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The Financial Services Act 2012 (Mutual Societies) Order 2013

Type Statutory-Instrument

Publication 2013-03-05

Last updated 2014-08-01

State In force

Department King's Printer of Acts of Parliament

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Made: 5th March 2013

Coming into force: 1st April 2013

In accordance with section 116(1) of the 2012 Act, a draft of this instrument was laid before Parliament and approved by a resolution of each House of Parliament:

Citation and commencement

1

(1) This Order may be cited as the Financial Services Act 2012 (Mutual Societies) Order 2013 and, comes into force on 1st April 2013.

Transfer of functions to the Financial Conduct Authority and the Prudential Regulation Authority

2

The following Schedules to this Order have effect—

(a) Schedule 1 (which provides for the application of FSMA 2000[^f00002] to the functions made exercisable by the FCA and the functions transferred to the PRA by Schedules 2 to 10);

(b) Schedules 2 to 10 (which amend certain enactments relating to mutual societies so as to make functions of the Financial Services Authority exercisable by that body corporate as the FCA[^f00003] and to transfer functions of the Financial Services Authority to the PRA);

(d) Schedule 12 (which makes transitional provision).

SCHEDULE 1 — Application of the Financial Services and Markets Act 2000 to transferred functions

Interpretation

1

In this Schedule—

(a) “mutuals expenditure” means expenditure of the FCA or the PRA[^f00004] incurred—

(i) in carrying out functions which are conferred by the legislation relating to mutual societies[^f00005] or are otherwise exercisable by virtue of this Order;

(ii) for any purpose incidental to or in connection with the carrying out of such functions (including expenditure incurred before 1st April 2013 in preparation for the assumption of those functions); and

(b) any reference to a section or Schedule is a reference to FSMA 2000.

General

2

(1) For the purposes of the provisions specified in sub-paragraph (2), functions transferred by this Order are to be treated as functions conferred on the FCA under a provision of FSMA 2000.

(2) The provisions are—

(a) section 1A(3) and Schedule 1ZA (which make general provision in relation to the FCA and its functions);

(b) section 1S (reviews);

(d) section 3E (memorandum of understanding);

(e) sections 3I to 3K[^f00006] (power of PRA to restrain proposed action by FCA);

(f) section 139A[^f00007] (power of the FCA to give guidance); and

(g) section 415[^f00008] (jurisdiction in civil proceedings).

3

(1) For the purposes of the provisions specified in sub-paragraph (2), functions transferred by this Order are to be treated as functions conferred on the PRA under a provision of FSMA 2000.

(2) The provisions are—

(a) section 2A(3) and Schedule 1ZB (which make general provision in relation to the PRA and its functions);

(b) sections 2B to 2I (the PRA’s general duties);

(d) sections 3D (duty of FCA and PRA to ensure co-ordinated exercise of functions);

(e) section 3E (memorandum of understanding); and

(f) sections 3I to 3K (power of PRA to restrain proposed action by FCA).

4

As it applies by virtue of paragraphs 2(2)(e) and 3(2)(f), section 3I (power of PRA to require FCA to refrain from specified action) is to be read as if—

(a) the references in subsection (2) of that section to regulatory powers were references to the functions transferred by this Order; and

(b) subsections (2)(b) and (3) of that section were omitted.

5

(1) The FCA must maintain arrangements designed to enable it to determine whether persons are complying with requirements imposed on them by or under—

(a) the legislation relating to mutual societies;

(b) the Industrial and Provident Societies Act 1975[^f00010];

Rules relating to fees

6

(1) This paragraph applies if the FCA makes, or proposes to make, rules under paragraph 23 of Schedule 1ZA (the Financial Conduct Authority: fees) which require the payment to the FCA of fees which relate in whole or in part to mutuals expenditure.

(2) In the application of paragraph 23 of Schedule 1ZA to the rules, the reference to fees and charges provided for by any other provision of FSMA 2000 includes a reference to fees and charges provided for by any provision of the legislation relating to mutual societies.

(3) To the extent that the fees relate to mutuals expenditure—

(a) section 138I(2)(d) (requirement for draft rules to be accompanied by an explanation of the FCA’s reasons for believing that making the proposed rules is compatible with section 1B(1))[^f00012] does not apply in relation to the rules; and

(b) the rules are not to be treated as a “regulating provision” within the meaning of section 140A(1)[^f00013] (interpretation of Chapter 4 of Part 9A (competition scrutiny)).

7

(1) This paragraph applies if the PRA makes, or proposes to, make rules under paragraph 31 of Schedule 1ZB (the Prudential Regulation Authority: fees) which require the payment to the PRA of fees which relate in whole or in part to mutuals expenditure.

(2) In the application of paragraph 31 of Schedule 1ZB to the rules, the reference to fees and charges provided for by any other provision of FSMA 2000 includes a reference to fees and charges provided for by any provision of the legislation relating to mutual societies.

(3) To the extent that the fees relate to mutuals expenditure, the rules are not to be treated as a “regulating provision” within the meaning of section 140A(1).

Guidance

8

Sections 139A(3) (power of FCA to give guidance) and 139B(5)[^f00014] (notification of FCA guidance to the Treasury) apply to guidance given to building societies, friendly societies and industrial and provident societies generally or to a class of such societies.

9

(1) This paragraph applies if guidance is given by the FCA under section 139A on the operation of a rule of the kind mentioned in paragraph 6 above.

(2) To the extent that the fees required to be paid by the rule relate to mutuals expenditure, the guidance is not to be treated as a “regulating provision” within the meaning of section 140A(1).

10

(1) This paragraph applies if general guidance is given by the FCA under section 139A with respect to any matter relating to functions exercisable under, or to any provision of or made under, the legislation relating to mutual societies, unless paragraph 8 above applies.

(2) The guidance is not to be treated as a “regulating provision” within the meaning of section 140A(1).

SCHEDULE 2 — Amendments of the Industrial and Provident Societies Act 1965

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SCHEDULE 3 — Amendments of the Industrial and Provident Societies Act 1967

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SCHEDULE 4 — Amendments of the Friendly and Industrial and Provident Societies Act 1968

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SCHEDULE 5 — Amendments of the Friendly Societies Act 1974

1

The Friendly Societies Act 1974[^f00071] is amended as follows.

2

(1) In the provisions listed in sub-paragraph (2)—

(a) for “Authority” substitute “FCA”; and

(b) for “Authority’s” substitute “FCA’s”.

(2) The provisions are—

(a) section 12(1) [^f00072] (establishment of new branches);

(b) section 15A(1)[^f00073] (acknowledgement of registration and rules of new branch);

(d) section 18[^f00075] (registration of amendments of rules of society or branch);

(e) section 19[^f00076] (acknowledgement of registration of amendment of rules);

(f) section 20[^f00077] (appeals from refusal to register amendment of rule);

(g) section 24[^f00078] (trustees of registered societies and branches);

(h) section 43[^f00079] (annual return);

(i) section 55(1)[^f00080] (power of the Public Trustee to hold securities of certain friendly societies and branches);

(j) section 81(1)[^f00081] (power to change name);

(k) section 82(5)[^f00082] (amalgamation and transfer of engagements);

(l) section 84(2) and (3)[^f00083] (conversion of registered societies into companies);

(m) section 84A(6)[^f00084] (conversion of registered societies into industrial and provident societies);

(n) section 85(3) and (4)[^f00085] (conversion of society into branch);

(o) section 86(3) and (4)[^f00086] (meaning and registration of special resolutions);

(p) section 91(1A), (2), (3) and (5)[^f00087] (cancellation and suspension of registration);

(q) section 94(4) and (7)[^f00088] (instrument of dissolution);

(r) section 99(6)[^f00089] (punishment of fraud, etc, and recovery of property misapplied);

(s) section 101(1) and (1A)[^f00090] (prosecution of offences, recovery of costs or expenses);

(t) section 104A[^f00091] (fees for inspection or copying of documents);

(u) section 109(1)(b) and (d)[^f00092] (regulations);

(v) section 110(1) and (3)[^f00093] (evidence and deposit of documents);

(w) section 111(3)[^f00094] (interpretation: seal); and

(x) paragraphs 7 and 15 of Schedule 2[^f00095] (matters to be provided for by the rules of societies registered under this Act).

3

In section 30A(11)[^f00096] (publication of accounts and balance sheets), for “Authority” substitute “appropriate authority”.

4

In section 32[^f00097] (audit of exempt societies and branches), for “Authority”, in each place, substitute “appropriate authority”.

5

In section 32A(4) and (5)[^f00098] (power of societies to disapply section 31 (obligation to appoint auditors)) , for “Authority”, in each place, substitute “appropriate authority”.

6

(1) Section 39C[^f00099] (power to require accounts of past years to be audited) is amended as follows.

(2) In subsection (1), for “Authority”—

(a) in the opening words of that subsection, substitute “appropriate authority”; and

(b) in paragraph (b), in each place, substitute “FCA and, if the registered society or branch is a PRA-authorised person, the PRA”.

(3) In subsection (2), for “Authority” substitute “appropriate authority”.

(4) In the heading, for “Authority’s power” substitute “Power of appropriate authority”.

7

(1) Section 41[^f00100] (valuations) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (b), for “Authority” substitute “FCA and, if the registered society or branch is a PRA-authorised person, the PRA”; and

(b) in the closing words of that subsection, for “Authority” substitute “appropriate authority”.

(3) In subsection (3)—

(a) in the opening words of that subsection, omit “to the Authority”; and

(b) in paragraph (b), for “Authority” substitute “appropriate authority”.

(4) In subsection (5), for “Authority” substitute “appropriate authority”.

(5) In subsection (6)—

(a) in the opening words of that subsection—

(i) for “Authority” substitute “appropriate authority”; and

(ii) for “Authority’s” substitute “its”; and

(b) in paragraph (b), omit “to the Authority”.

8

(1) Section 42[^f00101] (regulations and directions relating to valuations) is amended as follows.

(2) In subsection (2), for “the Authority”, in each place, substitute “the FCA and, if the registered society or branch is a PRA-authorised person, the PRA”.

(3) In subsection (4)—

(a) in the opening words of that subsection, for “Authority”, in each place, substitute “appropriate authority”; and

(b) in paragraph (b), for “Authority”, in each place, substitute “FCA and, if the registered society or branch is a PRA-authorised person, the PRA”.

(4) In subsection (5), for “Authority” substitute “appropriate authority”.

9

After section 43(6)[^f00102] (annual return) insert—

(7) If the registered society or branch is a PRA-authorised person, it shall send to the PRA a copy of the annual return sent to the FCA under subsection (1).

10

In section 65A(7)[^f00103] (group insurance business), for “Authority” substitute “FCA or the PRA”.

11

In section 76(3C)[^f00104] (decision of disputes generally), for “Authority” substitute “FCA or the PRA”.

12

After section 85(4) (conversion of society into branch) insert—

(4A) Before making a finding under subsection (4) in relation to a society which is a PRA-authorised person, the FCA must consult the PRA.

13

(1) Section 87[^f00105] (power to apply for winding up of registered friendly societies) is amended as follows.

(2) In subsection (1), for “Authority”—

(a) in the first place, substitute “FCA or the PRA”; and

(b) in the second place, substitute “FCA, after consulting the PRA, or the PRA, after consulting the FCA,”.

(3) After subsection (2), insert—

(3) Subsection (1) does not require the FCA to consult the PRA if the society in question is not a PRA-authorised person. (4) The PRA may only present a petition under subsection (1) in respect of a society which is a PRA-authorised person.

(4) In the heading, for “Authority” substitute “FCA and of PRA”.

14

In section 90[^f00106] (appointment of inspectors and calling of special meetings), for “the Authority”, in each place, substitute “the FCA or the PRA”.

15

In section 91(1)[^f00107] (cancellation and suspension of registration), for “Authority”—

(a) in the first place, substitute “FCA, having consulted the PRA if the society is a PRA-authorised person,”, and

(b) in each other place, substitute “FCA”.

16

In section 93(1)(c)[^f00108] (dissolution of societies and branches), for “Authority” substitute “FCA or the PRA”.

17

(1) Section 94[^f00109] (instrument of dissolution) is amended as follows.

(2) In subsection (2)(d), for “Authority” substitute “FCA or the PRA”.

(3) After subsection (4), insert—

(4A) If the society or branch is a PRA-authorised person, a copy of the instrument and declaration sent to the FCA under paragraph (4) shall be sent to the PRA.

18

(1) Section 95[^f00110] (dissolution by award) is amended as follows.

(2) In subsections (1), (3), (4) and (6), for “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (3), insert—

(3A) The PRA must consult the FCA before making an award and direction under subsection (3).

19

(1) Section 95A[^f00111] (dissolution of registered friendly societies and branches by award) is amended as follows.

(2) In subsections (1), (2) and (4), for “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (1), insert—

(1A) The PRA must consult the FCA before making an award or a direction under subsection (1).

20

In section 97[^f00112] (notice of proceedings or order to set aside dissolution of society or branch), for “Authority”, in each place, substitute “FCA and, if the society or branch is a PRA-authorised person, the PRA”.

21

In section 98(1)(b) and (7)[^f00113] (offences), for “Authority”, in each place, substitute “FCA or the PRA”.

22

(1) Section 101[^f00114] (prosecution of offences, recovery of costs or expenses) is amended as follows.

(2) After subsection (1A), insert—

(1B) Summary proceedings for an offence under a provision listed in subsection (1C) may also be commenced by the PRA, in the circumstances specified in that subsection in relation to that provision, after notifying the FCA. (1C) The provisions and the circumstances are— (a) section 32 (audit of exempt societies and branches), if the failure referred to in subsection (4) of that section is a failure to comply with a direction given by the PRA under subsection (2) of that section; (b) section 39C (power to require accounts of past years to be audited), if the failure referred to in subsection (2) of that section is a failure to comply with a direction given by the PRA under subsection (1) of that section; and (c) section 98 (offences), if the neglect or refusal referred to in subsection (1)(b) of that section relates to an act or information required by the PRA.

(3) In subsection (2), for “Authority” substitute “FCA or the PRA”.

23

In section 109(1)(c)[^f00115] (regulations), for “Authority” substitute “FCA and of the PRA”.

24

In section 110(2) and (2A), for “Authority” substitute “FCA or the PRA”.

25

In section 111(1)[^f00116] (interpretation)—

(a) omit the definition of “the Authority”; and

(b) at the appropriate places, insert—

“the appropriate authority” means— in relation to a society which is a PRA-authorised person, the PRA; and in relation to a society which is not a PRA-authorised person, the FCA;

“the FCA” means the Financial Conduct Authority;

“the PRA” means the Prudential Regulation Authority;

; and

“PRA-authorised person” has the meaning in section 2B of the Financial Services and Markets Act 2000;

SCHEDULE 6 — Amendments of the Credit Unions Act 1979

1

The Credit Unions Act 1979[^f00117] is amended as follows.

2

(1) Section 1[^f00118] (registration under the Industrial and Provident Societies Act 1965) is amended as follows.

(2) In subsection (1)—

(a) in paragraph (a), for “Authority” substitute “FCA”;

(b) in paragraph (d), for “to the Authority for Part IV permission under section 40” substitute “for permission under Part 4A”;

(d) for paragraph (e), substitute—

(e) the FCA is satisfied that, once registered under the 1965 Act, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which the FCA is responsible in relation to the regulated activity of accepting deposits; and (f) the PRA is satisfied that, once registered under the 1965 Act, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which the PRA is responsible in relation to the regulated activity of accepting deposits.

(3) For subsections (1A) and (1B), substitute—

(1A) The PRA must notify the FCA if it is satisfied as mentioned in paragraph (f) of subsection (1). (1B) The FCA must not issue an acknowledgement of registration under section 2(3) of the 1965 Act to a credit union unless— (a) if the FCA is the appropriate regulator (within the meaning of section 55A of the 2000 Act), it proposes to give that society permission under Part 4A of the 2000 Act to accept deposits; (b) if the PRA is the appropriate regulator (within the meaning of section 55A of the 2000 Act), the PRA proposes to give that society permission under Part 4A of the 2000 Act to accept deposits. (1C) The PRA must notify the FCA if it proposes to give that society permission under Part 4A of the 2000 Act to accept deposits. (1D) If the FCA issues an acknowledgement of registration to a credit union under that section, the appropriate regulator (within the meaning of section 55A of the 2000 Act) must determine any outstanding application of that credit union for permission under Part 4A of the 2000 Act to accept deposits as soon as reasonably possible thereafter.

3

In section 1A(2)(e) and (5)[^f00119] (common bonds appropriate to a credit union), for “Authority” substitute “FCA”.

4

In section 1B(4)[^f00120] (further requirements where common bond relates to locality), for “Authority” substitute “FCA”.

5

(1) Section 3[^f00121] (use of name “credit union”, etc.) is amended as follows.

(2) In subsection (3)(b), for “Authority” substitute “FCA”.

(3) In subsection (3A)(a), for “Part IV permission under the 2000 Act” substitute “permission under Part 4A of the 2000 Act”.

6

(1) Section 4[^f00122] (rules) is amended as follows.

(2) In subsection (1), for “Authority”, in each place, substitute “FCA”.

(3) After subsection (1), insert—

(1A) The FCA must consult the PRA before determining any provision under subsection (1)(b) which relates to credit unions which are PRA-authorised persons.

7

In section 5A(4)^f00123, for “Authority” substitute “appropriate authority”.

8

In section 7A[^f00124] (power to issue interest-bearing shares), for “Authority”, in each place, substitute “appropriate authority”.

9

In section 16(3)[^f00125] (guarantee funds), for “Authority”, in each place, substitute “appropriate authority”.

10

In the cross-heading above section 17, for “registrar” substitute “FCA and PRA”.

11

(1) Section 17[^f00126] (power to require information) is amended as follows.

(2) In subsection (1), for “Authority” substitute “FCA”.

(3) After subsection (1), insert—

(1A) The PRA may, in connection with the exercise of its functions under this Act, exercise in relation to a credit union the powers of the FCA under subsection (1) of section 48 of the 1965 Act to require the production of books, accounts and other documents and the furnishing of information, and subsections (2) and (3) of section 48 of the 1965 Act (penalties and defraying expenses) shall apply accordingly.

12

(1) Section 18[^f00127] (power to appoint inspector and call meeting) is amended as follows.

(2) In subsections (1) and (2), for “Authority” substitute “FCA or the PRA”.

(3) After subsection (3), insert—

(4) The FCA and the PRA must each notify the other before appointing an inspector or calling a meeting under subsection (1) in relation to a society which is a PRA-authorised person.

13

(1) Section 20[^f00128] (cancellation or suspension of registration and petition for winding up) is amended as follows.

(2) For subsections (1A) and (1B), substitute—

(1A) The FCA may also exercise the power to cancel the registration of a credit union under section 16 of the 1965 Act if the credit union’s permission under Part 4A of the 2000 Act has been cancelled or if the credit union has received a warning notice under section 55Z of the 2000 Act. (1B) The FCA must not cancel the registration of a credit union under section 16 of the 1965 Act by virtue of subsection (1A) unless the appropriate regulator (within the meaning of section 55A of the 2000 Act) has cancelled the credit union’s permission under Part 4A of the 2000 Act and there is no possibility (or no further possibility) of that determination of the appropriate regulator being reversed or varied.

(3) In subsection (1D), for “Authority”, in each place, substitute “FCA”.

(4) After subsection (1D), insert—

(1E) If the credit union is a PRA-authorised person, the FCA must consult the PRA before cancelling the registration of the credit union by virtue of subsection (1A).

(5) In subsection (2), for “Authority”, in each place, substitute “FCA or the PRA”.

(6) After subsection (2), insert—

(3) The FCA and the PRA must each consult the other before presenting a petition under subsection (2).

14

(1) Section 21[^f00129] (amalgamations and transfers of engagements) is amended as follows.

(2) In subsection (3), for “The Authority” substitute “In relation to a credit union which is not a PRA-authorised person, the FCA”.

(3) After subsection (3), insert—

(3A) In relation to a credit union which is a PRA-authorised person— (a) the FCA shall not register a special resolution under section 50 or section 51 of the 1965 Act if the PRA informs the FCA that it is of the opinion that that paragraph (a) or (b) of subsection (3) applies, and (b) the PRA must consult the FCA before determining its opinion.

15

(1) Section 23[^f00130] (conversion of company into credit union) is amended as follows.

(2) In subsection (3)—

(a) in the opening words, for “Authority” substitute “FCA”; and

(b) in paragraph (b), omit “made by the Authority under the 2000 Act”.

(3) After subsection (3), insert—

(4) In subsection (3), “applicable rules” are— (a) if the credit union is a PRA-authorised person, rules made by the PRA or the FCA under the 2000 Act; and (b) if the credit union is not a PRA-authorised person, rules made by the FCA under the 2000 Act.

16

In section 31(1)[^f00131] (interpretation), omit the definition of “Part IV permission”.

17

In section 31A(3)[^f00132] (deferred shares), for “Authority”, in each place, substitute “appropriate authority”.

18

(1) Section 32[^f00133] (Northern Ireland) is amended as follows.

(2) In subsection (1), for “Authority”, in each place, substitute “FCA”.

(3) In subsection (2), for “the Authority” substitute “each of the FCA and the PRA”.

19

In paragraphs 7 and 11 of Schedule 1[^f00134] (matters to be provided for in rules of credit union), for “Authority” substitute “FCA or the PRA”.

SCHEDULE 7 — Amendments of the Credit Unions (Northern Ireland) Order 1985

1

The Credit Unions (Northern Ireland) Order 1985[^f00135] is amended as follows.

2

(1) Article 2 (interpretation) is amended as follows.

(2) In paragraph (2)—

(a) in the definition of “authorised bank”, in paragraph (a), for “Part 4” substitute “Part 4A”;

(b) omit the definition of “the Authority”;

“the appropriate authority” means— in relation to a credit union which is a PRA-authorised person, the PRA; and in relation to a credit union which is not a PRA-authorised person, the FCA;

“the FCA” means the Financial Conduct Authority;

“the PRA” means the Prudential Regulation Authority;

; and

“PRA-authorised person” has the meaning in section 2B of the 2000 Act;

3

For Article 2A(4) and (5) (the registrar and assistant registrar), substitute—

(4) In the exercise of the registrar’s functions under this Order, the registrar must cooperate with the FCA and the PRA in the exercise by those authorities of any of their functions in relation to credit unions. (5) The registrar may share with each of the FCA and the PRA any information obtained by the registrar relating to credit unions which each of those authorities might reasonably require for the purpose of the performance of any of its functions in relation to credit unions.

4

(1) Article 3 (registration) is amended as follows.

(2) For paragraph (1)(d) and (e), substitute—

(d) the society has made an application for a permission under Part 4A of the 2000 Act to accept deposits; (e) the FCA is satisfied that, once registered under this Order, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which the FCA is responsible in relation to the regulated activity of accepting deposits; and (f) the PRA is satisfied that, once registered under this Order, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which the PRA is responsible in relation to the regulated activity of accepting deposits.

(3) After paragraph (1), insert—

(1A) The FCA must notify the registrar in writing if it is satisfied as mentioned in paragraph (1)(e). (1B) The PRA must notify the registrar in writing if it is satisfied as mentioned in paragraph (1)(f).

5

For Article 4(2A) (supplementary provisions as to registration), substitute—

(2A) The registrar must not issue an acknowledgement of registration under paragraph (2) unless the appropriate regulator (within the meaning of section 55A of the 2000 Act) has confirmed to the registrar that it proposes to give the society permission under Part 4A of that Act to accept deposits.

6

In Article 31(3)(c) (charges on assets of credit unions), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

7

In Article 36(3) (application of surplus), for “Authority under the 2000 Act” substitute “FCA under the 2000 Act and, if the society is a PRA-authorised person, rules made by the PRA under the 2000 Act”.

8

In Article 49(3)(b) and (4) (annual returns), for “Authority” substitute “appropriate authority”.

9

(1) Article 53 (duties of receiver or manager of credit union’s property) is amended as follows.

(2) Number the existing provision as paragraph (1).

(3) In that paragraph (1), for “the Authority”, in each place, substitute “the appropriate person”.

(4) In that paragraph (1), in sub-paragraph (b), omit the parenthesis after “1 month”.

(5) After that paragraph (1), insert—

(2) In this article, “the appropriate person” means— (a) the registrar; (b) the FCA; and (c) if the society is a PRA-authorised person, the PRA. (3) The registrar, the FCA and, if the society is a PRA-authorised person, the PRA may each allow a period of longer than 1 month for the delivery of returns to it under paragraph (1)(b).

10

In Article 60(1) (cancellation of registration), for “the Authority” substitute “the FCA and, if the society is a PRA-authorised person, the PRA”.

11

Article 61 (1) (suspension of registration), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

12

In Article 62(1) (appeals), for sub-paragraphs (b) and (c), substitute—

(b) the society has not made an application under Part 4A of the 2000 Act to accept deposits; or (c) the FCA or the PRA has not confirmed to the registrar that it is satisfied that, once registered under this Order, the society will satisfy, and continue to satisfy, the threshold conditions (within the meaning of section 55B(1) of the 2000 Act) for which it is responsible in relation to the regulated activity of accepting deposits.

13

Article 63 (petition for winding-up), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

14

(1) Article 65 (amalgamation of credit unions) is amended as follows.

(2) In paragraph (7), for “Authority” substitute “appropriate authority”.

(3) After paragraph (7), insert—

(8) If the appropriate authority is the PRA, it must consult the FCA before giving its confirmation under paragraph (7).

15

(1) Article 66 (transfer of engagements between credit unions) is amended as follows.

(2) In paragraph (4), for “Authority” substitute “appropriate authority”.

(3) After paragraph (4), insert—

(5) If the appropriate authority is the PRA, it must consult the FCA before giving its confirmation under paragraph (4).

16

(1) Schedule 1 (matters to be provided for in rules of credit union) is amended as follows.

(2) In paragraph 7, for “the Authority” substitute “each of the FCA and the PRA”.

(3) In paragraph 11, for “the Authority” substitute “each of the FCA and the PRA”.

SCHEDULE 8 — Amendments of the Building Societies Act 1986

1

The Building Societies Act 1986[^f00136] is amended as follows.

2

In the heading of Part I, for “Authority” substitute “Financial Conduct Authority and the Prudential Regulation Authority”.

3

(1) Section 1[^f00137] (functions in relation to building societies) is amended as follows.

(2) In subsection (1)—

(a) for “The Financial Services Authority (“the Authority”)” substitute “The FCA”; and

(b) omit paragraph (a).

(3) After subsection (1), insert—

(1A) The PRA has the following functions under this Act in relation to building societies— (a) to secure that the principal purpose of building societies remains that of making loans which are secured on residential property and are funded substantially by their members; (b) to administer the system of regulation of building societies provided by or under this Act, but only in so far as sections 5, 6, 7, 9A and 9B confer functions on the PRA; and (c) to advise and make recommendations to the Treasury and other government departments on any matter relating to building societies.

(4) In subsection (2)—

(a) for “Authority also has” substitute “FCA and the PRA also have”; and

(b) for “it” substitute “them respectively”.

(5) In the heading, for “Financial Services Authority” substitute “Financial Conduct Authority and the Prudential Regulation Authority”.

4

(1) Section 5[^f00138] (establishment, constitution and powers) is amended as follows.

(2) In subsection (2), for “Authority” substitute “FCA”.

(3) In subsection (4A), for “Authority” substitute “appropriate authority”.

(4) For subsection (13)(a), substitute—

(a) section 1(1A)(a) (functions of the Prudential Regulation Authority in relation to building societies);

5

(1) Section 6[^f00139] (the lending limit) is amended as follows.

(2) In subsection (5)(a), for “Authority” substitute “appropriate authority”.

(3) For subsection (12)(a), substitute—

(a) in respect of its business in effecting or carrying out contracts of long term insurance in accordance with rules made by— (i) the FCA under section 137A of the Financial Services and Markets Act 2000, or (ii) the PRA under section 137G of that Act, which require an authorised person who has permission to effect or carry out contracts of insurance to identify assets which belong to that person and which are maintained in respect of a particular aspect of that person’s business; or

(4) In subsection (15), for “Authority” substitute “appropriate authority”.

6

In section 7(5)(a)[^f00140] (the funding limit), for “Authority” substitute “appropriate authority”.

7

In section 8(3)[^f00141] (raising funds and borrowing), for “Authority”, in each place, substitute “appropriate authority”.

8

In section 9A(5)(a)[^f00142] (restrictions on certain transactions), for “Part IV” substitute “Part 4A”.

9

In the heading to Part 6, for “Authority” substitute “appropriate authority”.

10

(1) Section 36[^f00143] (power to direct restructuring of business etc.) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate authority”.

(3) In subsection (5)(b), before “of the result” insert “and, if the appropriate authority is the PRA, the FCA”.

(4) In subsection (6), before “of the option” insert “and, if the appropriate authority is the PRA, the FCA”.

(5) After subsection (16), insert—

(17) The PRA must consult the FCA before issuing a direction under this section.

11

(1) Section 36A[^f00144] (power to make prohibition orders) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (5D), insert—

(5E) The PRA must consult the FCA about the terms of the prohibition order in question before giving a warning notice or a decision notice under this section.

(4) In subsection (6), omit “, and shall keep a copy of the order in the public file of the society”.

(5) After subsection (9), insert—

(9A) The PRA must give the FCA a copy of any order issued under this section. (9B) The FCA must keep a copy of any order issued under this section in the public file of the society.

12

(1) Section 37[^f00145] (powers to petition for winding up etc.) is amended as follows.

(2) In subsections (1) and (2), for “Authority”, in each place, substitute “appropriate authority”.

(3) For subsection (4), substitute—

(4) Where the High Court makes an order under subsection (3)— (a) if the appropriate authority is the PRA, it must give a copy of the order to the FCA; and (b) in any case, the FCA must keep a copy of the order in the public file of the society.

13

(1) Section 42B[^f00146] (power to direct transfers of engagements or business) is amended as follows.

(2) In subsections (1) to (5), for “Authority”, in each place, substitute “appropriate authority”.

(3) In subsection (1), for “Part IV” substitute “Part 4A”.

(4) In subsection (2)—

(a) for “section 45” substitute “section 55J (variation or cancellation on initiative of regulator), section 55L (imposition of requirements by FCA) or section 55M (imposition of requirements by PRA)”; and

(b) omit “(power to vary or cancel a Part IV permission on the Authority’s own initiative)”.

(5) After subsection (5), insert—

(5A) The PRA must consult the FCA before giving a direction under this section.

14

(1) Section 42C[^f00147] (variation and revocation of transfer directions) is amended as follows.

(2) In subsection (1), for “Authority” substitute “appropriate authority”.

(3) After subsection (1), insert—

(1A) If the appropriate authority is the PRA, it must consult the FCA before varying or revoking a direction.

15

In section 46A[^f00148] (notices, hearings and appeals), for “Authority”, in each place, substitute “appropriate authority”.

16

(1) Section 52[^f00149] (powers to obtain information and documents etc.) is amended as follows.

(2) In subsection (1), for “Authority of any of its functions” substitute “FCA or the PRA of any of their respective functions”.

(3) In subsection (5), for “Authority”—

(a) in the opening words of that subsection, substitute “FCA and the PRA”; and

(b) in paragraphs (a) to (d) of that subsection, in each place, substitute “it”.

(4) In subsection (5A), for “Authority”—

(a) in the opening words of that subsection, substitute “FCA or the PRA”; and

(b) in paragraphs (a) to (c) of that subsection, in each place, substitute “body which authorised the person”.

(5) In subsection (6)—

(a) for “Authority has power”, substitute “FCA or the PRA has power”; and

(b) for “Authority or authorised officer” in each place, substitute “FCA, the PRA or the authorised officer (as the case may be)”.

(6) In subsection (9)—

(a) for “Authority or an authorised officer” substitute “FCA, the PRA or an authorised officer”; and

(b) for “Authority or authorised officer” substitute “FCA, the PRA or the authorised officer (as the case may be)”.

(7) In subsection (13), for “Authority” substitute “FCA or the PRA”.

17

In section 52B(1)[^f00150] (entry of premises under warrant), for “Authority” substitute “FCA or the PRA”.

18

(1) Section 53A[^f00151] (disclosure of information) is amended as follows.

(2) For subsection (1)(b)(i), substitute—

(i) the FCA; (ia) the PRA;

(3) In subsection (1)(b)(ii) and (iii), for “Authority”, in each place, substitute “FCA or the PRA”.

(4) In subsection (2)(b), for “Authority” substitute “FCA or the PRA”.

19

(1) Section 54[^f00152] (information from other sources) is amended as follows.

(2) For “Authority”, in each place, substitute “FCA or the PRA”.

(3) In the heading, for “Authority” substitute “FCA or PRA”.

20

(1) Section 55[^f00153] (investigations) is amended as follows.

(2) In subsection (1), for “the Authority”—

(a) in the first place, substitute “the FCA or the PRA”; and

(b) in the second place, substitute “it”.

(3) In subsection (6), for “Authority” substitute “FCA or the PRA”.

(4) In the heading, for “Authority” substitute “FCA or PRA”.

21

(1) Section 56[^f00154] (inspections and special meetings: general) is amended as follows.

(2) In subsection (1), for “Authority” substitute “FCA and the PRA”.

(3) After subsection (1), insert—

(1A) The FCA must consult the PRA before exercising the power in subsection (1). (1B) The PRA must consult the FCA before exercising the power in subsection (1).

(4) In subsections (2) and (3) for “Authority”, in each place, substitute “FCA or the PRA (as the case may be)”.

(5) In subsection (4), for “Authority” substitute “body exercising its powers under subsection (1)”.

(6) In subsection (6), for “Authority”, in each place, substitute “body to which the application was made”.

(7) In subsection (7)—

(a) for “Before exercising” substitute “Before the FCA or the PRA exercises”; and

(b) for “the Authority”—

(i) in the first place, substitute “it”; and

(ii) in the second place, substitute “the body exercising its powers under subsection (1)”.

(8) In subsection (8), for “Authority” substitute “FCA or the PRA”.

(9) In subsection (10), for “Authority”, in each place, substitute “body exercising its powers under subsection (1)”.

22

(1) Section 57[^f00155] (inspections: supplementary provisions) is amended as follows.

(2) In subsection (1), omit “by the Authority”.

(3) In subsections (7), (8), (8A), (9) and (10), for “Authority”, in each place, substitute “body which appointed the inspectors”.

23

In section 59(6)[^f00156] (chief executive and secretary), for “Authority”, in each place, substitute “FCA”.

24

In section 61[^f00157] (directors: supplementary provisions as to elections etc.), in subsections (9) and (13), for “Authority”, in each place, substitute “FCA”.

25

For section 68(5) (records of loans etc.), substitute—

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

26

(1) Section 69[^f00158] (disclosure and record of income of related businesses) is amended as follows.

(2) In subsection (8), for “Authority” substitute “FCA”.

(3) For subsection (14), substitute—

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

27

(1) Section 76[^f00159] (summary financial statement) is amended as follows.

(2) In subsection (8), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, one copy to the PRA”.

(3) In subsection (12), for “Authority” substitute “FCA”.

28

(1) Section 78C[^f00160] (names to be stated in copies of the auditor’s report) is amended as follows.

(2) In subsection (1), in each place, omit “to the Authority”.

(3) In subsection (3), for “Authority” substitute “FCA”.

29

(1) Section 78D[^f00161] (circumstances in which names may be omitted) is amended as follows.

(2) In subsection (1), omit “to the Authority”.

(3) In subsection (2)(b), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

30

(1) Section 81[^f00162] (laying and furnishing of accounts) is amended as follows.

(2) In subsection (2), for “Authority” substitute “FCA, and, if the society is a PRA-authorised person, one copy to the PRA,”.

(3) In subsection (3), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(4) In subsection (7), for “Authority” substitute “FCA”.

(5) In the heading, for “and the Authority” substitute “, the FCA and the PRA”.

31

(1) Section 87[^f00163] (dissolution by consent) is amended as follows.

(2) In subsection (5), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(3) In subsection (7), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(4) In subsection (8), for “Authority” substitute “appropriate authority”.

(5) In subsection (10), for “Authority” substitute “FCA”.

32

In section 88(2)[^f00164] (voluntary winding up)—

(a) for “to the Authority” substitute “to the FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) for “Authority shall keep the copy” substitute “FCA must keep a copy”.

33

(1) Section 89[^f00165] (winding up by court: grounds and petitioners) is amended as follows.

(2) In subsection (1), for “Part IV”, in each place, substitute “Part 4A”.

(3) For subsection (2)(a), substitute—

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

34

In section 89A(2)(a)[^f00166] (building society insolvency as alternative order), for “Authority” substitute “appropriate authority”.

35

(1) Section 90D[^f00167] (notice of preliminary steps) is amended as follows.

(2) In subsection (5), for “Authority has” substitute “FCA and, if the society is a PRA-authorised person, the PRA have”.

(3) In subsection (7)(b)(i), for “Authority” substitute “PRA”.

(4) In subsection (10)—

(a) after “Where” insert “the society is a PRA-authorised person and”; and

(b) for “Authority”, in each place, substitute “PRA”.

(5) After subsection (10), insert—

(11) Where the society is not a PRA-authorised person and the FCA receives notice under Condition 1— (a) the FCA shall inform the Bank of England, and (b) if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a).

(6) In the heading, for “Authority” substitute “FCA and the PRA”.

36

In section 91(4)[^f00168] (power of court to declare dissolution of building society void)—

(a) for “furnish the Authority” substitute “furnish the FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) for “Authority shall keep the copy” substitute “FCA must keep a copy”.

37

(1) Section 93[^f00169] (amalgamations) is amended as follows.

(2) In subsection (2)(d), for “Authority”—

(a) in the first place, substitute “appropriate authority”; and

(b) in the second place, substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(3) In subsection (3)—

(a) for “Authority” substitute “appropriate authority”;

(b) before “is satisfied” insert “the FCA”; and

(4) In subsection (4), for “Authority” substitute “appropriate authority”.

(5) In subsection (6)—

(a) for “Authority”, in each place, substitute “appropriate authority”; and

(b) for “Part IV” substitute “Part 4A”.

(6) In subsection (6A), for “subsection (9) of section 52 of that Act by virtue of paragraph (a) of that subsection” substitute “subsection (5) of section 55V of that Act by virtue of paragraph (a) or (b) of that subsection”.

(7) In subsection (6B)—

(a) for “section 55” substitute “section 55Z3”; and

(b) for “Part IV” substitute “Part 4A”.

(8) In subsection (6C)—

(a) omit “the Authority from taking”; and

(b) after “decision notice” insert “from being taken”.

38

(1) Section 94[^f00170] (transfer of engagements) is amended as follows.

(2) In subsection (5)(b), for “Authority” substitute “appropriate authority”.

(3) In subsection (7)(a), for “Authority” substitute “appropriate authority”.

(4) In subsection (8)—

(a) for “Authority” substitute “appropriate authority”; and

(b) for “it shall” substitute “the FCA must”.

(5) In subsection (9), for “Authority” substitute “FCA”.

39

(1) Section 95[^f00171] (mergers: provisions supplementing sections 93 and 94) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (6), insert—

(6A) The PRA must consult the FCA before confirming an amalgamation or transfer, or giving a direction, under this section. (6B) The PRA must— (a) notify the FCA it if confirms an amalgamation or transfer; and (b) send the FCA a copy of any direction it gives.

40

In section 96(6)[^f00172] (mergers: compensation for loss of office and bonuses to members), for “Authority”, in each place, substitute “appropriate authority”.

41

(1) Section 97[^f00173] (transfer of business to commercial company) is amended as follows.

(2) In subsection (4)(d), for “Authority” substitute “appropriate authority”.

(3) In subsection (6), for “Authority” substitute “appropriate authority”.

(4) In subsection (8)—

(a) for “send to the Authority” substitute “send to each of the FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) for “Authority shall” substitute “FCA must”.

(5) In subsection (12), for “Authority” substitute “appropriate authority”.

42

(1) Section 98[^f00174] (transfers of business: supplementary provisions) is amended as follows.

(2) In subsection (1A), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(3) In subsection (2), for “Authority” substitute “appropriate authority”.

(4) In subsection (3)—

(a) for “Authority”, in each place, substitute “appropriate authority”; and

(b) for “Part IV” substitute “Part 4A”.

(5) In subsections (4) and (5), for “Authority”, in each place, substitute “appropriate authority”.

(6) After subsection (8), insert—

(9) The PRA must consult the FCA before confirming a transfer or giving a direction under this section. (10) The PRA must— (a) notify the FCA it if confirms a transfer; and (b) send the FCA a copy of any direction it gives.

43

In section 100(7)[^f00175] (regulated terms etc.: distributions and share rights), for “Authority”, in each place, substitute “appropriate authority”.

44

(1) Section 101[^f00176] (protective provisions for specially formed successors) is amended as follows.

(2) In subsection (4), for “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (4), insert—

(4A) The PRA must consult the FCA before giving a direction under this section.

45

(1) Section 103[^f00177] (cancellation of registration) is amended as follows.

(2) For “Authority”, in each place, substitute “FCA”.

(3) In subsection (1), after “Where” insert “, having consulted the PRA,”.

(4) In subsection (2)—

(a) after “Where” insert “, having consulted the PRA,”; and

(b) for “Part IV” substitute “Part 4A”.

(5) In subsection (3), after “if it thinks fit” insert “after consulting the PRA”.

46

In section 106[^f00178] (public file of the society), for “Authority”, in each place, substitute “FCA”.

47

In section 107[^f00179] (restriction of use of certain names and descriptions), for “Authority”, in each place, substitute “FCA”.

48

(1) Section 111[^f00180] (time limit for commencing proceedings) is amended as follows.

(2) In subsection (1)—

(a) after “under this Act”, insert “, other than an offence in relation to which provision is made in subsection (1A),”;

(b) for “by the Authority” substitute “by the FCA”; and

(3) After subsection (1), insert—

(1A) Notwithstanding any limitation on the time for taking proceedings contained in any Act, summary proceedings for the offences under the provisions listed in subsection (1B), in the circumstances specified in that subsection in relation to those provisions, may be commenced by the PRA, after notifying the FCA, or by the FCA, after notifying the PRA, at any time within the period mentioned in subsection (1C). (1B) The provisions and the circumstances are— (a) section 52 (powers to obtain information and documents etc.), if— (i) the failure referred to in subsection (10) of that section is a failure to furnish any information or accountant’s report, to produce any documents or material, or to provide any explanation or make any statement to the PRA, or (ii) the information, explanation or statement referred to in subsection (11) or (12) of that section is furnished, provided or made to the PRA; (b) section 55 (investigations), if the person appointed under subsection (1) of that section was appointed by the PRA; (c) section 81 (laying and furnishing accounts), if the default referred to in subsection (4) of that section relates to a failure to send a copy of the accounts to the PRA in accordance with subsection (2) of that section; (d) section 87 (dissolution by consent), if the failure referred to in subsection (5) or (7) of that section relates to a failure to give notice to the PRA; (e) section 88 (voluntary winding up), if the failure referred to in subsection (4) of that section relates to a failure to send a copy of the resolution to the PRA in accordance with subsection (2) of that section; (f) section 91 (power of court to declare dissolution of building society void), if the failure referred to in subsection (5) of that section relates to a failure to send a copy of an order to the PRA in accordance with subsection (4) of that section; (g) section 95 (mergers: provisions supplementing sections 93 and 94), if the application referred to subsection (3) of that section was made, or should have been made, to the PRA; (h) section 98 (transfers of business: supplementary provisions), if the application referred to subsection (2) of that section was made, or should have been made, to the PRA; (i) Schedule 8A, paragraph 3(5) (directions under section 42B(3)), if the PRA has given a direction under section 42B(3); (j) Schedule 8A, paragraph 9(5) (directions under section 42B(4)), if the PRA has given a direction under section 42B(4); (k) Schedule 11, paragraph 3 (auditors: appointment), if the failure referred to in sub-paragraph (2) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (1) of that paragraph; (l) Schedule 11, paragraph 6 (auditors: removal), if the failure referred to in sub-paragraph (3) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (2) of that paragraph; (m) Schedule 11, paragraph 7 (auditors: resignation), if the default referred to in sub-paragraph (8) of that paragraph relates to a failure to send any notice or statement to the PRA in accordance with sub-paragraph (3) or (7) of that paragraph; (n) Schedule 15, paragraph 21 (application of companies winding up legislation to building societies: winding up by the court), if the failure referred to in sub-paragraph (4) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (3) of that paragraph; (o) Schedule 15, paragraph 48 (modified application of Insolvency (Northern Ireland) Order 1989: winding up by the High Court), if the failure referred to in sub-paragraph (4) of that paragraph relates to a failure to give notice to the PRA in accordance with sub-paragraph (3) of that paragraph; and (p) Schedule 16, paragraph 6 (mergers: penalty), if the default referred to in sub-paragraph (1) of that paragraph relates to a failure to send a copy of a statement or notification to the PRA in accordance with paragraph 5(1) of that Schedule. (1C) The period is one year beginning with the date on which evidence comes to the knowledge of one or both of the FCA and the PRA, being evidence sufficient in the opinion of the FCA or the PRA (as the case may be) to justify a prosecution.

(4) In subsection (2), after “(1)” insert “or (1A)”.

(5) In subsection (3)—

(a) after “subsection (1)” insert “and subsection (1C)”;

(b) for “Authority” substitute “FCA or the PRA”; and

(6) For subsection (4), substitute—

(4) In the application of this section to Scotland— (a) for subsection (1), substitute— (1) Notwithstanding any limitation on the time for the taking of proceedings contained in any Act, summary proceedings for any offence under this Act may, subject to subsection (2), be commenced by the Lord Advocate at any time within the period of one year beginning with the date on which evidence sufficient in the opinion of the Lord Advocate to justify a prosecution for the offence, comes to the knowledge of the Lord Advocate (b) omit subsections (1A), (1B) and (1C); and (c) for subsection (3), substitute— (3) For the purposes of subsection (1) of this section a certificate, purporting to be signed by or on behalf of the Lord Advocate, as to the date on which such evidence as is mentioned in that subsection came to the knowledge of the Lord Advocate, shall be conclusive evidence of that date.

49

(1) Section 113[^f00181] (evidence) is amended as follows.

(2) In subsection (1), for “Authority” substitute “FCA”.

(3) In subsections (1A) and (1B), “Authority” substitute “FCA or the PRA”.

50

In section 115(1)[^f00182] (service of notices), for “Authority” substitute “FCA and the PRA”.

51

(1) Section 116[^f00183] (form of documents) is amended as follows.

(2) In subsection (1), for “Authority may” substitute “FCA and the PRA may each”.

(3) After subsection (1), insert—

(1A) The PRA and the FCA must each consult the other before issuing a direction under this section if the document in question is required to be sent to both of them.

52

(1) Section 119[^f00184] (interpretation) is amended as follows.

(2) In subsection (1)—

(a) omit the definition of “the Authority”;

(b) in the definition of “officially notified”, for “Authority” substitute “FCA”;

(d) at the appropriate places, insert—

“the appropriate authority” means— in relation to a building society which is a PRA-authorised person, the PRA; and in relation to a building society which is not a PRA-authorised person, the FCA;

“the FCA” means the Financial Conduct Authority;

“the PRA” means the Prudential Regulation Authority;

“PRA-authorised person” has the meaning in section 2B of the Financial Services and Markets Act 2000;

(3) In subsection (1A)—

(a) for “Authority” substitute “FCA”; and

(b) for “Authority’s” substitute “FCA’s”.

(4) In subsection (4), for “Authority” substitute “appropriate authority”.

53

(1) Schedule 2[^f00185] (establishment, incorporation and constitution of building societies) is amended as follows.

(2) In paragraph 1, for “Authority”, in each place, substitute “FCA”.

(3) In paragraph 4(2), (4) and (7), for “Authority”, in each place, substitute “FCA”.

(4) In paragraph 9, for “Authority”, in each place, substitute “FCA”.

(5) In paragraph 10(5), for “Authority” substitute “FCA”.

(6) In paragraph 10A(2), (3) and (4), for “Authority” substitute “FCA”.

(7) In paragraph 11, for “Authority”, in each place, substitute “FCA”.

(8) In paragraph 15—

(a) for “Authority”, in each place, substitute “FCA”;

(b) in sub-paragraph (1), for “Part IV” substitute “Part 4A”; and

(3A) The FCA must consult the PRA before giving a direction under sub-paragraph (2).

(9) In paragraph 20, for “Authority”, in each place, substitute “FCA”.

(10) In paragraph 20A(12), for “Authority” substitute “appropriate authority”.

(11) In paragraph 30(4), for “Authority” substitute “appropriate authority”.

(12) After paragraph 30(4), insert—

(4A) If the appropriate authority is the PRA, it must consult the FCA before giving a direction under sub-paragraph (5).

(13) In paragraph 31(7), for “Authority” substitute “PRA”.

54

(1) Schedule 8A[^f00186] (transfer directions: modifications of Part 10) is amended as follows.

(2) For “Authority”, in each place, substitute “appropriate authority”.

(3) After paragraph 3(2), insert—

(2ZA) The PRA must consult the FCA before requiring any particulars under sub-paragraph (2)(b).

(4) After paragraph 9(2), insert—

(2ZA) The PRA must consult the FCA before requiring any particulars under sub-paragraph (2)(b).

55

(1) Schedule 11[^f00187] (auditors) is amended as follows.

(2) In paragraph 3(1)—

(a) for “Authority”, in each place, substitute “appropriate authority”; and

(b) for “give it notice” substitute “give notice to the FCA and, if the society is a PRA-authorised person, to the PRA”.

(3) In paragraph 4(6)(b), (8) and (9), for “Authority”, in each place, substitute “appropriate authority”.

(4) In paragraph 6(2), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(5) For paragraph 6A(2)(b), substitute—

(b) the FCA; and (c) if the society is a PRA-authorised person, the PRA.

(6) In paragraph 7, for “Authority”—

(a) in sub-paragraph (3)(a), substitute “FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) in sub-paragraphs (4), (6) and (7), in each place, substitute “appropriate authority”.

(7) In paragraph 8(6)(b), for “Authority”, in each place, substitute “PRA”.

56

(1) Schedule 14[^f00188] (settlement of disputes) is amended as follows.

(2) In paragraph 1(5), for “Authority” substitute “FCA”.

(3) In the heading to paragraph 3, for “Authority” substitute “FCA and PRA”.

(4) In paragraph 3, for “Authority”, in each place, substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(5) In paragraph 6—

(a) for “Authority”, in each place, substitute “FCA”; and

(b) after sub-paragraph (2), insert—

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

57

(1) Schedule 15[^f00189] (application of companies winding up legislation to building societies) is amended as follows.

(2) In paragraph 3(1)(b), for “Financial Services Authority” substitute “Financial Conduct Authority”.

(3) In paragraph 4, for “Authority”, in each place, substitute “FCA”.

(4) In paragraph 21(3)—

(a) for “to the Authority” substitute “to the FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) for “Authority shall” substitute “FCA must”.

(5) In paragraph 29, for “Authority” substitute “appropriate authority”.

(6) In paragraph 31, for “Authority” substitute “FCA”.

(7) In paragraph 32, for “Authority”, in each place, substitute “FCA”.

(8) In paragraph 48(3)—

(a) for “to the Authority” substitute “to the FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) for “the Authority shall” substitute “the FCA must”.

(9) In paragraph 55A, for “Authority” substitute “appropriate authority”.

(10) In paragraph 55C, for “Authority” substitute “FCA”.

(11) In paragraph 55D, for “Authority”, in each place, substitute “FCA”.

58

(1) Schedule 15A[^f00190] (application of other companies insolvency legislation to building societies) is amended as follows.

(2) In paragraph 2(1)(b), for “Financial Services Authority” substitute “Financial Conduct Authority”.

(3) In paragraph 3(1), for “Authority”, in each place, substitute “FCA”.

(4) In paragraph 9A, for “Authority”, in each place, substitute “FCA”.

(5) In paragraphs 10, 11 and 15, for “Authority” substitute “FCA or the PRA”.

(6) In paragraph 23(1)(a), for “Authority” substitute “FCA, to the PRA”.

(7) In paragraph 21(1)(a), for “Authority” substitute “Financial Conduct Authority”.

(8) In paragraph 24, for “Authority”, in each place, substitute “FCA, the PRA”.

(9) In paragraph 31A—

(a) in sub-paragraph (a), for “the Financial Services Authority” substitute “each of the Financial Conduct Authority and the Prudential Regulation Authority”; and

(b) in sub-paragraphs (c) and (d), for “Financial Services Authority” substitute “Financial Conduct Authority or the Prudential Regulation Authority”.

(10) In paragraph 32(1)(a), for “Authority” substitute “FCA or the PRA”.

(11) In paragraph 33—

(a) in sub-paragraph (1)(a), for “Authority” substitute “FCA, by the PRA”; and

(b) in sub-paragraph (2), for “Authority” substitute “FCA or, as the case may be, the PRA”.

(12) In paragraph 37, for “the Authority” substitute “the FCA and the PRA”.

(13) In paragraph 43, for “Authority” substitute “Financial Conduct Authority”.

(14) In paragraph 45(1)(a), for “Authority” substitute “FCA, to the PRA”.

(15) In paragraph 46, for “Authority”, in each place, substitute “FCA, the PRA”.

59

(1) Schedule 16[^f00191] (mergers: supplementary provisions) is amended as follows.

(2) Except in paragraph 5, for “Authority”, in each place, substitute “appropriate authority”.

(3) After paragraph 1(4), insert—

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

(4) In paragraph 5—

(a) in sub-paragraph (1), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) in sub-paragraph (2), for “Authority shall” substitute “FCA must”.

60

(1) Schedule 17[^f00192] (transfers of business: supplementary provisions) is amended as follows.

(2) Except as provided in sub-paragraph (4), for “Authority”, in each place, substitute “appropriate authority”.

(3) After paragraph 4(3), insert—

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

(4) In paragraph 5D—

(a) in sub-paragraph (1), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) in sub-paragraph (2), for “Authority shall” substitute “FCA must”.

SCHEDULE 9 — Amendments of the Friendly Societies Act 1992

1

The Friendly Societies Act 1992[^f00193] is amended as follows.

2

In the heading to Part 1, for “Authority” substitute “Financial Conduct Authority and the Prudential Regulation Authority”.

3

(1) Section 1[^f00194] (functions in relation to friendly societies) is amended as follows.

(2) In subsection (1), for “Financial Services Authority (“the Authority”)” substitute “Financial Conduct Authority (“the FCA”)”.

(3) After subsection (1), insert—

(1A) The function in subsection (1)(c) is also a function of the Prudential Regulation Authority (“the PRA”).

(4) In subsection (2)—

(a) for “Authority also has” substitute “FCA and the PRA also have”; and

(b) for “it” substitute “them respectively”.

(5) For the heading, substitute “Functions of the Financial Conduct Authority and the Prudential Regulation Authority in relation to friendly societies”.

4

In section 5(3)[^f00195] (establishment of incorporated friendly societies), for “Authority” substitute “FCA”.

5

In section 6[^f00196] (incorporation of registered friendly societies), for “Authority”, in each place, substitute “FCA”.

6

In section 11(5)[^f00197] (group insurance), for “Authority” substitute “FCA or the PRA”.

7

(1) Section 14[^f00198] (investment of funds) is amended as follows.

(2) In subsection (3)(a), for “Authority under section 138” substitute “appropriate authority under Part 9A”.

(3) In subsections (5), (6) and (10), for “Authority”, in each place, substitute “appropriate authority”.

(4) After subsection (10), insert—

(10A) The PRA must send to the FCA a copy of any notice it serves under subsection (6) or (10).

(5) In subsection (12), for “Authority” substitute “FCA”.

8

(1) Section 20[^f00199] (dissolution by consent) is amended as follows.

(2) In subsections (6) and (8), in each place, for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(3) In subsection (10), for “Authority” substitute “appropriate authority”.

(4) In subsection (12), for “Authority” substitute “FCA”.

9

In section 21(2)[^f00200] (voluntary winding up), for “Authority”—

(a) in the first place, substitute “FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) in the second place, substitute “FCA”.

10

(1) Section 22[^f00201] (winding up by court: grounds and petitioners) is amended as follows.

(2) In subsection (2), for “(3) below” insert “(2A), (2B) or (3)”.

(3) In paragraph (a) of subsection (2), for “Authority” substitute “FCA”.

(4) After paragraph (a) of subsection (2), insert—

(aa) the PRA;

(5) After subsection (2), insert—

(2A) The FCA may only present a petition under subsection (2) in respect of a society which is a PRA-authorised person after consulting the PRA. (2B) The PRA may only present a petition under subsection (2)— (a) in respect of a society which is a PRA-authorised person; and (b) after consulting the FCA.

11

In section 24(6)[^f00202] (continuation of long term business), for “Authority”, in each place, substitute “FCA or the PRA”.

12

In section 25(4)[^f00203] (power of court to declare dissolution void), for “Authority”—

(a) in the first place, substitute “FCA and, if the society is a PRA-authorised person, the PRA”; and

(b) in second place, substitute “FCA”.

13

(1) Section 26[^f00204] (cancellation of registration) is amended as follows.

(2) For “Authority”, in each place, substitute “FCA”.

(3) After subsection (4) insert—

(4A) The FCA must consult the PRA before cancelling under subsection (1), (2) or (3) the registration of a society which is a PRA-authorised person.

14

In section 29[^f00205] (notification of officers) and in the heading to that section, for “Authority”, in each place, substitute “FCA”.

15

In section 37[^f00206] (restriction of combinations of business), for “Authority”, in each place, substitute “appropriate authority”.

16

In the cross-heading before section 51, for “Authority” substitute “FCA and PRA”.

17

(1) Section 52[^f00207] (applications to court) is amended as follows.

(2) For subsection (1), substitute—

(1) If the FCA has reason to believe that any of the conditions mentioned in subsection (2) is satisfied, it may, after consulting the PRA if the society is a PRA-authorised person— (a) present a petition to the High Court for the winding up of the society under the applicable winding up legislation; (b) make an application to the High Court for an order under subsection (5). (1A) If the PRA has reason to believe that any of the conditions mentioned in subsection (2) is satisfied in relation to a society which is a PRA-authorised person, it may, after consulting the FCA— (a) present a petition to the High Court for the winding up of the society under the applicable winding up legislation; (b) make an application to the High Court for an order under subsection (5).

(3) In subsection (2), for “subsection (1) above” substitute “subsections (1) and (1A)”.

(4) Omit subsection (3).

(5) In subsection (6), for “Authority” substitute “FCA”.

(6) In subsection (7), for “Authority whether or not it” substitute “FCA and the PRA whether or not either of them”.

18

(1) Section 54[^f00208] (supervision of activities of subsidiaries etc.) is amended as follows.

(2) In subsections (2) and (3), for “Authority” substitute “FCA or the PRA”.

(3) In subsection (6)—

(a) for “Authority” substitute “FCA or the PRA”; and

(b) after “direction”, in each place, insert “issued by it”.

(4) After subsection (6), insert—

(6A) The FCA must consult the PRA before issuing a direction under this section to a PRA-authorised person or varying such a direction. (6B) The PRA must consult the FCA before issuing or varying a direction under this section.

(5) For subsection (7), substitute—

(7) If a society requests the FCA or the PRA to notify the society as to whether, in the opinion of that authority, it has complied with a direction issued by that authority, the FCA or the PRA (as the case may be) must comply with the request. (7A) The PRA must send a copy to the FCA of any direction, notice, final notice or notification it issues under this section.

(6) In subsection (9), for “Authority” substitute “FCA”.

19

In section 55(2)[^f00209] (supervision of group insurance business), for “Authority” substitute “FCA or the PRA”.

20

(1) Section 58A[^f00210] (notices, hearings and appeals) is amended as follows.

(2) In subsections (1), (2), (3) and (4), for “Authority” substitute “FCA or the PRA”.

(3) In subsection (8)(d), for “Authority” substitute “FCA or PRA”.

21

In section 62[^f00211] (powers to obtain information and documents)—

(a) for “Authority or”, in each other place, substitute “FCA, the PRA or”; and

(b) for “Authority”, in each other place, substitute “FCA or the PRA”.

22

In section 62A(1)[^f00212] (entry of premises under warrant), for “Authority” substitute “FCA or the PRA”.

23

(1) Section 63A[^f00213] (disclosure of information) is amended as follows.

(2) For subsection (1)(b)(i), substitute—

(i) the FCA; (ia) the PRA;

(3) In subsections (1)(b)(ii) and (iii) and (2)(b), for “Authority” substitute “FCA or the PRA”.

24

In section 65[^f00214] (investigations), for “Authority”, in each place, substitute “FCA or the PRA”.

25

In the heading to section 65, for “Authority” substitute “FCA or PRA”.

26

In sections 66[^f00215] (inspections and special meetings: general), for “Authority”, in each place, substitute “FCA or the PRA”.

27

In section 67[^f00216] (inspections: supplementary provisions), for “Authority”, in each place, substitute “FCA or the PRA”.

28

In section 74B[^f00217] (names to be stated in copies of auditor’s report), omit, in each place, “to the Authority”.

29

In section 74C[^f00218] (circumstances in which names may be omitted), for “the Authority”, in each place, substitute “the FCA and, if the society is a PRA-authorised person, the PRA”.

30

In section 76[^f00219] (approval and signing of accounts), omit, in each place, “to the Authority”.

31

For section 77(1)(a) (information on appointed actuary to be annexed to balance sheet), substitute—

(a) is furnished under section 78 to the FCA and, if the society is a PRA-authorised person, the PRA; (aa) is furnished to either the FCA or the PRA at its request;

32

(1) Section 78[^f00220] (laying and furnishing of accounts and reports) is amended as follows.

(2) In subsections (1)(b), (2)(b), (3) and (4), for “Authority” substitute “FCA and, if the society is a PRA-authorised person, the PRA”.

(3) In subsection (8), for “Authority” substitute “FCA”.

33

In section 81(2) [^f00221] (complaints by members of friendly societies), for “Authority”, in each place, substitute “FCA”.

34

(1) Section 85[^f00222] (amalgamation of friendly societies) is amended as follows.

(2) In subsection (2)(d), for “Authority” substitute “appropriate authority”.

(3) In subsection (3), for “Authority”—

(a) in the first place, substitute “FCA or the PRA”; and

(b) in the second place, substitute “FCA”.

(4) For subsection (4A), substitute—

(4A) If, on the transfer date, each of the societies whose amalgamation was confirmed has permission under Part 4A of the Financial Services and Markets Act 2000, the appropriate regulator (within the meaning of section 55A of that Act) must, with effect from that date, give their successor such permission under that Part as it considers appropriate, subject to such requirements as it considers appropriate, and must notify the successor of the permission by giving the successor a decision notice under that Act.

(5) In subsection (4B), for “subsection (9) of section 52 of that Act by virtue of paragraph (a) of that subsection” substitute “subsection (5) of section 55V of that Act by virtue of paragraph (a) or (b) of that subsection”.

(6) In subsection (4C)—

(a) for “section 55”, substitute “section 55Z1”; and

(b) for “Part IV”, substitute “Part 4A”.

(7) In subsection (4D), for “prevents the Authority from taking action specified in a decision notice” substitute “prevents the action specified in a decision notice from being taken”.

(8) In subsection (5), for “Authority” substitute “FCA”.

35

(1) Section 86[^f00223] (transfer of engagements by or to friendly society) is amended as follows.

(2) In subsection (2)(e) and (3)(b), for “Authority” substitute “appropriate authority”.

(3) After subsection (3), insert—

(3A) The PRA must consult the FCA before giving its consent under subsection (3)(b).

(4) In subsection (4)—

(a) for “Authority” substitute “appropriate authority”; and

(b) for “it” substitute “the FCA”.

(5) In subsections (6) and (7), for “Authority” substitute “FCA”.

(6) In subsection (12), for “Part IV” substitute “Part 4A”.

36

(1) Section 87[^f00224] (actuary’s report as to margin of solvency) is amended as follows.

(2) In subsection (2)—

(a) in paragraph (b), for “Authority under section 138” substitute “appropriate authority under Part 9A”; and

(b) in the closing words of that subsection, for “Authority” substitute “appropriate authority”.

(3) In subsection (3), for “Authority”, in each place, substitute “appropriate authority”.

37

In section 88(2) and (3)[^f00225] (actuary’s report on transfer of long term business), for “Authority”, in each place, substitute “appropriate authority”.

38

(1) Section 89[^f00226] (power to alter requirements for transfer by friendly society) is amended as follows.

(2) Except as provided in sub-paragraph (5), for “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (1), insert—

(1A) The PRA must consult the FCA before giving a direction under this section.

(4) After subsection (6), insert—

(6A) The PRA must send to the FCA a copy of any direction it issues under this section.

(5) In subsection (7), for “Authority” substitute “FCA”.

(6) In the heading, for “Authority” substitute “appropriate authority”.

39

(1) Section 90[^f00227] (power to effect transfer of engagements) is amended as follows.

(2) In subsections (1) and (2), for “Authority”, in each place, substitute “appropriate authority”.

(3) After subsection (2), insert—

(2A) The PRA must consult the FCA before giving a direction under this section.

(4) In subsections (3) to (7), for “Authority”, in each place, substitute “appropriate authority”.

(5) For subsection (8), substitute—

(8) If the PRA gives a direction, it must send a copy of the direction to the FCA. (8A) The FCA must— (a) keep a copy of a direction issued under this section (whether by the FCA or by the PRA); (b) register that copy; and (c) issue a registration certificate to the transferee. (8B) The registration certificate must specify a date as the transfer date for the transfer.

(6) In subsections (10) and (11), for “Authority” substitute “FCA”.

(7) In the heading, for “Authority” substitute “appropriate authority”.

40

(1) Section 91[^f00228] (conversion of friendly society into company) is amended as follows.

(2) In subsection (2)(c), for “Authority” substitute “appropriate authority”.

(3) After subsection (2), insert—

(2A) The PRA must consult the FCA before giving a confirmation under this section.

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