Building Societies Act 1986

25 The Investor Protection Fund. U.K.

(1) The Fund shall consist of—

(a) contributions levied from [F1 participating institutions] under section 26;

(b) moneys borrowed by the Board under section 26(14);

(c) income credited to the Fund in accordance with subsection (3) below;

(d) payments made to the Board under subsection (6) below; and

(e) money credited to the Fund in accordance with section 29.

(2) The moneys constituting the Fund from time to time shall be placed by the Board in an account with the Bank of England.

(3) So far as possible, the Bank of England shall invest moneys placed with it under subsection (2) above in Treasury bills; and any income from moneys so invested shall be credited to the Fund.

[F2 (3A) In subsection (3) above, the reference to Treasury bills includes a reference to bills and other short-term instruments issued by the government of another EEA State and appearing to the Bank of England to correspond as nearly as may be to Treasury bills:]

(4) The administrative expenses of the Board shall be defrayed out of the Fund.

(5) There shall be chargeable to the Fund—

(a) payments to meet adminstrative expenses of the Board in accordance with subsection (4) above;

(b) moneys required for the repayment of the Board’s borrowings, and interest thereon, under section 26(14); and

(c) payments to investors under section 27 and any expenses incurred in connection with the making of such payments;

(d) payments to contributory societies under section 29(7);

and, in the protective scheme provisions of this Part—

• [F3 “authorised institution” means an institution authorised under the Banking Act 1987]

• “the expenses attributable to the insolvency”, with reference to a [F4 participating institution] insolvency, means all the sums chargeable to the Fund under [F5 paragraphs (a) to (c)] above in respect of that insolvency except that, in the case of payments to meet administrative expenses of the Board, it means so much only of those expenses as the Board determines shall be attributed to the insolvency; and

• “insolvency payments to investors” means the payments under section 27 referred to in paragraph (c) above, and “insolvency payment” has a corresponding meaning; and

• F6 . . .

(6) The Commission shall, at the request of the Board, make payments to it towards the administrative expenses of the Board.

(7) In so far as the Board authorises [F7 the Bank of England or]any [F8 authorised institution] or building society to receive on its behalf any contributions levied by the Board and to make on its behalf any of the insolvency payments to investors out of the sums so received, the sums so received need not be paid into the Fund and payments need not be made out of the Fund but shall be treated as if they were respectively comprised in and charged on the Fund and shall be accounted for accordingly

Textual Amendments

F1 Words in s. 25(1)(a) substituted (1.7.1995) by S.I. 1995/1442, reg. 37(1) (with transitional and transitory provisions in regs. 53(2), 54(2))

F2 S. 25(3A) inserted (1.7.1995) by S.I. 1995/1442, reg. 37(2) (with transitional and transitory provisions in regs. 53(2), 54(2))

F3 Definition inserted by Banking Act 1987 (c. 22, SIF 10), s. 108(1), Sch. 6 para. 26(2)

F4 Words in s. 25(5) substituted (1.7.1995) by S.I. 1995/1442, reg. 37(3) (with transitional and transitory provisions in regs. 53(2), 54(2))

F5 Words in s. 25(5) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 5(1); S.I. 1997/1427, art. 2(k)(n)(i)

F6 Definitions repealed by Banking Act 1987 (c. 22, SIF 10), s. 108, Sch. 6 para. 26(2), Sch. 7 Pt. I

F7 Words in s. 25(7) inserted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 5(2); S.I. 1997/1427, art. 2(k)(n)(i)

F8 Words substituted by Banking Act 1987 (c. 22, SIF 10), s. 108(1), Sch. 6 para. 26(3)

Modifications etc. (not altering text)

C1 Ss. 24-26: power to repeal conferred (9.6.1997) by 1997 c. 32, s. 32(5)(a); S.I. 1997/1427, art. 2(g)

C2 S. 25 extended (1.1.1993) by S.I. 1992/3218, reg. 82(1), Sch. 10 Pt. I para. 22(b)