb) that the action is the subject of an investigation by another adjudicator (by whatever name called) operating under a comparable scheme (whether or not a recognised scheme), or was the subject of such an investigation in which a decision on the merits was made;

• (c) that, where the society or connected undertaking has a procedure for the resolution of complaints by it (an “internal procedure"), the procedure has not been invoked or has not been exhausted;

• (d) that there has been undue delay in having the matter investigated under the scheme , or in furnishing evidence in support of the complaint; or

• (e) that the action in question occurred outside the United Kingdom.

Note: An international procedure for resolution of complaints is not to be treated as having been invoked unless the complainant has made his complaint to the principal office of the society or, as the case may be, of the connected undertaking and is not to be treated as having been exhausted unless more than three months has elapsed since the complainant invoked it without any decision on his complaint having been communicated to him.

Note: Delay in having a matter investigated under the scheme is not “undue delay" unless at least six months (disregarding the period for exhausting the society’s or connected undertaking’s internal procedure) has expired since the matter came to the knowledge of the complainant; and a person is not, for this purpose, to be presumed to have knowledge of the contents of a document which contains or relates to the terms or proposed terms of any transaction between him and the society.

Note: Delay in furnishing evidence in support of the complaint is not “undue delay" unless at least six months have elapsed since the adjudicator acknowledged receipt of the complaint.

Functions of adjudicator

3

A scheme must, as regards the duties and powers attached to the investigation of complaints under the scheme—

• (a) impose on the adjudicator a duty, subject to the provision made in pursuance of sub-paragraph (c) below, to investigate and determine any complaint duly made;

• (b) impose on the adjudicator a duty to afford the complainant and the society or connected undertaking an opportunity to make representations (whether orally or in writing) in relation to the action complained of;

• (c) confer power on the adjudicator to advise, mediate or act as conciliator before proceeding further with an investigation;

• (d) confer power on the adjudicator to extend the scope of his investigation to other matters related to the action complained of; and

• (e) confer on an adjudicator such powers to require information and documents relevant to the matter to be furnished to him as are necessary for the purposes of the investigation.

4

• (1) Subject to any provision made in pursuance of sub-paragraph (3) below, a scheme must authorise the adjudicator, in reaching his decision, to have regard to, but not to be bound by, any matter (whether or not of obligation) relevant to the action complained of and to question any decision.

• (2) A scheme must impose on the adjudicator a duty, in reaching his decision, to have regard to—

• (a) the rules (if any) of the society or connected undertaking;

• (b) the provisions of any deed or contract binding the society and the complainant or, as the case may be, the connected undertaking and the complainant;

• (c) the provisions of any code of conduct applicable to the conduct by the society or connected undertaking of its affairs or business;

• (d) any advertisement issued by the society or connected undertaking in connection with any aspect of its activities and any communication with the complainant.

• (3) Subject to sub-paragraph (4) below, a scheme may preclude the adjudicator, in his determination, from questioning the merits of any decision taken by the society or connected undertaking with reference to—

• (a) the taking or conduct of legal proceedings to enforce any right of the society or connected undertaking; or

• (b) the creditworthiness, for the purposes of any advance or other service or facility, of the complainant;

but not otherwise.

• (4) Where investigation of a complaint on the ground of maladministration involves consideration by the adjudicator of any decision taken with reference to the creditworthiness of the complainant the scheme must confer power on the adjudicator to direct the society or associated body to take its decision again and reach it by proper procedures.

5

• (1) Subject to sub-paragraph (2) below, a scheme must confer power on the adjudicator, by his determination, to do either or both of the following, that is to say—

• (a) direct the society or connected undertaking whose action is complained of to take or desist from taking such steps as are specified in the determination;

• (b) order the society or connected undertaking whose action is complained of to pay the complainant a sum by way of compensation for the loss, expense or inconvenience caused by the action.

• (2) A scheme may impose a limit on the amount of compensation that a society or connected undertaking may be ordered to pay a complainant, but the limit must not be less than £100,000.

Effect of determinations and their communication

6

• (1) Subject to any provision made in pursuance of sub-paragraph (2) or (3) below, a scheme must provide that, if the complainant, by notice to the adjudicator within the period specified in the scheme, accepts his determination the society or connected undertaking is under an obligation to take the steps it is directed to take or pay the compensation awarded or both.

• (2) A scheme may relieve a society of the obligation imposed by a determination if, but only if, the society undertakes an obligation to give notice to its members of the reasons for its non-fulfilment of the obligations imposed by the determination in the next directors’ report under section 75 and to give notice of those reasons to the public in such manner as the adjudicator requires.

• (3) A scheme may relieve a connected undertaking of the obligations imposed by a determination if, but only if, each of the building societies of which it is a connected undertaking undertakes an obligation to give notice to its members of the reasons for the non-fulfilment of the obligations imposed by the determination in the next directors’ report under section 75 and to give notice of those reasons to the public in such manner as the adjudicator requires.

7

A scheme must impose on the adjudicator an obligation not to disclose, whether in his determination or otherwise, any information or opinion furnished in confidence to the society or, as the case may be, to the connected undertaking for the purpose of any action on its part.

Reports by adjudicator to administering body

8

A scheme must require reports by the adjudicator as to the discharge of his functions to be made to the body administering the scheme not less frequently than once in every year.

Publication

9

• (1) A scheme must permit the body administering the scheme to publish the whole or any parts of the reports made to them by the adjudicator.

• (2) A scheme, if it makes the provision authorised by paragraph 6(2) or (3) above, must require the body administering the scheme to send to the Commission, not less frequently than once in every year, particulars of the cases in which building societies have undertaken the alternative obligation authorised by either or both of those sub-paragraphs.

SCHEDULE 13

Preliminary

1

For the purposes of this Schedule, a scheme—

• “qualifies for recognition” if it makes provision for the matters specified in Part I of Schedule 12 and the services action in relation to which is subject to investigation under the scheme consist of or include one or more relevant services; and

• “conforms to the relevant requirements” if, in relation to a relevant service, it makes action in relation to that service subject to investigation in accordance with Part III of that Schedule;

and any reference to a scheme qualifying for recognition, or being recognised, to any “extent" indicates recognition of it for the purpose of investigations of action in relation to one or more relevant services.

2

• (1) The function of the Commission of granting recognition of schemes is exercisable, in accordance with paragraph 4 or 5 below, on the Commission’s own motion or on a submission for its approval made by or on behalf of any building societies.

• (2) In this Schedule, in relation to a scheme recognised by the Commission to any extent, a “direction for its recognition” means a direction that the scheme is, to the extent specified in the direction, a scheme recognised by the Commission.

The register of recognised schemes

3

• (1) The central office shall maintain a register of recognised schemes for the investigation of complaints (“the register"), and the register shall—

• (a) contain a copy of every scheme and the direction for its recognition a copy of which is directed to be kept in it by any provision of this Part of this Schedule; and

• (b) be available for inspection on reasonable notice by members of the public on payment of the prescribed fee.

• (2) Any member of the public shall be entitled, on payment of the prescribed fee, to be furnished with a copy of any scheme and the direction for its recognition kept in the register.

Procedure for recognition: Commission’s initiative

4

• (1) If it appears to the Commission, from its own enquiries or from information made available to it, that a scheme has been made or is in operation which qualifies for recognition the Commission shall consider the scheme and the extent to which it qualifies for recognition.

• (2) If, on consideration of a scheme, the Commission is satisfied that the scheme qualifies for recognition and conforms to the relevant requirements in relation to one or more relevant services, the Commission shall approve the scheme as a recognised scheme to such extent as it considers appropriate.

• (3) The Commission shall, on approving a scheme under this paragraph, give a direction for its recognition.

• (4) On giving a direction for the recognition of a scheme, the Commission shall send a copy of the scheme and of the direction to the central office; and the central office shall keep the copy of the scheme and of the direction in the register.

Procedure for recognition: submission by societies

5

• (1) Submission by or on behalf of building societies of a scheme for approval by the Commission as a recognised scheme shall be made by an application for recognition which shall be—

• (a) made in such manner as the Commission specifies, either generally or in any particular case; and

• (b) accompanied by such information as the Commission may reasonably require, either generally or in any particular case, in order to make its decision on the application;

and in this paragraph “the applicants” means those societies or the person acting on their behalf for the purposes of the application.

• (2) Where an application is made to the Commission for recognition of a scheme then—

• (a) if it appears to the Commission that the scheme qualifies for recognition and conforms to the relevant requirements in respect of one or more relevant services, the Commission shall approve the scheme as a recognised scheme to such extent as it considers appropriate;

• (b) if it appears to the Commission that the scheme, with modifications, will, in addition to qualifying for recognition, conform to the relevant requirements in respect of one or more relevant services, and the applicants agree on appropriate modifications within the period of 21 days from the date on which the Commission notifies the applicants of the modifications it proposes for their agreement, the Commission shall approve the scheme as modified as a recognised scheme to such extent as it considers appropriate;

but otherwise it shall withold its approval.

• (3) The Commission shall, on approving a scheme, give a direction for its recognition and send copies of the direction to the applicants.

• (4) On giving a direction for the recognition of a scheme, the Commission shall also send a copy of the scheme and of the direction to the central office; and the central office shall keep the copy of the scheme and of the direction in the register.

Procedure on accession to schemes

6

• (1) A building society or connected undertaking of a building societywhich accedes to a recognised scheme or has acceded to a scheme which becomes a recognised scheme shall, within the period of 21 days beginning with the date of its accession or on which it receives a copy of the direction for its recognition, as the case may be, send a notice of that fact to the central office and to the Commission.

• (2) A notice by a society or undertakingunder sub-paragraph (1) above shall specify the relevant services action in relation to which by the society or undertakingis subject to investigation under the scheme.

• (3) The central office, on receiving such a notice from a society, shall, if satisfied that the scheme is a recognised scheme to the extent required to enable the society to comply with its duty under section 83(3) in relation to the relevant services specified in the notice record the accession of the society to the scheme in the public file of the society.

• (3A) The central office, on receiving such a notice from a connected undertaking of a society, shall, if satisfied that the scheme is a recognised scheme to the extent required to enable the society to comply with its duty under section 83(4) in relation to the relevant services specified in the notice record the accession of the undertaking to the scheme in the public file of the society.

• (4) If a building society or connected undertakingfails to comply with sub-paragraph (1) above, the society or undertakingshall be liable on summary conviction—

• (a) to a fine not exceeding level 4 on the standard scale; and

• (b) in the case of a continuing offence, to an additional fine not exceeding £100 for every day during which the offence continuesX;

and so shall any director of the society or undertakingwho is also guilty of the offence.

Withdrawal of recognition

7

• (1) The Commission may withdraw its recognition of a scheme if it appears to the Commission that—

• (a) the scheme does not conform to the relevant requirements; or

• (b) the scheme is so operated as not to conform to those requirements.

• (2) Withdrawal of recognition of a scheme under this paragraph may operate in relation to the scheme as a whole or to the extent to which the scheme makes one or more relevant services subject to investigation under it.

8

• (1) If the Commission proposes at any time to withdraw recognition of a scheme to any extent, it shall serve on each member, on the body administering the scheme and on the adjudicator under the scheme, a notice stating—

• (a) that the Commission proposes to withdraw recognition and to what extent;

• (b) the grounds for the proposed withdrawal of recognition; and

• (c) that the person receiving the notice may make representations with respect to the proposed withdrawal within such period of not less than 14 days as may be specified in the notice.

• (2) The Commission shall, before reaching a decision on whether to withdraw recognition, consider any representations made to it in accordance with sub-paragraph (1) above and shall serve on every person on whom it served a notice under that sub-paragraph a notice stating its decision and the grounds for it.

9

Withdrawal of recognition by the Commission shall take effect as from such date as is specified in the notice of its decision, being a date not less than one year nor more than two years after the date of the notice.

Withdrawal from membership

10

• (1) A building society or connected undertaking of a building societywishing to withdraw from membership of a recognised scheme shall send notice of its proposed withdrawal to the central office and to the Commission.

• (2) A notice by a society or undertakingunder sub-paragraph (1) above shall specify the relevant servicesaction in relation to which by the society or undertakingis subject to investigation under the scheme and the recognised scheme or recognised schemes of which it is or, on its withdrawal, will become a member under which, as regards each of the relevant services specified in the notice, action by the society or undertakingis or will be subject to investigation.

• (3) The central office, on receiving such a notice from a society, if satisfied that its withdrawal from the scheme will not result in a failure by it to comply with the duty imposed on it by section 83(3), shall confirm the withdrawal of the society from the scheme; but, if the central office is not so satisfied, the central office shall withold its confirmation.

• (3A) The central office, on receiving such a notice from a connected undertaking of a society, if satisfied that its withdrawal from the scheme will not result in a failure by the society to comply with the duty imposed on it by section 83(4), shall confirm the withdrawal of the undertaking from the scheme; but, if the central office is not so satisfied, the central office shall withhold its confirmation.

• (4) If the central office withholds its confirmation of a society’s or undertaking’swithdrawal from a scheme, the society or undertakingshall continue to a member of the scheme and bound and entitled under the scheme accordingly.

• (5) On confirming the withdrawal of a society or connected undertaking of a societyfrom a scheme the central office shall send to the society or undertakingand to the Commission notice of its decision and the central office shall record the decision in the public file of the society.

SCHEDULE 14

Part I — Proceedings in Court

Jurisdiction of the court

1

• (1) No court other than the High Court or, in the case of a building society whose principal office is in Scotland the Court of Session, shall have jurisdiction to hear and determine disputes to which this paragraph applies; and, in this Part of this Schedule, “the court” means the High Court or, as the case may be, the Court of Session.

• (2) This paragraph applies to any dispute—

• (a) between a building society and a member of the society in his capacity as a member, or

• (b) between a building society and a representative of such a member in that capacity,

in respect of any rights or obligations arising from the rules of the society or any provision of this Act or any statutory instrument under it.

• (3) Except in the cases referred to in sub-paragraph (5) below, no disputes to which this paragraph applies may be referred to arbitration.

• (4) The court shall not hear and determine any dispute arising out of section 61(8)(a) or paragraph 20A(10)(a) or 31(4)(a) of Schedule 2 to this Act.

• (5) The court shall not hear and determine any dispute which is required to be referred to arbitration under paragraph 4 below or which is referred to the FCA under paragraph 6 or to an adjudicator under paragraph 7 below except as provided in paragraph 2 below.

2

The court may hear and determine a dispute falling within paragraph 1(5) above in any case where, on the application of any person concerned, it appears to the court—

• (a) that application has been made by either party to the dispute to the other party for the purpose of having the dispute settled by arbitration, and

• (b) that either arbitrators have not been appointed within 40 days of that application or the arbitrators have refused, or have neglected for a period of 21 days, to proceed with the reference or make an award.

Right of FCA and PRA to be heard

3

• (1) Any person who institutes proceedings in the court in relation to a dispute to which paragraph 1 above applies shall give notice of the fact and of the matter in dispute to the FCA and, if the society is a PRA-authorised person, the PRA .

• (2) The court shall not proceed to hear a dispute to which paragraph 1 applies until the court is satisfied that the notice required by sub-paragraph (1) above has been given.

• (3) The FCA and, if the society is a PRA-authorised person, the PRA shall be entitled, with the leave of the court, to attend and to be heard at any hearing of a dispute to which paragraph 1 applies.

Part II — Arbitration

Circulation of election addresses, resolutions and statements

4

• (1) If the rules of the society so provide, any dispute in respect of a refusal by a building society to send to its members—

• (a) copies of an election address or a revised election address, in accordance with section 61(7), or

• (b) any document required to be sent under paragraph 20A(1)(b) or 31(1) of Schedule 2 to this Act,

shall, unless the refusal is on one of the grounds specified in sub-paragraph (2) below, be referred to arbitration.

• (2) Those grounds are—

• (a) that publicity for the document in question would be likely to diminish substantially the confidence in the society of investing members of the public, or

• (b) that the rights conferred by section 61(7) or paragraph 20A(1)(b) or 31(1) are being abused to seek needless publicity for defamatory matter.

Procedure on a reference to arbitration

5

• (1) This paragraph has effect in relation to an arbitration under paragraph 4(1) above.

• (2) One or more arbitrators shall be appointed in the manner provided for by the rules of the building society; and so shall another arbitrator if an appointed arbitrator dies or refuses to act.

• (3) No arbitrator acting on a reference shall be beneficially interested (whether directly or indirectly) in the funds of the society.

• (4) The rules of the society may provide for the procedure to be followed on a reference to arbitration.

• (5) An award made by arbitrators, or the majority of them, shall be final and binding.

• (6) For the purposes of Part I of the Arbitration Act 1996 the rules of the society shall be treated as an arbitration agreement.

• (7) In relation to Scotland, sub-paragraph (6) above shall be omitted.

Access to register of members

6

• (1) Any dispute as to the rights of a member of a building society under paragraph 15 of Schedule 2 to this Act shall be referred to the FCA .

• (2) The reference of a dispute to the FCA under this paragraph shall be treated as a reference to arbitration; and its award shall have the same effect as that of an arbitrator acting in a reference under paragraph 4(1) above.

• (3) The FCA must consult the PRA before making any such award.

Disputes cognizable under a scheme

7

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

General

8

In this Part of this Schedule, in relation to an arbitration in Scotland, references to an arbitrator shall be read as references to an arbiter.

SCHEDULE 15

Part I — General Mode of Application

1

The enactments which comprise the companies winding up legislation (referred to in this Schedule as “the enactments”) are the provisions of—

• (a) Parts IV, VI, VII , XII and XIII of the Insolvency Act 1986, or

• (b) Articles 5 to 8 of Part I and Parts V, VII and XI of the Insolvency (Northern Ireland) Order 1989; or

and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or Articles 2(6) and 373 of, and Schedule 7 to, the Insolvency (Northern Ireland) Order 1989.

2

Subject to the following provisions of this Schedule, the enactments apply to the winding up of building societies as they apply to the winding up of companies limited by shares and registered under the Companies Act 2006 in England and Wales or Scotland or (as the case may be) in Northern Ireland.

3

• (1) The enactments shall, in their application to building societies, have effect with the substitution—

• (a) for “company” of “ building society ” (except as otherwise specified in paragraphs 33B and 55G below) ;

• (b) for “the registrar of companies” or “the registrar” of “ Financial Conduct Authority ”;

• (c) for “the articles” of “ the rules ”; and

• (d) for “registered office” of “ principal office ”.

• (2) In the application of the enactments to building societies—

• (aa) every reference to a company registered in Scotland shall have effect as a reference to a building society whose principal office is situated in Scotland;

• (aa) every reference to a company registered in Scotland shall have effect as a reference to a building society whose registered office is situated in Scotland;

• (ab) a reference to the debts of a company includes a reference to sums due to shareholding members of a building society in respect of deposits;

• (a) every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and

• (b) every reference to an administrative receiver shall be omitted.

4

• (1) Where any of the enactments as applied to building societies requires a notice or other document to be sent to the FCA , it shall have effect as if it required the FCA to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.

• (2) Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.

5

Any enactment which specifies a money sum altered by order under section 416 of the Insolvency Act 1986, or, as the case may be, Article 362 of the Insolvency (Northern Ireland) Order 1989, (powers to alter monetary limits) applies with the effect of the alteration.

Part II — Modified Application of Insolvency Act 1986

Preliminary

6

In this Part of this Schedule, Part IV of the Insolvency Act 1986 is referred to as “Part IV”; and that"Act is referred to as “the Act”.

Members of a building society as contributories in winding up

7

• (1) Section 74 (liability of members) of the Act is modified as follows.

• (2) In subsection (1), the reference to any past member shall be omitted.

• (3) Paragraphs (a) to (d) of subsection (2) shall be omitted; and so shall subsection (3).

• (3A) In paragraph (f) of subsection (2) the reference to a sum due to a member of the company by way of dividends, profits or otherwise does not include a sum due to a shareholding member of a building society in respect of a deposit.

• (4) The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.

8

Sections 75 to 78 and 83 in Chapter I of Part IV (miscellaneous provisions not relevant to building societies) do not apply.

9

• (1) Section 79 (meaning of “contributory”) of the Act does not apply.

• (2) In the enactments as applied to a building society, “contributory”—

• (a) means every person liable to contribute to the assets of the society in the event of its being wound up, and

• (b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

• (c) includes persons who are liable to pay or contribute to the payment of—

• (i) any debt or liability of the building society being wound up, or

• (ii) any sum for the adjustment of rights of members among themselves, or

• (iii) the expenses of the winding up;

but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.

Voluntary winding up

10

• (1) Section 84 of the Act does not apply.

• (2) In the enactments as applied to a building society, the expression “resolution for voluntary winding up” means a resolution passed under section 88(1) of this Act.

11

In subsection (1) of section 101 (appointment of liquidation committee) of the Act, the reference to functions conferred on a liquidation committee by or under that Act shall have effect as a reference to its functions by or under that Act as applied to building societies.

12

• (1) Section 107 (distribution of property) of the Act does not apply; and the following applies in its place.

• (2) Subject to the provisions of Part IV relating to preferential payments, a building society’s property in a voluntary 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.

• (3) In sub-paragraph (2) 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.

13

Sections 110 and 111 (liquidator accepting shares, etc. as consideration for sale of company property) of the Act do not apply.

14

Section 116 (saving for certain rights) of the Act shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.

Winding up by the court

15

In sections 117 (High Court and county court jurisdiction) and 120 (Court of Session and sheriff court jurisdiction) of the Act, each reference to a company’s share capital paid up or credited as paid up shall have effect as a reference to the amount standing to the credit of shares in a building society as shown by the latest balance sheet.

16

• (1) Section 122 (circumstances in which company may be wound up by the court) of the Act does not apply in relation to a building society whose principal office is situated in England and Wales.

• (2) Section 122 has effect in relation to a building society whose principal office is situated in Scotland as if subsection (1) were omitted.

17

Section 124 (application for winding up) of the Act does not apply.

18

• (1) In section 125 (powers of court on hearing of petition) of the Act, subsection (1) applies with the omission of the words from “but the court” to the end of the subsection.

• (2) The conditions which the court may impose under section 125 of the Act include conditions for securing—

• (a) that the building society be dissolved by consent of its members under section 87, or

• (b) that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or

• (c) that the society transfers its business to a company under section 97,

and may also include conditions for securing that any default which occasioned the petition be made good and that the costs, or in Scotland the expenses, of the proceedings on that petition be defrayed by the person or persons responsible for the default.

19

Section 126 (power of court, between petition and winding up order, to stay or restrain proceedings against company) of the Act has effect with the omission of subsection (2).

20

If, before the presentation of a petition for the winding up by the court of a building society, an instrument of dissolution under section 87 is placed in the society’s public file, section 129(1) (commencement of winding up by the court) of the Act shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.

21

• (1) Section 130 of the Act (consequences of winding-up order) shall have effect with the following modifications.

• (2) Subsections (1) and (3) shall be omitted.

• (3) A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the FCA and, if the society is a PRA-authorised person, the PRA ; and the FCA must keep the notice in the public file of the society.

• (4) If a building society fails to comply with sub-paragraph (3) above, it 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.

22

Section 140 (appointment of liquidator by court in certain circumstances) of the Act does not apply.

23

In the application of sections 141(1) and 142(1) (liquidation committees), of the Act to building societies, the references to functions conferred on a liquidation committee by or under that Act shall have effect as references to its functions by or under that Act as so applied.

24

The conditions which the court may impose under section 147 (power to stay or sist winding up) of the Act shall include those specified in paragraph 18(2) above.

25

Section 154 (adjustment of rights of contributories) of the Act shall have the effect with the modification that any surplus is to be distributed in accordance with the rules of the society.

26

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

Winding up: general

27

Section 187 (power to make over assets to employees) of the Act does not apply.

28

• (1) In section 201 (dissolution: voluntary winding up) of the Act, subsection (2) applies without the words from “and on the expiration” to the end of the subsection and, in subsection (3), the word “However” shall be omitted.

• (2) Sections 202 to 204 (early dissolution) of the Act do not apply.

29

In section 205 (dissolution: winding up by the court) of the Act, subsection (2) applies with the omission of the words from “and, subject” to the end of the subsection; and in subsections (3) and (4) references to the Secretary of State shall have effect as references to the appropriate authority .

Penal provisions

30

Sections 216 and 217 of the Act (restriction on re-use of name) do not apply.

31

• (1) Sections 218 and 219 (prosecution of delinquent officers) of the Act do not apply in relation to offences committed by members of a building society acting in that capacity.

• (2) Sections 218(5) of the Act and subsections (1) and (2) of section 219 of the Act do not apply.

• (3) The references in subsections (3) and (4) of section 219 of the Act to the Secretary of State shall have effect as references to the FCA ; and the reference in subsection (3) to subsection 218 of the Act shall have effect as a reference to that section as supplemented by paragraph 32 below.

32

• (1) Where a report is made to the prosecuting authority (within the meaning of section 218) under section 218(4) of the Act, in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the FCA for further enquiry.

• (2) On such a reference to it the FCA shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on the matter.

• (3) An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.

Preferential debts

33

Section 387 (meaning in Schedule 6 of “the relevant date”) of the Act applies with the omission of subsections (2) and (4) to (6).

Part III — Modified application of Insolvency (Northern Ireland) Order 1989

Preliminary

34

In this Part of this Schedule, Part V of the Insolvency (Northern Ireland) Order 1989 is referred to as “Part V”, that Order is referred to as “the Order” and references to “Articles” are references to Articles of that Order.

Members of building society as contributories in winding up

35

• (1) Article 61 (liability of members) is modified as follows.

• (2) In paragraph (1), the reference to any past member shall be omitted.

• (3) Sub-paragraphs (a) to (d) of paragraph (2) shall be omitted; and so shall paragraph (3).

• (3A) In sub-paragraph (f) of paragraph (2) the reference to a sum due to a member of the company by way of dividends, profits or otherwise does not include a sum due to a shareholding member of a building society in respect of a deposit.

• (4) The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.

36

Articles 62 to 65 and 69 in Chapter I of Part V (miscellaneous provisions not relevant to building societies) do not apply.

37

In the enactments as applied to a building society, “contributory”—

• (a) means every person liable to contribute to the assets of the society in the event of its being wound up, and

• (b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and

• (c) includes persons who are liable to pay or contribute to the payment of—

• (i) any debt or liability of the building society being wound up, or

• (ii) any sum for the adjustment of rights of members among themselves, or

• (iii) the expenses of the winding up;

but does not include persons liable to contribute by virtue of a declaration by the Court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading).

Voluntary winding up

38

• (1) Article 70 does not apply.

• (2) In the enactments as applied to a building society, the expression “resolution for voluntary winding up” means a resolution passed under section 88(1) of this Act.

39

In paragraph (1) of Article 87 (appointment of liquidation committee), the reference to functions conferred on a liquidation committee by or under the Order shall have effect as a reference to its functions by or under the Order as applied to building societies.

40

• (1) Article 93 (distribution of property) does not apply; and the following applies in its place.

• (2) Subject to the provisions of Part V relating to preferential payments, a building society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors (including any liability resulting from the variation to the liquidator’s duty effected by section 28 or 31 of this Act) pari passu and, subject to that application, in accordance with the rules of the society.

• (3) In sub-paragraph (2) 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.

41

Articles 96 and 97 (liquidator accepting shares, etc, as consideration for sale of company property) do not apply.

42

Article 101 (saving for certain rights) shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.

Winding up by the court

43

Article 102 (circumstances in which company may be wound up by the High Court) does not apply.

44

Article 104 (application for winding up) does not apply.

45

• (1) In Article 105 (powers of High Court on hearing of petition), paragraph (1) applies with the omission of the words from “but the Court” to the end of the paragraph.

• (2) The conditions which the High Court may impose under Article 105 include conditions for securing—

• (a) that the building society be dissolved by consent of its members under section 87, or

• (b) that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or

• (c) that the society transfers its business to a company under section 97,

and may also include conditions for securing that any default which occasioned the petition be made good and that the costs of the proceedings on that petition be defrayed by the person or persons responsible for the default.

46

Article 106 (power of High Court, between petition and winding-up order, to stay or restrain proceedings against company) has effect with the omission of paragraph (2).

47

If, before the presentation of a petition for the winding up by the High Court of a building society, an instrument of dissolution under section 87 is placed in the society’s public file, Article 109(1) (commencement of winding up by the High Court) shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.

48

• (1) Article 110 (consequences of winding-up order) shall have effect with the following modifications.

• (2) Paragraphs (1) and (3) shall be omitted.

• (3) A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the FCA and, if the society is a PRA-authorised person, the PRA ; and the FCA must keep the notice in the public file of the society.

• (4) If a building society fails to comply with sub-paragraph (3) above, it 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.

49

Article 119 (appointment of liquidator by High Court in certain circumstances) does not apply.

50

In the application of Article 120(1) (liquidation committee) to building societies, the references to functions conferred on a liquidation committee by or under the Order shall have effect as references to its function by or under the Order as so applied.

51

The conditions which the High Court may impose under Article 125 (power to stay winding up) shall include those specified in paragraph 45(2) above.

52

Article 132 (adjustment of rights of contributories) shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.

Winding up: general

53

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

Penal provisions

54

Article 158 (power to make over assets to employees) does not apply.

55

• (1) In Article 166 (dissolution: voluntary winding up), paragraph (2) applies without the words from “and on the expiration” to the end of the paragraph and, in paragraph (3), the word “However” shall be omitted.

• (2) Articles 167 and 168 (early dissolution) do not apply.

Part IV — Dissolution of Building Society wound up (England and Wales, Scotland and Northern Ireland)

56

• (1) Where a building society has been wound up voluntarily, it is dissolved as from 3 months from the date of the placing in the public file of the society of the return of the final meetings of the society and its creditors made by the liquidator under—

• (a) section 94 or (as the case may be) 106 of the Insolvency Act 1986 (as applied to building societies), or on such other date as is determined in accordance with section 201 of that Act, or

• (b) Article 80 or (as the case may be) 92 of the Insolvency (Northern Ireland) Order 1989(as so applied), or on such other date as is determined in accordance with that Article,

as the case may be.

• (2) Where a building society has been wound up by the court, it is dissolved as from 3 months from the date of the placing in the public file of the society of—

• (a) the liquidator’s notice under section 172(8) of the Insolvency Act 1986 (as applied to building societies) or, as the case may be, Article 146(7) of the Insolvency (Northern Ireland) Order 1989 (as applied to building societies), or

• (b) the notice of the completion of the winding up from the official receiver or the official receiver for Northern Ireland,

or on such other date as is determined in accordance with section 205 of that Act or Article 169 of that Order, as the case may be.

57

• (1) Sections 1012 to 1023 and 1034 of the Companies Act 2006 (property of dissolved company) apply in relation to the property of a dissolved building society (whether dissolved under section 87 or following its winding up) as they apply in relation to the property of a dissolved company.

• (2) Paragraph 3(1) above shall apply to those sections for the purpose of their application to building societies.

• (3) Any reference in those sections to restoration to the register shall be read as a reference to the effect of an order under section 91 of this Act.

Insolvency rules and fees: England and Wales and Scotland

58

• (1) Rules may be made under section 411 of the Insolvency Act for the purpose of giving effect, in relation to building societies, to the provisions of the applicable winding up legislation.

• (2) An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the applicable winding up legislation and the performance by the official receiver or the Secretary of State of functions under it.

Insolvency rules and fees: Northern Ireland

59

• (1) Rules may be made under Article 359 of the Insolvency (Northern Ireland) Order 1989 for the purpose of giving effect in relation to building societies, to the provisions of the applicable winding up legislation.

• (2) An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the applicable winding-up legislation and the performance by the official receiver for Northern Ireland or that Department of functions under it.

SCHEDULE 16

Part I — Issue of Statements to Members

1

• (1) A building society which desires—

• (a) to amalgamate with one or more other building societies, or

• (b) to transfer its engagements to another building society, or

• (c) to undertake to fulfil the engagements of another building society,

shall, unless the appropriate authority , in the case of a society desirous of undertaking to fulfil another’s engagements, has consented under section 94(5) to its proceeding by resolution of the board of directors, send to every member entitled to notice of a meeting of the society a statement concerning the matters specified in sub-paragraph (4) below.

• (2) A building society shall include the statement referred to in sub-paragraph (1) above in or with the notice to be sent to its members of the meeting of the society at which the resolutions require for the approval of the amalgamation or, as the case may be, the transfer are to be moved.

• (2A) Where a statement is required to be sent to a member in or with the notice of the meeting under sub-paragraph (2)—

• (a) in a case where notice of the meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the statement may be sent to him electronically only if it is sent to the same electronic address, and at the same time, as the notice;

• (b) in a case where notice of the meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

• (2B) The conditions of this sub-paragraph are satisfied in the case of a statement if—

• (a) the society and that 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) at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—

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

• (ii) the address of that web site,

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

• (d) the statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the appropriate authority whether to confirm the amalgamation or transfer of engagements pursuant to section 95.

• (2C) Where, in a case in which sub-paragraph (2A)(b) above is relied on for compliance with a requirement under sub-paragraph (2)—

• (a) a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(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,

that failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 95(4)(c).

• (3) No statement shall be sent unless its contents, so far as they concern the matters specified in sub-paragraph (4) below, have been approved by the appropriate authority .

• (4) Those maters are the following, namely—

• (a) the financial position of the building society and that of the other building society or societies participating in the amalgamation or transfer;

• (b) the interest of the directors of the building society in the amalgamation or transfer of engagements;

• (c) the compensation or other consideration (if any) proposed to be paid to or in respect of the directors or other officers of the building society and of the other building society or societies participating in the amalgamation or transfer;

• (d) the payments (if any) to be made to members of the building society and of the other building society or societies participating in the amalgamation or transfer by way of a distribution of funds in consideration of the amalgamation or transfer;

• (e) the changes (if any) to be made, in connection with the amalgamation or transfer of engagements, in the terms governing outstanding loans made by the building society which are secured on land;

• (f) any other matter which the appropriate authority requires in the case of the particular amalgamation or transfer of engagements.

• (4A) The PRA must consult the FCA before approving a statement under sub-paragraph (3).

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

• (6) Any expression used in this paragraph and in section 96 has the same meaning in this paragraph as in that section.

Part II — Notification of Proposals for Merger

Preliminary

2

In this Part of this Schedule—

• “merger” means an amalgamation of building societies under section 93 or a transfer of all the engagements of one building society to another under section 94; and “merger” has a corresponding meaning;

• “merger proposal”, in relation to a building society, means a proposal in writing, by another building society desiring to merge with it, for the societies to merge, with or without terms for the merger; and “proposer” has a corresponding meaning;

• “merger resolutions”, in relation to a building society, means the resolutions required for the approval of a merger of the society with another building society under section 93(2) or 94(2);

• “merger statement” means a statement containing the requisite particulars of a merger proposal; and

• “requisite particulars”, in relation to a merger proposal, means the particulars required by paragraph 3(2) below to be given in a merger statement.

Duty to notify members

3

• (1) Subject to sub-paragraph (3) below, it shall be the duty of a building society receiving a merger proposal to send, in accordance with this Part of this Schedule, a merger statement in respect of the proposal to every member entitled to notice of a meeting of the society.

• (2) A merger statement must contain the following particulars—

• (a) the fact that a merger proposal has been made, and

• (b) the identity of the proposer,

with or without other particulars regarding the proposal.

• (3) Sub-paragraph (1) above does not require a merger statement to be sent to members if the proposer has requested in writing that the requisite particulars are to be treated as confidential; and, where such a request is made and is at a later date withdrawn in writing, the society receiving the proposal shall, for the purposes of this Part of this Schedule, treat the proposal as having been received on that date instead of any earlier date.

4

• (1) A building society shall include in or with every notice of its annual general meeting a merger statement with respect to any merger proposal, other than a proposal of which notice has already been given under this paragraph,—

• (a) received by it during the period of 12 months ending with the ninth month of the last financial year of the society before that meeting; or

• (b) treated by paragraph 3(3) above as having been received by it during the last three months of that financial year;

and the society may also include, under this sub-paragraph, a merger statement with respect to any proposal received, or treated as received, by it after the end of either period.

• (2) In any case where merger resolutions are to be moved at any meeting of a building society, every notice of the meeting shall have included in or with it—

• (a) a merger statement with respect to any merger proposal, other than a proposal of which notice has already been given under this paragraph, received by it more than 42 days before the date of the meeting; and

• (b) a transfer proposal notification with respect to any transfer proposal so received by it.

• (2A) Where a merger statement or a transfer proposal notification is required to be sent to a person in or with the notice of a meeting of the society under sub-paragraph (1) or (2)—

• (a) in a case where notice of a meeting is given electronically to a person in accordance with paragraph 22A of Schedule 2, the merger statement or transfer proposal notification may be sent to him electronically only if it is sent to the same electronic address and at the same time as the notice;

• (b) in a case where notice of a meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send the statement or notification shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

• (2B) The conditions of this sub-paragraph are satisfied in the case of a merger statement or transfer proposal notification if—

• (a) the society and that person 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 merger statement or transfer proposal notification in question;

• (c) at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—

• (i) the publication of the merger statement or transfer proposal notification on a web site,

• (ii) the address of that web site,

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

• (d) the statement or notification is published continuously on that web site throughout the period beginning when the person is notified in accordance with paragraph (c) and ending with the conclusion of the meeting.

• (2C) Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (1) or (2)—

• (a) a statement or notification is published for a part, but not all, of the period mentioned in sub-paragraph (2B)(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,

that failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 95(4)(c).

• (3) In this paragraph and paragraph 5 below—

• “transfer proposal” has the same meaning as in Part IA of Schedule 17;

• “transfer proposal notification” means a transfer proposal notification (within the meaning of that Part) required to be sent to members by paragraph 5B(1) of that Schedule.

Duty to notify appropriate authority

5

• (1) Where a building society sends a merger statement or transfer proposal notification to its members under paragraph 4 above in connection with a meeting of the society, it shall send a copy of the statement or notification to the FCA and, if the society is a PRA-authorised person, the PRA at least 14 days before the date of the meeting.

• (2) The FCA must keep the copy of a merger statement or transfer proposal notification received by it from a building society in the public file of that society.

Penalty

6

• (1) If default is made by a building society in complying with paragraph 4(1), 4(2) or 5 above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and so shall any officer who is also guilty of the offence.

• (2) Where, in a case in which paragraph 4(2A)(b) is relied on for compliance with a requirement under paragraph (a) or (b) of paragraph 4(2)—

• (a) a merger statement or transfer proposal notification is published for a part, but not all, of the period mentioned in sub-paragraph (2B)(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 this paragraph by reason of that failure.

Part III — Confirmation by appropriate authority : Procedure

7

An application for confirmation by the appropriate authority of an amalgamation or transfer of engagements shall be made in such manner as the appropriate authority may direct.

8

• (1) Where a building society applies to the appropriate authority for confirmation of an amalgamation or transfer or engagements, the society shall publish notice of the application in any one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the appropriate authority directs and, if it so directs, in one or more newspapers.

• (2) A notice published in pursuance of sub-paragraph (1) above shall—

• (a) state that any interested party has the right to make representations to the appropriate authority with respect to the application; and

• (b) specify a date determined by the appropriate authority before which any written representations or notice of a person’s intention to make oral representations must be received by the Commission; and

• (c) specify a date determined by the appropriate authority as the day on which it intends to hear any oral representations.

9

• (1) After the date specified in pursuance of paragraph 8(2)(b) above, the appropriate authority shall—

• (a) determine the time and place at which oral representations may be made;

• (b) give notice of that determination to the building societies participating in the amalgamation or transfer and any persons who have given notice of their intention to make oral representations; and

• (c) send copies of the written representations received by the appropriate authority to the building societies participating in the amalgamation or transfer.

• (2) The appropriate authority shall allow any building society participating in the amalgamation or transfer an opportunity to comment on the written representations, whether at a hearing or in writing before the expiration of such period as the appropriate authority specifies in a notice to the society.

SCHEDULE 17

PART I — Issue of statement or summary to members

Preliminary

1

In this Part of this Schedule—

• “prescribed matters” in relation to any transfer of the business of a building society to its successor, means the matters relating to the transfer, the society, its officers, members or depositors, or the successor, which are prescribed in regulations made under paragraph 5(1) below;

• “transfer statement”, in relation to a transfer of business by a building society, means the statement with respect to the transfer which may be sent or handed to members of the society under paragraph 2 below;

• “transfer summary”, in relation to a transfer of business by a building society, means the summary of the transfer statement which may be sent to members of the society under that paragraph.

Duty to send transfer statements to members

2

A building society which desires to transfer its business shall, in accordance with this Part of this Schedule, send a transfer statement, or a transfer summary, to every member entitled to notice of a meeting of the society.

3

• (1) A transfer statement, in relation to a transfer of business by a building society, shall contain—

• (a) the particulars required, in relation to the prescribed matters, by the regulations made under paragraph 5(1) below, and

• (b) particulars of any other matters required by the appropriate authority in the case of the particular transfer,

with or without other particulars regarding the transfer.

• (2) A transfer summary, in relation to a transfer of business by a building society, shall contain—

• (a) the information required by the regulations made under paragraph 5(2) below, and

• (b) any other information required by the appropriate authority in the case of the particular transfer,

with or without other particulars regarding the transfer.

4

• (1) Subject to sub-paragraph (3) below, a building society shall, in relation to a transfer of business, include a transfer statement, or a transfer summary, in or with the notice to be sent to its members of the meeting of the society at which the requisite transfer resolutions are to be moved.

• (1A) Where a transfer statement or transfer summary is required under sub-paragraph (1) to be sent to a member in or with the notice of the meeting of the society at which the requisite transfer resolutions are to be moved—

• (a) in a case where notice of that meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the transfer statement or transfer summary may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice;

• (b) in a case where notice of that meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send the statement or summary to that member shall also be treated as satisfied if the conditions set out in sub-paragraph (1B) are satisfied.

• (1B) The conditions of this sub-paragraph are satisfied in the case of a transfer statement or transfer summary if—

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

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

• (c) at the same time and in the same manner as the society notifies that member of the publication of the notice of the meeting, it notifies him of—

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

• (ii) the address of that web site,

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

• (d) the statement or summary is published continuously on that web site throughout the period beginning when the member is notified in accordance with paragraph (a) and ending with the decision of the appropriate authority whether to confirm the transfer pursuant to section 98.

• (1C) Where, in a case in which sub-paragraph (1A)(b) is relied on for compliance with a requirement under sub-paragraph (1)—

• (a) a statement is published for a part, but not all, of the period mentioned in subparagraph (1B)(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,

the failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (1B) from being treated as fulfilled in relation to section 98.

• (2) Subject to sub-paragraph (3) below, where a building society sends a transfer summary, a transfer statement—

• (a) shall be handed forthwith and free of charge to any member to whom the summary was sent who asks for such a statement at an office or branch of the society; and

• (b) shall be sent forthwith and free of charge to any such member who asks for such a statement otherwise than at such an office or branch.

• (2A) Where a transfer statement is required to be sent to a member under sub-paragraph (2)(b)—

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

• (b) the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.

• (2B) The conditions of this sub-paragraph are satisfied in the case of a transfer statement if—

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

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

• (c) the society notifies the member forthwith, on receiving a request from him for such a statement, of—

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

• (ii) the address of that web site,

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

• (d) that statement is published continuously on that web site for the period beginning with the giving of that notification and ending with the decision of the appropriate authority whether to confirm the transfer pursuant to section 98.

• (2C) Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2)(b)—

• (a) a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(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,

the failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 98.

• (3) No transfer statement shall be sent or handed to a member unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under paragraph 3(1)(b) above, have been approved by the appropriate authority .

• (4) The PRA must consult the FCA before approving a statement under sub-paragraph (3).

5

• (1) The Treasury, may make regulations for the purpose of specifying, as prescribed matters, the matters of which transfer statements are to give particulars; and the regulations may also require particulars to be given of any alternatives to the particular transfer which were available to the society making the transfer.

• (2) The Treasury, may make regulations for the purpose of specifying the information which transfer summaries are to give.

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

Part II — Confirmation by appropriate authority : Procedure

6

An application by a building society for confirmation by the appropriate authority of a transfer of its business tschedule 16o a company shall be made in such manner as the appropriate authority may direct.

7

• (1) Where a building society applies for confirmation of a transfer of its business, the society shall publish a notice of the application in any one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the appropriate authority directs and, if it so directs, in one or more newspapers.

• (2) A notice published in pursuance of sub-paragraph (1) above shall—

• (a) state that any interested party has the right to make representations to the appropriate authority with respect to the application;

• (b) specify a date determined by the appropriate authority before which any written representations or notice of a person’s intention to make oral representations must be received by the appropriate authority; and

• (c) specify a date determined by the appropriate authority as the day on which it intends to hear any oral representations.

8

• (1) After the date specified in the notice in pursuance of paragraph 7(2)(b) above, the Commission shall—

• (a) determine the time and place at which oral representations may be made;

• (b) give notice of that determination to the building society making the transfer and any persons who have given notice of their intention to make oral representations; and

• (c) send copies of the written representations received by the Commission to the building society making the transfer.

• (2) The Commission shall allow the building society making the transfer an opportunity to comment on the written representations, whether at a hearing or in writing, before the expiration of such period as the Commission specifies in a notice to the society.

SCHEDULE 18

Part I — United Kingdom

Bankers’ Books Evidence Act 1879 (c.11)

1

In section 9(1) of the Bankers’ Books Evidence Act 1879 (meaning of “bank” and “banker” for purposes of that Act), after paragraph (a) there shall be inserted the following—

(aa) a building society (within the meaning of the Building Societies Act 1986);

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Land Registration Act 1925 (c.21)

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Payment of Wages Act 1960 (c.37)

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Trustee Investments Act 1961 (c.62)

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• (1) This paragraph amends the Trustee Investments Act 1961 as follows.

• (2) In Part II of Schedule 1 (narrower range investments requiring advice), for paragraph 12 there shall be substituted—

(12) In deposits with a building society within the meaning of the Building Societies Act 1986.

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• (3) In Part III of Schedule 1 (wider range investments), for paragraph 2 there shall be substituted—

(2) In shares in a building society within the meaning of the Building Societies Act 1986.

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Stock Transfer Act 1963 (c.18)

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In section 1(4) of the Stock Transfer Act 1963 (simplified transfer of certain securities, not to apply to building society securities), for “1962” there shall be substituted “ 1986 ”.

Industrial and Provident Societies Act 1965 (c.12)

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Income and Corporation Taxes Act 1970 (c.10)

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Banking and Financial Dealings Act 1971 (c.80)

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• (1) This paragraph amends the Banking and Financial Dealings Act 1971 as follows.

• (2) In section 2(1) (power to suspend financial dealings on bank holidays) after paragraph (g) there shall be inserted—

; and (h) a direction that, subject as aforesaid, no building society shall, on that day, except with permission so granted, effect in the course of its business any transaction or, according as may be specified in the order, a transaction of such kind as may be so specified.

• (3) In section 2(6) after the definition of “authorised dealer in gold” there shall be inserted—

“building society” means a building society within the meaning of the Building Societies Act 1986.

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Local Government Act 1972 (c.70)

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In Schedule 12A (access to information: exempt information) to the Local Government Act 1972—

• (a) in Part II, in paragraph 2(d) for “1962” there shall be substituted “ 1986 ”; and

• (b) in Part III, in paragraph 1(1), after the definition of "protected informant’ there shall be inserted the following definition—

• “registered”, in relation to information required to be registered under the Building Societies Act 1986, means recorded in the public file of any building society (within the meaning of that Act);

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Consumer Credit Act 1974 (c.39)

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• (1) This paragraph amends the Consumer Credit Act 1974 as follows.

• (2) In section 16(1) (consumer credit agreement with certain bodies exempt from regulation) the words “or building society” shall be omitted and, after paragraph (f), there shall be inserted the words

, or (g) a building society.

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• (3) In section 16(3) (Secretary of State’s duty to consult before making orders), after paragraph (d) there shall be inserted the words

or (e) under subsection (1)(g) without consulting the Building Societies Commission and the Treasury.

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• (4) In section 189(1) (definitions), for the definition of “building society” there shall be substituted the following definition—

“building society” means a building society within the meaning of the Building Societies Act 1986;

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Solicitors Act 1974 (c.47)

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• (1) This paragraph amends the Solicitors Act 1974 as follows.

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

• (3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

• (4) In section 85 (bank accounts)—

• (a) after “account with a bank” there shall be inserted “ or a building society ”, and

• (b) in paragraphs (a) and (b) after “bank” there shall be inserted “ or society ”.

• (5) In section 87(1) (interpretation), after the definition of “bank” there shall be inserted—

“building society” means a building society within the meaning of the Building Societies Act 1986; and a reference to an account with a building society is a reference to a deposit account.

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Home Purchase Assistance and Housing Corporation Guarantee Act 1978 (c.27)

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In section 3(1) (building society law) of the Home Purchase Assistance and Housing Corporation Guarantee Act 1978, after “determining” there shall be added the word “ (a) ” and at the end of that subsection there shall be added the words—

(b) the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.

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Banking Act 1979 (c.37)

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Charging Orders Act 1979 (c.53)

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In section 6(1) (interpretation) of the Charging Orders Act 1979, in the definition of “building society”, for “1962” there shall be substituted “ 1986 ”.

Finance Act 1982 (c.39)

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Companies Act 1985 (c.6)

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Insolvency Act 1985 (c.65)

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Housing Act 1985 (c.68)

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• (1) This paragraph amends the Housing Act 1985 as follows.

• (2) In section 442(5) (consultations by Secretary of State regarding forms of local authority indemnity agreement) for “Chief Registrar of Friendly Societies" in paragraph (a), there shall be substituted “Building Societies Commission".

• (3) In section 447 (recognised lending institutions) and in section 448 (recognised savings institutions) for “designated building societies" there shall be substituted “building societies".

• (4) For section 450 (modifications of building society law) there shall be substituted the following section—

(450) So much of an advance by a building society which is partly financed under section 445 (assistance for first-time buyers) or the corresponding Scottish or Northern Ireland provisions as is so financed shall be treated as not forming part of the advance for the purpose of determining— (a) whether the advance, or any further advance made within two years of the date of purchase, is beyond the powers of the society, and (b) the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.

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• (5) In section 622 (minor definitions) for the definition of “building society" there shall be substituted—

“building society” means a building society within the meaning of the Building Societies Act 1986

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Housing Associations Act 1985 (c. 69)

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• (1) This paragraph amends the Housing Associations Act 1985 as follows.

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

• (3) In section 84(5) and 86(4) (consultation by Secretary of State regarding building society indemnities) for “Chief Registrar of Friendly Societies” there shall be substituted “ Building Societies Commission ”.

• (4) In section 101 (minor definitions), for the definition of “building society” there shall be substituted—

“building society” means a building society within the meaning of the Building Societies Act 1986;

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Part II — Northern Ireland

Industrial and Provident Societies Act (Northern Ireland) 1969 (c.24 N.I.)

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In section 31(b) of the Industrial and Provident Societies Act (Northern Ireland) 1969 (authorised investments) for “society registered under the Building Societies Act” there shall be substituted “ building society within the meaning of the Building Societies Act 1986. ”.

Payment of Wages Act (Northern Ireland 1970

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Private Streets (Northern Ireland) Order 1980 (S.I. 1980/1086 (N.I.12))

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In Article 33 (security not to be deemed prior mortgage under Building Societies Acts) of the Private Streets (Northern Ireland) Order 1980 for the words from “section 32” where they first occur onwards there shall be substituted “ section 11(2)(d) or (4)(d) of the Building Societies Act 1986 ”.

Housing (Northern Ireland) Order 1981 (S.I. 1981/156 (N.I.3))

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• (1) This paragraph amends the Housing (Northern Ireland) Order 1981 as follows.

• (2) In Article 2(2) (interpretation) after the definition of “building regulations” there shall be inserted—

“building society” means a building society within the meaning of the Building Societies Act 1986

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• (3) For Article 155 (building society law) there shall be substituted the following section—

(155) So much of an advance by a building society which is partly financed under this Part or sections 445 to 449 of the Housing Act 1985 or the Home Purchase Assistance and Housing Corporation Guarantee Act 1978 as is so financed shall be treated as not forming part of the advance for the purpose of determining— (a) whether the advance, or any further advance made within two years of the date of purchase, is beyond the powers of the society, and (b) the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.

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• (4) In Article 155A (exclusion of Restrictive Trade Practices Act 1976), after “Scottish Provisions” there shall be inserted “ (namely, sections 445 to 447 of the Housing Act 1985 or the Home Purchase Assistance and Housing Corporation Guarantee Act 1978) ”.

• (5) In Article 156(5)(b) (consultations by the Department regarding forms of indemnity agreements) for “Registrar of Friendly Societies for Northern Ireland” there shall be substituted “ Building Societies Commission ”.

• (6) For paragraph 1 of Schedule 10 there shall be substituted—

(1) Building Societies.

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Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983 (S.I.1983/766 (N.I.9))

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In Article 3(10) of the Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983, after “applies” in the definition of “mortgage” there shall be inserted “ and, subject to paragraph 2(7) of Schedule 4 to the Building Societies Act 1986, does not include a mortgage to which that paragraph 2 applies. ”.

Housing (Northern Ireland) Order 1983 (S.I. 1983/1118 (N.I. 15))

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In Article 3(4) of the Housing (Northern Ireland) Order 1983, in the definition of “building society” for the words from “1962” onwards there shall be substituted “ 1986 ”.

Companies (Northern Ireland) Order 1986

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SCHEDULE 19

Part I — Repeals: General

Part II — Revocation Extending to Great Britain

PART III — Repeals and Revocations Extending Only to Northern Ireland

SCHEDULE 20

Preliminary

1

In this Schedule—

• “the commencement date for” any provision of this Act means the date on which that provision comes into operation;

• “existing society” means a building society registered at the passing of this Act under the repealed enactments; and

• “existing rules” means the rules of a society in force immediately before the commencement date for section 5.