Building Societies Act 1986

• (b) the name of the person from whom it was made and, where that person is or was connected with a director of the building society, the name of that director;

• (c) in the case of a loan or any related guarantee—

• (i) the amount of the mortgage debt or corresponding liability both at the beginning and at the end of the financial year;

• (ii) the maximum amount of that debt or liability during that year;

• (iii) the amount of any interest which, having fallen due, has not been paid; and

• (iv) the amount of any provision made in the accounts in respect of any failure or anticipated failure by the borrower to repay the whole or part of the loan or to pay the whole or part of any interest on it;

• (d) in the case of a disposal of property by way of lease or hire—

• (i) the value of the property;

• (ii) the amount of any rental which, having fallen due, has not been paid; and

• (iii) the amount of any provision made in the accounts in respect of any failure or anticipated failure by the lessee or hirer to pay the whole or part of the rent;

• (e) in the case of any payment made on behalf of the director or person connected with him, the amount of the payment; and

• (f) in the case of a guarantee or security—

• (i) the amount for which the building society was liable under the guarantee or security both at the beginning and at the end of the financial year;

• (ii) the maximum amount for which the society may become liable; and

• (iii) any amount paid and any liability incurred by the society for the purposes of fulfilling the guarantee or security (including any loss incurred by reason of its enforcement).

SCHEDULE 10

Part I — Requisite Particulars Where no Adoption of Part II

Conveyancers

1

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

• (a) the number of cases in which it has provided conveyancing services in respect of a loan secured on land and the purchase of the land both to the society and to the borrower;

• (b) the number of cases in which it has provided the society (but not the borrower) with conveyancing services in respect of a loan secured on land;

• (c) the aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of conveyancing services falling within sub-paragraphs (a) and (b) above;

• (d) the aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

• (e) the aggregate amount of any fees paid to it by the society in consideration of the provision of conveyancing services in respect of any land held by the society under section 6, 10, 17 or 19;

• (f) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Valuers and surveyors

2

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

• (a) the number of cases in which it has, in respect of any land which is to secure a loan, surveyed the land or provided a valuation of it on behalf of the society or the borrower or both;

• (b) the number of cases in which it has, on behalf of the society (but not the borrower), surveyed any land which is to secure a loan or provided the society with a valuation of it;

• (c) the aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of the services falling within sub-paragraphs (a) and (b) above;

• (d) the aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

• (e) the aggregate amount of any fees paid to it by the society in consideration of the provision of surveying or valuing services in respect of any property held by the society under section 6, 10, 17 or 19;

• (f) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Accountants

3

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

• (a) the aggregate amount of the fees paid to it by the society for the provision of accountancy services; and

• (b) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Insurance agents, etc.

4

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

• (a) the aggregate of the amounts paid to it by the society or by way of commission by insurers in respect of relevant insurance effected by the society or by borrowers in compliance with the terms on which loans secured on land are made by the society; and

• (b) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Part II — Requisite Particulars on Adoption of This Part

Conveyancers

5

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

• (a) the prescribed band within which falls the estimated number of cases in which it has provided conveyancing services in respect of a loan secured on land and the purchase of the land both to the society and to the borrower;

• (b) the prescribed band within which falls the estimated number of cases in which it has provided the society (but not the borrower) with conveyancing services in respect of a loan secured on land;

• (c) the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of conveyancing services falling within sub-paragraphs (a) and (b) above;

• (d) the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

• (e) the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of conveyancing services in respect of any land held by the society under section 6, 10, 17 or 19;

• (f) the prescribed band within which falls the estimated aggregate of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Valuers and surveyors

6

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

• (a) the prescribed band within which falls the estimated number of cases in which it has, in respect of any land which is to secure a loan, surveyed the land or provided a valuation of it on behalf of the society or the borrower or both;

• (b) the prescribed band within which falls the estimated number of cases in which it has, on behalf of the society (but not the borrower), surveyed any land which is to secure an advance or provided the society with a valuation of it;

• (c) the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of the services falling within sub-paragraphs (a) and (b) above;

• (d) the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

• (e) the prescribed band within which falls the estimated aggregate of any fees paid to it by the society in consideration of the provision of surveying or valuing services in respect of any property held by the society under section 6, 10, 17 or 19;

• (f) the prescribed band within which falls the estimated aggregate amounts of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Accountants

7

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

• (a) the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society for the provision of accountancy services; and

• (b) the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Insurance agents, etc.

8

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

• (a) the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society or by way of commission by insurers in respect of relevant insurance effected by the society or by borrowers in compliance with the terms on which loans secured on land are made by the society; and

• (b) the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Part III — Supplementary

Power to prescribe bands for Part II particular

9

• (1) The Treasury may by order prescribe, for the purposes of the provisions of Part II of this Schedule,—

• (a) series of numbers by reference to limits specified in the order, or

• (b) series of monetary amounts by reference to limits so specified;

and, in any provision of Part II, “prescribed band” means, in relation to cases, any series of numbers so prescribed for the purposes of that provision and, in relation to monetary amounts, any series of monetary amounts so prescribed for the purposes of that provision.

• (2) The power conferred by this paragraph includes power to prescribe different series of numbers or of monetary amounts for the purposes of different provisions.

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

Interpretation

10

• (1) In this Schedule—

• “administrative services” means services falling within section 69(4);

• “business associate” and “associated”, in relation to a building society, have the same meaning as in section 69;

• “financial year” means a financial year of the society with which the business associate is associated;

• “prescribed band” has the meaning given by paragraph 9(1) above; and

• “relevant insurance” means insurance falling within section 69(3)(d).

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

• (a) in the case of a paragraph of Part I, the aggregate of all the fees and commissions which are the subject of the requisite particulars under that paragraph; and

• (b) in the case of a paragraph of Part II, the aggregate of the amounts which are specified in orders under paragraph 9 above as the upper limits of the prescribed bands within which fall the estimated aggregates of the fees or commissions or other amounts received which are the subject of the requisite particulars under the provisions of that paragraph

SCHEDULE 11

Appointment

1

• (1) The first auditor of a building society may be appointed by the directors at any time before the first general meeting of the building society following the end of the society’s first financial year and an auditor so appointed shall hold office until the conclusion of that meeting.

• (2) If the directors fail to exercise their powers under sub-paragraph (1) above those powers may be exercised by the building society in general meeting.

2

The directors, or the building society in general meeting, may fill any casual vacancy in the office of auditor; but while any such vacancy continues, the surviving or continuing auditor or auditors (if any) may act.

3

• (1) If at any annual general meeting of a building society no auditor is appointed or re-appointed, the appropriate authority may appoint a person to fill the vacancy; and the society shall, within one week of the power of the appropriate authority becoming exercisable, give notice to the FCA and, if the society is a PRA-authorised person, to the PRA of that fact.

• (2) If a building society fails to give the notice required by sub-paragraph (1) 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 continuesX;

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

4

• (1) A resolution at a general meeting of a building society—

• (a) appointing as auditor a person other than a retiring auditor; or

• (b) filling a casual vacancy in the office of auditor; or

• (c) reappointing as auditor a retiring auditor who was appointed by the directors to fill a casual vacancy; or

• (d) removing an auditor before the expiration of his term of office,

shall not be effective unless notice of the intention to move it has been given to the society not less than twenty-eight days before the meeting at which it is moved.

• (2) A building society shall give to its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting, or, if that is not practicable, shall give them notice of the resolution, not less than twenty-one days before the meeting, either by advertisement in a newspaper having an appropriate circulation or in any other way allowed by the rules of the society.

• (3) On receipt of notice of such an intended resolution as is mentioned above the society shall forthwith send a copy of it—

• (a) to the person proposed to be appointed or removed, as the cae may be;

• (b) in a case within sub-paragraph (1)(a), to the retiring auditor; and

• (c) where, in a case within sub-paragraph (1)(b) or (c), the casual vacancy was caused by the resignation of an auditor, to the auditor who resigned.

• (4) Where notice is given of such a resolution as is mentioned in sub-paragraphs (1)(a) or (d) and the retiring auditor, or (as the case may be) the auditor proposed to be removed, makes with respect to the intended resolution representations, in writing to the society (not exceeding a reasonable length) and requests their notification to the members, the society shall (unless the representations are received by it too late to do so)—

• (a) in any notice of the resolution given to members, state the fact of the representations having been made, and

• (b) send a copy of the representations to every member to whom notice of the meeting is or has been sent.

• (5) if a copy of such representations is not sent out as required by sub-paragraph (4) above because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.

• (6) The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of any representations made to it under sub-paragraph (4) above, apply in accordance with sub-paragraph (7) or (8) below to—

• (a) the High Court, or

• (b) the appropriate authority ,

for an order that copies of the representations need not or, as the case may be, shall not be sent out nor the representations read out at the meeting.

• (7) An application under this sub-paragraph is an application to the High Court on the ground that the auditor is abusing the rights conferred by sub-paragraph (4) above to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is so abusing those rights it may by order direct that copies of the representations need not be sent out nor the representations read out at the meeting; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor notwithstanding that he is not a party to the application.

• (8) An application under this sub-paragraph is an application to the appropriate authority on the ground that the sending out of copies of or the reading out at the meeting of the representations would be likely to diminish substantially the confidence in the society of investing members of the public and if the appropriate authority is satisfied that the sending out of copies of the representations or the reading of them would have that effect it shall by order direct that copies of the representations shall not be sent out nor the representations read at the meeting.

• (9) The building society shall—

• (a) if the High Court makes an order under sub-paragraph (7) above or the appropriate authority makes an order under sub-paragraph (8) above, send within fourteen days of the decision a statement setting out the effect of the order to the persons mentioned in sub-paragraph (4)(b) above; and

• (b) if not, either send a copy of the written representations made under sub-paragraph (4) above to those persons or cause the representations to be read out at the meeting.

• (9A) Sub-paragraphs (9B) and (9C) apply where—

• (a) a copy of representations is required to be sent under sub-paragraph (4)(b) or (9)(b); or

• (b) a statement is required to be sent under sub-paragraph (9)(a).

• (9B) Where a copy of representations or a statement is required to be sent to a member—

• (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 sub-paragraph (9C) are satisfied.

• (9C) The conditions of this sub-paragraph are satisfied in the case of a copy of representations or 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 representations or statement in question;

• (c) the member is notified... of—

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

• (ii) the address of that web site,

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

and where the notification concerns the publication of a statement required to be sent by sub-paragraph (9)(a), the member is notified within the period specified in that paragraph; and

• (d) the copy of the representations or the statement is published continuously on that web site throughout the period beginning with the date on which notification is given in accordance with paragraph (c) and ending with the conclusion of the meeting.

• (10) If default is made in complying with sub-paragraph (4) or (9) above the building society shall be liable—

• (a) on conviction on indictment to a fine; or

• (b) on summary confiction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding one tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues;

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

• (10A) Where, in a case in which sub-paragraph (9A)(b) is relied on for compliance with a requirement of sub-paragraph (4) or (9)—

• (a) a copy of representations or a statement is published on a web site for a part, but not all, of the period mentioned in sub-paragraph (9C)(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 sub-paragraph (10) by reason of that failure.

Qualification and disqualification of auditors

5

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

Removal of auditors

6

• (1) A building society may by resolution in general meeting remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him.

• (2) Where a resolution removing an auditor is passed at a general meeting of a building society, the society shall within 14 days give notice of that fact to the FCA and, if the society is a PRA-authorised person, the PRA .

• (3) If a building society fails to give the notice required by s ub-paragraph (2) above the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and, 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 every officer who is also guilty of the offence.

• (4) Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages that may be payable to him in respect of the termination of his appointment as auditor.

• (5) An auditor may not be removed from office before the expiration of that auditor's term of office except—

• (a) by resolution under this paragraph, or

• (b) in accordance with paragraph 6ZA.

Resignation of auditors

7

• (1) An auditor of a building society may resign his office by depositing a notice to that effect at the principal office of the society; and any such notice operates to bring his term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.

• (2) An auditor’s notice of resignation shall not be effective unless it contains either—

• (a) a statement to the effect that there are no circumstances connected with his resignation which he considers should be brought to the notice of the members of, or depositors with, the society, or

• (b) a statement of any such circumstances as are mentioned above.

• (3) Where a notice under this paragraph is deposited at the principal office of a building society it shall within fourteen days send a copy of that notice—

• (a) to the FCA and, if the society is a PRA-authorised person, the PRA , and

• (b) if the notice contains a statement under sub-paragraph (2)(b) above, to every person who under section 76(8) is entitled to receive a copy of the summary financial statement.

• (4) The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of a notice containing a statement under sub-paragraph (2)(b), apply in accordance with sub-paragraph (5) or (6) below to—

• (a) the High Court; or

• (b) the appropriate authority ,

for an order that copies of the notice need not or, as the case may be, shall not be sent out.

• (5) An application under this sub-paragraph is an application to the High Court on the ground that the auditor is using the notice to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is using the notice for that purpose it may by order direct that copies of it need not be sent out; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

• (6) An application under this sub-paragraph is an application to the appropriate authority on the ground that the sending out of the notice would be likely to diminish substantially the confidence in the society of investing members of the public; and if the appropriate authority is satisfied that the sending out of the notice would be likely to have that effect it shall by order direct that copies of it shall not be sent out.

• (7) The building society shall, within fourteen days of the decision of the High Court or of the appropriate authority , send to the persons mentioned in sub-paragraph (3)—

• (a) if the court makes an order under sub-paragraph (5) above or the appropriate authority makes an order under sub-paragraph (6), a statement setting out the effect of the order; and

• (b) if not, a copy of the notice containing the statement under sub-paragraph (2)(b).

• (7A) Sub-paragraphs (7B) and (7C) apply where—

• (a) the reference to a notice containing a statement under sub-paragraph (2)(b) is required to be sent to a person under sub-paragraph (3)(b) or sub-paragraph (7)(b); or

• (b) a statement is required to be sent under sub-paragraph (7)(a).

• (7B) Where a notice or a statement is required to be sent to a person, the notice or statement may be sent to him electronically only if—

• (a) in a case where a person mentioned in sub-paragraph (3)(b) has notified the society of an electronic address for the purpose of this paragraph, it is sent to that address; or

• (b) in a case where no electronic address has been notified for the purpose of this paragraph, it is sent to an electronic address notified by him for the purpose of subsection (8B) of section 76 (electronic address for the reception of summary financial statement for members and depositors).

• (7C) The requirement to send a notice or a statement shall also be treated as satisfied if—

• (a) the society and a person mentioned in sub-paragraph (3)(b) 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 notice or statement in question;

• (c) the person is notified of—

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

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

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

• (d) the notice or statement is published on the web site throughout a period of at least 14 days, beginning with the day on which the person is notified in accordance with paragraph (c).

• (8) If default is made in complying with sub-paragraph (3) or sub-paragraph (7) the building society shall be liable—

• (a) on conviction on indictment to a fine; or

• (b) on summary conviction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding one tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues;

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

• (8A) Where, in a case in which sub-paragraph (7C) is relied on for compliance with a requirement under sub-paragraph (3) or (7)—

• (a) a notice or a statement is published for a part, but not all, of the period mentioned in sub-paragraph (7C)(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 sub-paragraph (8) by reason of that failure.

8

• (1) Where an auditor’s notice of resignation contains a statement under paragraph 7(2)(b) above he may also deposit at the principal office of the society a requisition signed by him calling on the directors of the society forthwith duly to convene a special general meeting of the society for the purpose of receiving and considering such explanation of the circumstances connected with this resignation as he may wish to place before the meeting.

• (2) Where an auditor’s notice of resignation contains such a statement the auditor may request the society to send to its members—

• (a) before the general meeting at which his term of office would otherwise expire or expires, as the case may be; or

• (b) before any general meeting at which it is proposed to fill the vacancy caused by his resignation,

a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.

• (3) The society shall in that case (unless the statement is received by it too late for it to comply)—

• (a) in any notice of the meeting given to members state the fact of the statement having been made, and

• (b) send a copy of the statement to every member to whom notice of the meeting is or has been sent.

• (3A) Where a copy of a statement is required to be sent to a member under sub-paragraph (3)(b)—

• (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 sub-paragraph (3B) are satisfied.

• (3B) The conditions of this sub-paragraph are satisfied in the case of a copy of a statement if—

• (a) the society and the 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 in question;

• (c) that 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 notice 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 conclusion of the meeting.

• (3C) Where, in a case in which sub-paragraph (3A)(b) is relied on for compliance with a requirement under sub-paragraph (3)(b)—

• (a) a statement is published for a part, but not all, of the period mentioned in subparagraph (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 to prevent or avoid,

that failure shall not invalidate the proceedings of the meeting.

• (4) If the directors of the society do not within 21 days from the date of the deposit of a requisition under this paragraph proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every director who failed to take all reasonable steps to secure that a meeting was so convened shall be liable—

• (a) on conviction on indictment to a fine; or

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

• (5) If a copy of the statement mentioned in sub-paragraph (2) is not sent out as required by sub-paragraph (3) because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting.

• (6) Copies of a statement need not be sent out and the statement need not be read out at the meeting if—

• (a) on an application made to the High Court by the society or a person aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; or

• (b) on an application to the PRA by the society or a person aggrieved, the PRA is satisfied that the circulating or reading out of the statement would be likely to diminish substantially the confidence in the society of investing members of the public.

• (7) If the High Court makes an order under sub-paragraph (6)(a) above it may also order the society’s costs of the application to be paid by the auditor notwithstanding that he is not a party to the application.

• (8) An auditor who has resigned his office is entitled to attend any such meeting as is mentioned in sub-paragraph (2)(a) or (b) and to receive all notices of, and other communications relating to, any such meeting which any member of the society is entitled to receive, and to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as former auditor of the society.

9

In the application of this Schedule to Scotland, references to the High Court shall be read as references to the Court of Session.

SCHEDULE 12

Part I — Matters to be Provided for in Schemes

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

Administration

1

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

2

The identity of the members.

3

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

The adjudicator

4

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

Scope of scheme

5

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

Functions of adjudicator

6

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

7

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

8

The powers of the adjudicator on the making of determinations.

Determinations and their effects

9

The extent to which determinations are binding.

10

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

Reports by investigators to administering body

11

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

Amendment or revocation of scheme

12

The manner of amending or revoking the scheme.

Accession to membership

13

Accession to membership of other societies.

Withdrawal from membership

14

Withdrawal from membership.

Part II — Requirements for Recognised Schemes:Matters of Complaint

Share accounts

1

The operation or termination of a share account and the grant or refusal to grant a shareholder other facilities normally available to shareholders of his description.

Deposit accounts

2

The operation or termination of a deposit account and the grant or refusal to grant a depositor other facilities normally available to depositors of his description.

Borrowing members: class 1 or class 2 advances

3

The operation or termination of the account of a member borrowing on a class 1 or class 2 advance and the grant or refusal to grant a borrowing member of that description other or further class 1, or as the case may be, class 2 advances secured on the same or different land or other facilities normally available to borrowing members of his description.

Borrowers: mobile home loans

4

The operation or termination of the account of a borrower under section 15 and the grant or refusal to grant a borrower under that section other facilities normally available to borrowers of his description.

Borrowers: other loans

5

The operation or termination of the account of a borrower under section 16 and the grant or refusal to grant a borrower under that section other facilities normally available to borrowers of his description.

Money transmission services

6

The terms on which are provided, the operation of, or the withdrawal of money transmission services.

Foreign exchange facilities

7

The terms on which are provided, the operation of, or the withdrawal of foreign exchange services.

Agency payments and receipts

8

The terms on which payments are made or received as agents or the operation or withdrawal of the service.

Provision of credit

9

The operation or termination of the account of a borrower with the person providing the credit.

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