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Building Societies Act 1986

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SCHEDULES

F1SCHEDULE 1E+W+S+N.I.

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

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Amendments (Textual)

F1Sch. 1 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2) Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2(1)

Sections 5, 93, 94 and 97.

SCHEDULE 2E+W+S+N.I. Establishment, Incorporation and Constitution of Building Societies

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Modifications etc. (not altering text)

C3Sch. 2 modified (3.1.1995) by 1994 c. 40, ss. 17(3), 82(2)

C4Sch. 2 applied (with modifications) (7.4.2010) by The Building Societies (Financial Assistance) Order 2010 (S.I. 2010/1188), arts. 1(2), 8

Part IE+W+S+N.I. General

Requirements for establishmentE+W+S+N.I.

1(1)Any ten or more persons may establish a society under this Act by taking the following steps—E+W+S+N.I.

(a)agreeing upon the purpose or principal purpose of the society and upon the extent of its powers in a memorandum the provisions of which comply with the requirements of this Part of this Schedule;

(b)agreeing upon rules for the regulation of the society which comply with the requirements of this Part of this Schedule;

(c)sending to the [F4FCA] [F5three] copies of the memorandum and the rules, each copy signed by at least ten of those persons (or, if there are only ten, by all of them) and by the intended secretary.

(2)Where copies of the memorandum and rules are sent to the [F4FCA] in accordance with sub-paragraph (1)(c) above, the [F4FCA] , if satisfied that—

(a)the provisions of the memorandum are in conformity with this Act and any instruments under it,

(b)the rules are in conformity with this Act,

(c)the intended name of the society is not, in its opinion, undesirable,

shall register the society and issue it with a certificate of incorporation.

(3)On registering a building society under sub-paragraph (2) above, the [F4FCA] shall—

(a)retain and register one copy of the memorandum and of the rules,

(b)return another copy to the secretary of the society, together with a certificate of registration, and

(c)keep another copy, together with a copy of the certificate of incorporation, and of the certificate of registration of the memorandum and the rules, in the public file of the society.

F6[(4)In this Act “memorandum”, in relation to a building society, means the memorandum of the purpose and the extent of the powers of the society including the record of any alteration under paragraph 4 below.]

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Amendments (Textual)

F5Words in Sch. 2 para. 1(1)(c) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(b) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F6Sch. 2 Pt. I para. 1(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(2); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

The memorandumE+W+S+N.I.

2[F7(1)The memorandum of a building society shall state the purpose or principal purpose of the society to be that of making loans which are secured on residential property and are funded substantially by its members.E+W+S+N.I.

(2)The memorandum of a building society shall specify—

(a)the name of the society and the address of its principal office;

(b)any purposes of the society other than that mentioned in sub-paragraph (1) above; and

(c)the powers of the society.]

(4)The provisions of the memorandum of a building society, as read with the provisions of ths Act as in force for the time being, are binding upon—

(a)each of the members and officers of the society; and

(b)all persons claiming on account of a member or under the rules;

and all such members, officers and persons so claiming and all persons dealing with the society shall be taken to have notice of those provisions.

[F8(5)Where any adoptable power conferred by virtue of an instrument under a provision of this Act ceases, by reason of the amendment or revocation of the instrument, to be available to building societies or building societies of any description, every society affected by the amendment or revocation shall annex to its memorandum a note of the fact that, as from the operative date of the instrument, it no longer has that power and shall send a copy of the note to the [F9Authority] which shall keep the copy in the public file of the society.]

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Amendments (Textual)

F7Sch. 2 Pt. I para. 2(1)(2) substituted for Sch. 2 Pt. I para. 2(1)-(3) (1.12.1997 in specified cases and for specified purposes and otherwise ) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F8Sch. 2 Pt. I para. 2(5) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(3), 47(3), Sch. 7 para. 56(4), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxiii)(cc)(xviii)

F9Words in Sch. 2 para. 2(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 13(1), Sch. 3 Pt. II para. 200(a); S.I. 2001/3538, art. 2(1)

The rulesE+W+S+N.I.

3(1)The rules of a building society shall provide for the matters specified in the Table in sub-paragraph (4) below.E+W+S+N.I.

(2)The rules of a building society are binding upon each of the members and officers of the society and on all persons claiming on account of a member or under the rules; and all such members, officers and persons (but no others) shall be taken to have notice of the rules.

(3)Nothing in this paragraph shall be taken to authorise any provision to be made which is inconsistent with this Act or an instrument made under it by F10. . . the Treasury or to affect the operation of any provision of this Act making rules void to any specified extent.

(4)The Table referred to in sub-paragraph (1) above is as follows:—

TABLE OF MATTERS TO BE COVERED BY THE RULES

  • 1. The name of the society and the address of its principal Office.

  • 2. The manner in which the [F11funds of the society are] to be raised.

  • 3. The manner in which the terms are to be determined on which shares are to be issued and the manner in which shareholders are to be informed of changes in the terms on which their shares are held.

  • 4. Whether any preferential or deferred shares are to be issued and, if so, within what limits.

  • 5. The manner in which [F12loans] are to be made and repaid, and the conditions on which a borrower may redeem the amount due from him before the end of the period for which the [loan] was made.

  • 6. The manner in which losses are to be ascertained and provided for.

  • 7. The manner in which membership is to cease.

  • 8. The manner of remunerating the auditors.

  • 9. As respects directors—

    • (a) the manner of electing them and whether they may be co-opted;

    • (b) any conditions which must be satisfied with respect to the holding of shares in the society if a person is to become, or is to remain, a director;

    • (c) the manner of remunerating and, where it is not to be fixed by resolution at the annual general meeting, the maximum amount of the remuneration to be paid to, directors; and

    • (d) the circumstances in which pensions may be awarded to persons by virtue of their office as director and the method of determining the terms of such pensions.

  • 10. The powers and duties of the board of directors.

  • 11. The custody of the mortgage deeds and other securities belonging to the society.

  • 12. The form, custody and use of the society’s common seal.

  • 13. The calling and holding of meetings and, in particular—

    • (a) the right of members to requisition meetings;

    • (b) the right of members to move resolutions at meetings;

    • (c) the manner in which notice of any resolutions to be moved at meetings is to be given to members;

    • (d) the procedure to be observed at meetings;

    • (e) the form of notice for the convening of a meeting and the manner of its service;

    • (f) the voting rights of members, the right to demand a poll and the manner in which a poll is to be taken.

  • 14. The entitlement of members to participate in the distribution of any surplus assets after payments to creditors [F13on the dissolution by consent] of the society.

  • [F1415. The entitlement of members, on the winding up of the society, to participate in the distribution of any surplus assets after payments are made in satisfaction of the society’s liabilities to creditors and shareholding members under the companies winding up legislation as modified by Parts 1 to 3 of Schedule 15 to this Act.]

[F15(5)Nothing in the rules of a society shall prevent the service of a notice or other document by the society—

(a)by sending it electronically to an electronic address notified for the purpose in accordance with express provision made by this Act; or

(b)by its publication on a web site in accordance with any such provision.]

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Amendments (Textual)

F10Words in Sch. 2 para. 3(3) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F11Words in Sch. 2 Pt. I para. 3(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(5)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F12Words in Sch. 2 Pt. I para. 3(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(5)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

Requirements for alteration of purpose, powers and rulesE+W+S+N.I.

4[F16(1)A building society may by special resolution alter its purposes, alter its powers or alter its rules.]E+W+S+N.I.

(2)Where a building society alters its purpose or powers or its rules under this paragraph, it shall send to the [F17FCA]

(a)three copies of a record of the alteration signed by the secretary; and

(b)a statutory declaration by the secretary that the alteration was effected by a resolution passed as a special resolution and that the record is a true record of the resolution.

(3)On altering its purpose or powers or its rules under this paragraph the building society shall determine the date on which it intends the alteration to take effect; and the record of the alteration shall specify that date (in this paragraph referred to as “the specified date”).

(4)Where copies of a record of an alteration of a building society’s purpose, powers or rules are sent to the [F18FCA] under sub-paragraph (2) above and the [F18FCA] is satisfied that the alteration is in conformity with this Act and (where applicable) any instruments under it, the [F18FCA] shall, [F19subject to paragraph 19] below—

(a)retain and register one of the copies,

(b)return another to the secretary of the society together with a certificate of registration of the alteration, and

(c)keep another copy, together with a copy of the certificate of registration of the alteration, in the public file of the society.

(5)An alteration of the purpose or powers or of the rules of a building society under this paragraph shall take effect on the specified date or, if registration of the alteration is not effected under sub-paragraph (4) above until a later date, that later date.

(6)Any provision in the rules of a building society that the memorandum or rules may be altered without passing a special resolution shall be void.

(7)If a building society arranges for the publication in consolidated form of its rules or memorandum as altered for the time being, it shall send a copy to the [F20FCA] and the [F20FCA]

(a)shall keep the copy in the public file of the society, but

(b)shall not register the copy.

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

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Amendments (Textual)

F16Sch. 2 Pt. I para. 4(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(6); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F19Words in Sch. 2 Pt. I para. 4(4) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(3), 47(3), Sch. 7 para. 56(7), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxiii)(cc)(xviii)

Modifications etc. (not altering text)

C5Sch. 2 para. 4(1)(3) modified (3.1.1995) by 1994 c. 40, ss. 17(2), 82(2)

MembershipE+W+S+N.I.

5[F21(1)The rules of a building society shall provide that no person shall be a member of the society unless he is a shareholding member or a borrowing member or both.E+W+S+N.I.

(2)In this Act, in relation to a building society—

  • borrowing member” means, subject to sub-paragraphs (2A) and (2B) and paragraph 29(2) below, an individual who is indebted to the society—

    (a)

    in respect of a loan which is fully secured on land; or

    (b)

    if the rules of the society so provide, in respect of a loan which is (within the meaning of the rules) substantially secured on land;

  • shareholding member” means a person who holds a share in the society.

(2A)If the rules of a building society so provide, an individual shall cease to be a borrowing member at any time if at that time the society—

(a)takes possession of, or exercises its power of sale in relation to, the whole or any part of the land on which the loan is secured; or

(b)obtains an order for foreclosure absolute or, in Scotland, foreclosure in respect of the whole or any part of that land.

(2B)Unless the rules of a building society so provide, an individual shall not be a borrowing member at any time if at that time the loan is owed to the society in equity rather than at law.]

(3)A person who is a minor—

(a)may, if the rules do not otherwise provide, be admitted as a member of a building society and give all necessary receipts; but

(b)may not [F22propose a resolution,] vote or hold any office in the society; and

(c)may not [F23join in requisitioning a special meeting or] nominate, or join in nominating, a person for election as a director of the society.

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Amendments (Textual)

F21Sch. 2 Pt. I para. 5(1)-(2B) substituted for Sch. 2 para. 5(1)(2) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(1), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

F22Words in Sch. 2 Pt. I para. 5(3)(b) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(2)(a), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

F23Words in Sch. 2 Pt. I para. 5(3)(c) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(2)(b), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

Liability of membersE+W+S+N.I.

[F246(1)The liability at any time of a shareholding member of a building society shall be limited to the amount which, at that time, has been actually paid, or is in arrear, on his shares in the society.E+W+S+N.I.

(2)The liability at any time of a borrowing member of a building society shall be limited to the amount which, at that time, is payable under the mortgage or other security by which his indebtedness to the society in respect of the loan is secured.]

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Amendments (Textual)

F24Sch. 2 Pt. I para. 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(3), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)(aa)(i)(ii)

Joint shareholdersE+W+S+N.I.

7(1)Two or more persons may jointly hold shares in a building society and the following provisions of this paragraph shall apply to any shares so held.E+W+S+N.I.

(2)In this paragraph, in relation to any shares jointly held, “representative joint holder” means that one of the joint holders who is named first in the records of the society.

(3)Except where the rules of the society otherwise provide, any notice or other document may be given or sent by the society to the joint holders by being given or sent to the representative joint holder; but this sub-paragraph shall not prevent any of the joint holders from exercising the rights under this Act of a member of a building society to obtain from the society on demand a copy of F25... the annual accounts and the annual business statement.

(4)For the purpose of determining—

(a)who is entitled to vote in an election of directors of the society;

(b)who is qualified to vote on a resolution of the society, and

(c)where it is relevant, the number of votes a person may then give,

the shares shall be treated as held by the representative joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares (other than the representative joint holder) shall not be entitled to vote in any such election or qualified to vote on any such resolution.

(5)For the purposes of sections 87 and 93 to 102 the shares shall be treated as held by the representative joint holder alone; and accordingly a person who is a member of the society by reason only of being a joint holder of those shares (other than the representative joint holder) shall not be regarded as a member of the society for the purposes of those sections.

[F26(5A)In its application to section 100, sub-paragraph (5) above shall have effect subject to the provisions of section 102A.]

(6)The representative joint holder (but none of the other joint holders) shall have the right to join in making an application under section 56 and any reference in that section to the total membership of a building society shall be construed accordingly.

(7)In the register to be maintained under paragraph 13 below the entry of that one of the joint holders who is the representative joint holder shall indicate that fact.

(8)The joint holders shall be entitled to choose the order in which they are named in the records of the society.

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Amendments (Textual)

F25Words in Sch. 2 para. 7(3) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 7(b)

F26Sch. 2 para. 7(5A) inserted (1.5.1995 with application as mentioned in s. 2(2) of the amending Act) by 1995 c. 5, s. 1(2)

Joint borrowersE+W+S+N.I.

8(1)Where [F27a loan] secured on land is made by a building society to two or more persons jointly the following provisions of this paragraph shall apply to their rights as borrowing members of the society.E+W+S+N.I.

(2)In this paragraph, in relation to any rights of theirs as borrowing members, “representative joint borrowers” means that one of the joint borrowers who is named first in the records of the society.

(3)Except where the rules of the society otherwise provide, any notice or other document may be given or sent by the society to the joint borrowers by being given or sent to the representative joint borrowers; but this sub-paragraph shall not prevent any of the joint borrowers from exercising the rights under this Act of a borrowing member of a building society to obtain from the society on demand a copy of F28... the annual accounts and the annual business statement.

(4)For the purpose of determining—

(a)who is entitled to vote in any election of directors of the society, and

(b)who is qualified to vote on a resolution of the society,

the rights of the joint borrowers as borrowing members of the society shall be treated as the rights of the representative joint borrower alone; and accordingly a person who is a member of the society by reason only of being a joint borrower (other than the representative joint borrower) shall not be entitled to vote in any such election or qualified to vote on any such resolution.

(5)For the purposes of sections 87 and 93 to 102 the rights of the joint borrowers as borrowing members of the society shall be treated as the rights of the representative joint borrower alone; and accordingly a person who is a member of the society by reason only of being a joint borrower (other than the representative joint borrower) shall not be regarded as a borrowing member of the society for the purposes of those sections.

(6)The representative joint borrower (but none of the other joint borrowers) shall have the right to join in making an application under section 56 and any reference in that section to the total membership of a building society shall be construed accordingly.

(7)In the register to be maintained under paragraph 13 below the entry of that one of the joint borrowers who is the representative joint borrower shall indicate that fact.

(8)The joint borrowers shall be entitled to choose the order in which they are named in the records of the society.

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Amendments (Textual)

F27Words in Sch. 2 para. 8(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(8); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

F28Words in Sch. 2 para. 8(3) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 7(b)

Use and change of nameE+W+S+N.I.

9(1)The common seal of a building society shall bear the registered name of the society.E+W+S+N.I.

F29[(2)Every building society shall paint or affix, and keep painted or affixed, its registered name on the outside of every office or place in which its business is carried on, in a conspicuous position and in letters easily legible.

(2A)Every building society shall state its registered name in legible characters in all of the following documents, [F30in every electronic communication containing any of the following documents and on every web site on which any of the following documents is published,] namely—

(a)its business letters;

(b)its account statements, including those relating to deposit, share, loan or mortgage accounts;

(c)its passbooks;

(d)its notices and publications, including all documents sent to members;

(e)its invoices and receipts;

(f)its letters of credit and any instruments creating or acknowledging its indebtedness;

(g)its contracts, agreements, mortgages and deeds; and

(h)its bills of exchange, promissory notes, endorsements, cheques and orders for money or goods.]

(3)A building society may change its name by special resolution.

(4)Where a society changes its name in accordance with this paragraph notice of the change of name shall be sent to the [F31FCA] and, unless the [F31FCA] is of the opinion that the changed name is undesirable, the [F31FCA] shall register the notice of the change of name and give the society a certificate of registration.

(5)A change of name shall take effect on the date on which the certificate of registration under sub-paragraph (4) above is issued or on such later date as may be specified in the certificate.

(6)The [F31FCA] shall keep a copy of the certificate of registration issued under sub-paragraph (4) above in the public file of the society.

(7)A change of name shall not affect the rights and obligations of the society or of any of its members or of any other person concerned.

[F32(8)For the purposes of this paragraph and paragraphs 10 to 10C below “registered name”, in relation to a building society, means the name of the society which is for the time being registered with the [F31FCA] .]

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Amendments (Textual)

F29Sch. 2 Pt. I para. 9(2)(2A) substituted for Sch. 2 para. 9(2) (1.12.1997) by 1997 c. 32, s. 36(1); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F32Sch. 2 Pt. I para. 9(8) inserted (1.12.1997) by 1997 c. 32, s. 36(2); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

Offences relating to society’s nameE+W+S+N.I.

[F3310(1)If a building society does not—E+W+S+N.I.

(a)paint or affix its registered name; or

(b)keep its registered name painted or affixed,

as required by paragraph 9(2) above, the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(2)A building society which, without reasonable excuse, does not comply with paragraph 9(2A) above shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(3)If an officer of a building society or a person on its behalf issues or authorises the issue of any document mentioned in paragraph 9(2A)(a) to (g) above, in which the society’s registered name is not stated as required by that paragraph, he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(4)If an officer of a building society or a person on its behalf signs or authorises to be signed on behalf of the building society any document mentioned in paragraph 9(2A)(h) above in which the society’s registered name is not stated as required by that paragraph—

(a)he shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and

(b)he shall be further personally liable to the holder of the bill of exchange, promissory note, cheque or order for money or goods for the amount of it (unless it is duly paid by the building society).

(5)If a building society fails to send to the [F34FCA] a notice which it is required to send to it under paragraph 9(4) above, the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and so shall any officer who is also guilty of the offence.]

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Amendments (Textual)

F33Sch. 2 Pt. I para. 10 substituted (1.12.1997) by 1997 c. 32, s. 36(3); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F35[Restrictions on business names]E+W+S+N.I.

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Amendments (Textual)

F35Cross-heading inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

[F3610A(1)This paragraph and paragraph 10B below apply where a building society carries on business under a name other than the following, namely—E+W+S+N.I.

(a)its registered name;

(b)its registered name with the omission of the words “Building Society”; and

(c)its registered name with an addition which merely indicates that the business is carried on in succession to a former building society with which it has merged.

(2)The society shall not, without the written approval of the [F37FCA] , carry on business under a name which—

(a)would be likely to give the impression that the business is connected with Her Majesty’s Government or with any local authority, or

(b)includes any word or expression for the time being specified in regulations made under sub-paragraph (3) below.

(3)The [F38Treasury may], by regulations—

(a)specify words or expressions for the use of which as or as part of a business name the approval of the [F39FCA] is required by sub-paragraph (2) above, and

(b)in relation to any such word or expression, specify a Government department or other body for the purposes of sub-paragraph (4) below.

(4)Where the society proposes to carry on business under a name which is or includes any such word or expression, and a government department or other body is specified under sub-paragraph (3)(b) above in relation to that word or expression, the society shall—

(a)request (in writing) the relevant body to indicate whether (and if so why) it has any objections to the proposal, and

(b)submit to the [F40FCA] a statement that such a request has been made and a copy of any response received from the relevant body.

(5)For the purposes of this paragraph “local authority” means—

(a)any local authority within the meaning of the M4Local Government Act 1972, the Common Council of the City of London or the Council of the Isles of Scilly;

(b)any local authority within the meaning of the M5Local Government etc. (Scotland) Act 1994;

(c)any district council within the meaning of the M6Local Government Act (Northern Ireland) 1972.]

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Amendments (Textual)

F36Sch. 2 Pt. I paras. 10A-10C inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F38Words in Sch. 2 para. 10A(3) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(e) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C6 Sch. 2 para. 10A(3); Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; 2001/3538 art. 2(1)

Marginal Citations

F41[Use of business names: required disclosure]E+W+S+N.I.

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Amendments (Textual)

F41Cross-heading inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

[F4210B(1)Paragraph 9(2A) above shall have effect as if after the words “in legible characters” there were inserted the words “ which are reasonably prominent ”.E+W+S+N.I.

(2)The society shall in all documents mentioned in paragraph 9(2A) above state in legible characters an address in the United Kingdom at which service of any document relating in any way to the business will be effective.

(3)The society shall also in any premises where the business is carried on and to which the members of the society, the customers of the business or suppliers of any goods or services to the business have access, display in a prominent position so that it may easily be read by such persons a notice containing the society’s registered name and the address mentioned in sub-paragraph (2) above.

(4)The society shall secure that the registered name and the address mentioned in sub-paragraph (2) above is immediately given, by written notice, to any person with whom anything is done or discussed in the course of the business and who asks for the registered name or the address.

(5)The [F43Treasury may], by regulations require a notice under sub-paragraph (3) or (4) above to be displayed or given in a specified form.]

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Amendments (Textual)

F42Sch. 2 Pt. I paras. 10A-10C inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F43Words in Sch. 2 para. 10B(5) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(e) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C7Sch. 2 para. 10B(5); Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

F44[Use of business names: supplementary]E+W+S+N.I.

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Amendments (Textual)

F44Cross-heading inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

[F4510C(1)A building society which contravenes paragraph 10A(2) above shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.E+W+S+N.I.

(2)A building society which, without reasonable excuse, does not comply with paragraph 9(2A) or 10B(2), (3) or (4) above, or any regulations made under paragraph 10B(5) above, shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale.

(3)Where paragraph 10A above applies any legal proceedings brought by the society to enforce a right arising out of a contract made in the course of the business in respect of which the society was, at the time the contract was made, in breach of paragraph 9(2A) or 10B(2), (3) or (4) above shall be dismissed if the defendant (or, in Scotland, the defender) to the proceedings shows—

(a)that he has a claim against the plaintiff (pursuer) arising out of that contract which he has been unable to pursue by reason of the plaintiff’s (pursuer’s) breach of paragraph 9(2A) or 10B(2), (3) or (4) above, or

(b)that he has suffered some financial loss in connection with the contract by reason of the latter’s breach of paragraph 9(2A) or 10B(2), (3) or (4) above,

unless the court before which the proceedings are brought is satisfied that it is just and equitable to let the proceedings continue.

(4)Sub-paragraph (3) above is without prejudice to the right of any person to enforce such rights as he may have against another person in any proceedings brought by that person.

(5)Regulations made under paragraph 10A(3) or 10B(5) above shall be made by statutory instrument subject to annulment by resolution of either House of Parliament.

(6)Such regulations may contain such transitional provisions and savings as the [F46Treasury think] fit, and may make different provision for different cases or classes of case.]

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Amendments (Textual)

F45Sch. 2 Pt. I paras. 10A-10C inserted (1.12.1997) by 1997 c. 32, s. 36(4); S.I. 1997/2668, art. 2, Sch. Pt. I(h)

F46Words in Sch. 2 para. 10C(6) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(f) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C8Sch. 2 para. 10C(6): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2(1)

Change of principal officeE+W+S+N.I.

11(1)A building society may change its principal office—E+W+S+N.I.

(a)in such manner as its rules direct, or

(b)if there is no such direction in the rules, [F47by an ordinary resolution].

(2)Notice of any such change and of the date of it shall, within seven days after the change, be sent to the [F48FCA] and the [F48FCA] shall keep the notice in the public file of the society.

(3)It is not necessary to alter the memorandum or rules of a building society by reason only that its principal office is changed.

(4)If a building society fails to send to the [F48FCA] a notice which it is required to send to it under sub-paragraph (2) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

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Amendments (Textual)

F47Words in Sch. 2 Pt. I para. 11(1)(b) substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 56(9); S.I. 1997/1427, art. 2(k)(n)(xv)

Societies to supply copies of rules etc.E+W+S+N.I.

12(1)A building society shall, on demand, give a copy of its statutory documents—E+W+S+N.I.

(a)free of charge, to any member of the society to whom a copy of those documents has not previously been given, and

(b)to any other person, upon payment of such fee as the society may require, not exceeding the prescribed amount.

(2)The reference in sub-paragraph (1) above to a copy of a building society’s statutory documents is a reference to—

(a)a printed copy of the society’s rules for the time being, with a copy of the certificate of incorporation of the society annexed to it, and

(b)a printed copy of the memorandum of the society for the time being.

(3)If a building society fails to comply with the requirements of sub-paragraph (1) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(4)In sub-paragraph (1) above the “prescribed amount” means £1 or such other amount as the [F49Treasury prescribe] by order made by statutory instrument.

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Amendments (Textual)

F49Words in Sch. 2 para. 12(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(g) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C9Sch. 2 para. 12(4): Functions of Building Societies Commission transferred (1.12.2001) to Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; 2001/3538 art. 2(1)

Register of membersE+W+S+N.I.

13[F50(1)Every building society shall maintain a register of members showing—E+W+S+N.I.

(a)the name and [F51postal] address of each member; and

(b)whether each member is a shareholding member or a borrowing member or both.]

[F52(1A)Where a member has notified to the building society an electronic address for the purpose of receiving notices or documents required to be sent by the society under this Act, the register shall show—

(a)the electronic address in addition to the postal address of the member; and

(b)the purposes for which the electronic address has been notified.]

(2)The register shall be kept at the principal office or at such other place or places as the directors think fit.

(3)If a building society contravenes sub-paragraph (1) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(4)For the purposes of this Act “registered address” in relation to a member of a building society, means—

(a)the [F53postal] address shown in the register maintained under this paragraph, except in a case where paragraph (b) below applies;

(b)where the member has requested that communications from the society be sent to some other [F54postal] address, that other address.

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Amendments (Textual)

F50Sch. 2 Pt. I para. 13(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 56(10); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiii)

Exception to duties to send documentsE+W+S+N.I.

14(1)A building society is not obliged by any provision of this Act or its rules to send a notice or other document to a member in whose case the society has reason to believe that communications sent to him at his registered address are unlikely to be received by him.E+W+S+N.I.

(2)Where the requirement relates to notice of a meeting or postal ballot of the society, the society must, instead, comply with the advertising requirements of paragraph 35 below.

Right of members to obtain particulars from the registerE+W+S+N.I.

15[F55(1)At any time when a building society—E+W+S+N.I.

(a)has had its [F56permission under [F57Part 4A] of the Financial Services and Markets Act 2000 to accept deposits cancelled]; and

(b)has not [F58subsequently been given such permission],

a member of the society shall, subject to sub-paragraph (1A) below, have the right to obtain, from the register kept under paragraph 13 above, the names and addresses of members of the society, for the purpose of communicating with them on a subject relating to the affairs of the society.

(1A)Sub-paragraph (1) above shall not apply unless the member in question—

(a)is qualified under the rules of the society to join in a members’ requisition for a special meeting, or to join in nominating a person for election as a director; or

(b)would be so qualified if any requirements as to length of time a person must have been a shareholding or borrowing member were omitted.

(2)If, at any time not falling within sub-paragraph (1) above, a member of a building society who is qualified under the rules of the society to join in a members’ requisition for a special meeting, or to join in nominating a person for election as a director, makes a written application to the [F59FCA] for the right to obtain names and addresses from the register, the [F59FCA]

(a)if satisfied that the applicant—

(i)requires that right for the purpose of communicating with members of the society on a subject relating to its affairs; and

(ii)has not, since making the application, voluntarily ceased to be a member of the society; and

(b)having regard to the interests of the members as a whole and to all the other circumstances; F60...

F60(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

[F61(2A)The [F59FCA] may charge a reasonable fee for considering an application under sub-paragraph (2) above.]

(3)Any direction under sub-paragraph (2) above may be given subject to such limitations or conditions as the [F59FCA] may think fit.

[F62(3A)The FCA must consult the PRA before giving a direction under sub-paragraph (2).]

(4)Before giving a direction under sub-paragraph (2) above, the [F59FCA] shall give particulars of the application to the building society and shall afford the society an opportunity of making representations with respect to the application; and the [F59FCA] shall, if the applicant or the society so requests, afford to the applicant and to the society an opportunity of being heard by it.

(5)A member entitled under this paragraph to obtain the names of members of a building society may apply in writing to the society, describing in the application the subject on which he proposes to communicate with other members of the society; and the society shall give him all necessary information as to the place or places where the register, or part of it, is kept, and reasonable facilities for inspecting the register and taking a copy of any names and addresses in the register.

(6)A building society shall not be obliged to disclose to a member making an application under this paragraph any particulars contained in the register other than the names of the members and their addresses, and may construct the register in such a way that it is possible to disclose the names and addresses to inspection without disclosing any such other particulars.

[F63(7)No information obtained under sub-paragraph (1) or (2) above or this sub-paragraph and relating to a member of the society may be disclosed except—

(a)with the consent of that member; or

(b)in the case of information obtained under sub-paragraph (1) or (2) above, for purposes connected with the purpose mentioned in that paragraph.

(8)Any person who discloses information in contravention of sub-paragraph (7) above shall be liable—

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

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

F64(9). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F64(10). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F64(11). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .]

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Amendments (Textual)

F55Sch. 2 Pt. I para. 15(1)(1A)(2) substituted for Sch. 2 para. 15(1)(2) (9.6.1997) by 1997 c. 32, s. 37(1); S.I. 1997/1427, art. 2(i)

F56Words in Sch. 2 para. 15(1)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(h)(i) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F58Words in Sch. 2 para. 15(1)(b) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(h)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F60Sch. 2 para. 15(c) and the word “and" immediately preceding repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b),13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F61Sch. 2 para. 15(2A) inserted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(h)(v) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F63Sch. 2 Pt. I para. 15(7)-(11) inserted (9.6.1997) by 1997 c. 32, s. 37(2); S.I. 1997/1427, art. 2(i)

F64Sch. 2 para 15(9)-(11) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F65[Part IIE+W+S+N.I. Capacity of society and power of directors to bind it]

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Amendments (Textual)

F65Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F66 Capacity of society not limited by its memorandum]E+W+S+N.I.

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Amendments (Textual)

F66Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F6716(1)The validity of an act done by a building society shall not be called into question on the ground of lack of capacity by reason of anything included in the society’s memorandum.E+W+S+N.I.

(2)A member of a building society may bring proceedings to restrain the doing of an act which but for sub-paragraph (1) above would be beyond the society’s capacity; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.

(3)It remains the duty of the directors of a building society to observe any limitations on their powers flowing from the society’s memorandum; and action by the directors which but for sub-paragraph (1) above would be beyond the society’s capacity may only be ratified by the society by special resolution.

(4)A resolution ratifying such action shall not affect any liability incurred by the directors or any other person; relief from any such liability must be agreed to separately by special resolution.]

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Amendments (Textual)

F67Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F68 Power of directors to bind society]E+W+S+N.I.

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Amendments (Textual)

F68Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F6917(1)In favour of a person dealing with a building society in good faith, the power of the board of directors to bind the society, or authorise others to do so, shall not be limited by reason of anything included in the society’s constitution, that is to say, its memorandum and rules.E+W+S+N.I.

(2)For this purpose—

(a)a person deals with a building society if he is a party to any transaction or other act to which the society is a party;

(b)a person shall not be regarded as acting in bad faith by reason only of his knowing that an act is beyond the powers of the directors under the society’s constitution; and

(c)a person shall be presumed to have acted in good faith unless the contrary is proved.

(3)The references above to limitations on the directors’ powers under the society’s constitution include limitations deriving from a resolution of the society passed at a general meeting or special meeting or on a postal [F70or electronic] ballot, or from any agreement between the members of the society.

(4)Notwithstanding anything in paragraph 3(2) above, sub-paragraph (1) above applies in relation to members of the society, and to persons claiming on account of members or under the rules of the society, as it applies in relation to other persons.

(5)Sub-paragraph (1) above does not affect any right of a member of the society to bring proceedings to restrain the doing of an act which is beyond the powers of the directors; but no such proceedings shall lie in respect of an act to be done in fulfilment of a legal obligation arising from a previous act of the society.

(6)Nor does that sub-paragraph affect any liability incurred by the directors, or any other person, by reason of the directors’ exceeding their powers.]

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Amendments (Textual)

F69Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

F71[ No duty to enquire as to capacity of society etc.]E+W+S+N.I.

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Amendments (Textual)

F71Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

[F7218(1)A party to a transaction with a building society is not bound to enquire as to whether it is permitted by the society’s constitution or as to any limitation on the powers of the board of directors to bind the society or authorise others to do so.E+W+S+N.I.

(2)Notwithstanding anything in paragraph 3(2) above, sub-paragraph (1) above applies in relation to members of the society as it applies in relation to other persons.]

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Amendments (Textual)

F72Sch. 2 Pt. II substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 3(2), 47(3), Sch. 1; S.I. 1997/2668, art. 2, Sch. Pt. II(c)

Powers of central officeE+W+S+N.I.

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

Part IIIE+W+S+N.I. Meetings, Resolutions and Postal Ballots

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Modifications etc. (not altering text)

C10Sch. 2 Pt. III (paras. 20–36) excluded (temp.) by S.I. 1986/2168, art. 3(1)(2)

C11Sch. 2 Pt. III (paras. 20–36) modified by S.I. 1987/426, art. 4

Annual general meetingE+W+S+N.I.

20(1)Subject to sub-paragraph (2) below, every building society shall hold a meeting in the first four months of each financial year as its annual general meeting (in addition to any other meetings in that year) and shall specify the meeting as such in the notices calling it.E+W+S+N.I.

(2)Sub-paragraph (1) above does not require a building society to hold an annual general meeting in the calendar year in which it is incorporated.

(3)If default is made in holding a meeting in accordance with sub-paragraph (1) above, the [F73FCA] may—

(a)call, or direct the calling of, an annual general meeting in that financial year, and

(b)give such ancillary or consequential directions as it thinks expedient, including directions modifying or supplementing the operation of the rules of the society in relation to the calling, holding and conducting of the meeting.

(4)Notwithstanding anything in the rules of a building society, the business which may be dealt with at the annual general meeting shall include any resolution whether special or not.

(5)In any case where default is made—

(a)in holding an annual general meeting in accordance with sub-paragraph (1) above, or

(b)in complying with any directions of the [F73FCA] given under sub-paragraph (3) above,

the building society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

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Amendments (Textual)

F74[Special meeting on members’ requisition]E+W+S+N.I.

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Amendments (Textual)

F74Sch. 2 Pt. III para. 20A and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 25, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(q)

[F7520A(1)On a members’ requisition, a building society shall—E+W+S+N.I.

(a)duly call a special meeting, and specify the meeting as such in the notice calling it; and

(b)if so required by the requisition, send to each member entitled to receive notice of the meeting a copy of a statement of not more than 500 words with respect to the matters to be dealt with at the meeting;

and where a meeting is so called no business shall be conducted at the meeting other than that stated in the notice calling it or (where applicable) that mentioned in sub-paragraph (8)(b) below.

[F76(1A)Where a copy of a statement is required to be sent to a member under sub-paragraph (1)(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 (1B) are satisfied.

(1B)The requirements of this sub-paragraph are satisfied in the case of a statement if—

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

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

(c)no later than one working day after the statement is first capable of being accessed on a web site that person is notified F77... of—

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

(ii)the address of that web site,

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

(d)a copy of the statement is published continuously on that web site throughout the period beginning (so far as practicable) at the same time as copies of the statement are sent to members in accordance with sub-paragraph (1)(b), and ending with the conclusion of the meeting.]

(2)A members’ requisition is a requisition of not less than the requisite number of members of the society; and that number is [F78500] or such lesser number as may be specified in the rules of the society.

(3)The requisition—

(a)must state the objects of the meeting, be signed by the requisitionists and be deposited at the society’s principal office; and

(b)may consist of several documents in like form each signed by one or more requisitionists and each after the first deposited within three months of the date on which the first was deposited.

(4)Where the requisition consists of several documents, the date of its deposit shall be taken to be the date on which the document signed by the requisitionist making up the requisite number is deposited at the society’s principal office.

(5)The rules of the society may require a requisitionist—

(a)to state his full name and address;

(b)to fulfil one or other of the following conditions, namely—

(i)to have been a shareholding member for a specified period and to hold, or to have held at any time during that period, shares in the society to such value (not greater than the prescribed amount) as is specified in the rules; and

(ii)to have been a borrowing member for a specified period and to owe to the society, or to have owed to the society at any time during that period, a mortgage debt of such amount (not greater than the prescribed amount) as is so specified; and

(c)to identify a share or mortgage account with the society which will evidence the fact that he fulfils one or other of those conditions;

and in this sub-paragraph “specified period” means such period (not more than two years) before the date of the requisition as is specified in the rules.

(6)No objection may be made by virtue of such rules to the requisition or, where the requisition consists of several documents, to any of those documents unless it is made within 14 days of the requisition or document being deposited at the society’s principal office.

(7)The rules of the society may also require a sum of money, not exceeding [F79£50] per requisitionist, to be deposited with the requisition; and, where any money is so deposited, it shall be forfeited to the society, or returned to the persons who deposited it, as provided by the rules.

(8)The rules shall not provide for any deposited money to be forfeited to the society except—

(a)where a quorum is not present within half an hour after the time appointed for the meeting; or

(b)where and to the extent that those eligible to vote at the meeting decide by ordinary resolution that the money should be applied to defray the whole or any part of the expenses of holding the meeting.

(9)If the rules of a building society so provide, sub-paragraph (1) above does not require the society—

(a)to call a special meeting if the only or main object of the meeting is to move a resolution in substantially the same terms as any resolution which has been defeated at a meeting or on a postal [F80or electronic] ballot during the period beginning with the third annual general meeting before the date on which the requisition is deposited at the society’s principal office; or

(b)to call a special meeting to be held during the period of four months beginning one month after the end of its financial year.

(10)Sub-paragraph (1)(b) above does not require the society to send copies of a statement to members entitled to receive notice of a meeting in any case where—

(a)publicity for the statement would be likely to diminish substantially the confidence in the society of investing members of the public; or

(b)the rights conferred by sub-paragraph (1)(b) above are being abused to seek needless publicity for defamatory matter or for frivolous or vexatious purposes;

and that provision shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of a statement which does not relate directly to the affairs of the society.

(11)Where sub-paragraph (1)(b) above requires copies of a statement to be sent to members entitled to receive notice of a meeting, the proceedings at the meeting are not invalidated by—

(a)the accidental omission to send a copy of the statement to a member entitled to receive one, or

(b)the non-receipt of such a copy by such a member.

[F81(11A)Where, in a case in which sub-paragraph (1A)(b) is relied on for compliance with a requirement of sub-paragraph (1)(b)—

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

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

the failure shall not invalidate the proceedings at the meeting.]

(12)The [F82appropriate authority] shall hear and determine any dispute arising under sub-paragraph (10)(a) above, whether on the application of the society or of any other person who claims to be aggrieved.

(13)The [F83Treasury may], by order substitute—

(a)for the number specified in sub-paragraph (2) above; or

(b)for the sum specified in sub-paragraph (7) above,

such other number or sum as appears to [F84them] to be appropriate; and an order under this subsection may make such supplementary, transitional and saving provision as appears to the [F85Treasury] to be necessary or expedient.

(14)The power to make an order under sub-paragraph (13) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.]

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Amendments (Textual)

F75Sch. 2 Pt. III para. 20A and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 25, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(q)

F77Words in Sch. 2 para. 20A(1B)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(2)

F78Figure in Sch. 2 para. 20A substituted (1.12.1999) by S.I. 1999/3031, art. 2

F83Words in Sch. 2 para. 20A(13) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(k)(i) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F84Word in Sch. 2 para. 20A(13) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(k)(ii) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F85Word in Sch. 2 para. 20A(13) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(k)(iii) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C12Sch. 2 para. 20A(13): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617 arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

F86[Failure to comply with members’ requisition]E+W+S+N.I.

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Amendments (Textual)

F86Sch. 2 Pt. III para. 20B and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 26, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(r)

F87[20B(1)This paragraph applies where a members’ requisition is deposited at a building society’s principal office and the society is not relieved of the obligation to call a special meeting by paragraph 20A(9)(a) above.E+W+S+N.I.

(2)Subject to sub-paragraph (5) below, if the society does not within 28 days from the date of the deposit of the requisition duly call a meeting to be held within 63 days from that date—

(a)the requisitionists, or any proportion of them exceeding one half, may themselves call a meeting to be held within five months from that date; and

(b)no business shall be conducted at a meeting so called other than that stated in the notice calling it or (where applicable) that mentioned in paragraph 20A(8)(b) above.

(3)A meeting called under sub-paragraph (2) above by requisitionists shall be called in the same manner, as nearly as may be, as that in which meetings are to be called by the society.

(4)If—

(a)paragraph 20A(1)(b) above requires the society to send to each member entitled to receive notice of the meeting a copy of a statement of not more than 500 words with respect to the matters to be dealt with at the meeting; and

(b)subject to sub-paragraph (5) below, that requirement is not complied with within 28 days from the date of the deposit of the requisition,

the requisitionists, or any proportion of them exceeding one half, may themselves send a copy of the statement to each such member.

(5)If the rules of the society make such provision as is mentioned in paragraph 20A(9)(b) above, any days falling within the period there mentioned shall be disregarded in determining any period for the purposes of sub-paragraph (2) or (4)(b) above.

(6)Any reasonable expenses incurred by the requisitionists by reason of the failure of the society to call a meeting, or to comply with such a requirement as is mentioned in sub-paragraph (4) above, shall be repaid to the requisitionists by the society.

(7)Any sum so repaid shall be recoverable by the society from such of the directors of the society as were responsible for the failure (whether by the retention of fees or other remuneration in respect of services or otherwise).]

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Amendments (Textual)

F87Sch. 2 Pt. III para. 20B and cross-heading inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 26, 47(3); S.I. 1997/2668, art. 2, Sch. Pt. II(r)

Length of notice for calling meetingsE+W+S+N.I.

21(1)Any provision contained in the rules of a building society shall be void to the extent that it provides for the calling of a meeting of the society (other than an adjourned meeting) by less than 21 days’ notice expiring with the date of the meeting or, if earlier, the date specified by the society, under its rules, as the final date for the receipt of [F88appointments of] proxies to vote at the meeting.E+W+S+N.I.

(2)A meeting of a building society may be called by 21 days’ notice, unless the rules provide for longer notice of the meeting to be given.

(3)Where notice of a meeting is given in accordance with sub-paragraph (2) above, the notice shall be taken for the purposes of this Act or any other enactment to have been duly given according to the rules of the building society.

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Amendments (Textual)

Persons entitled to notice of meetingsE+W+S+N.I.

22(1)Subject to the provisions of this Part of this Schedule, notice of a meeting of a building society shall be given to every member of the society who would be eligible to vote at the meeting if the meeting were held on the date of the notice.E+W+S+N.I.

F89[(2)Notice of the meeting shall, subject to those provisions, be given also to every person—

(a)who becomes a shareholding or borrowing member of the society after the date of the notice under sub-paragraph (1) above and before the specified date; or

(b)who, being such a member at the date of that notice, attains the age of 18 after that date and on or before the date of the meeting,

and who would (in either case) be eligible to vote at the meeting if he remained such a member until the date of the meeting.

(2A)In sub-paragraph (2) above “the specified date” means the date specified by the society as the final date for the receipt of [F90appointments of] proxies to vote at the meeting.]

(3)Accidental omission to give notice of a meeting to, or non-receipt of notice of a meeting by, any person entitled to receive notice of the meeting does not invalidate the proceedings at that meeting.

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Amendments (Textual)

F89Sch. 2 Pt. III para. 22(2)(2A) substituted for Sch. 2 Pt. III para. 22(2) (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(2); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

Modifications etc. (not altering text)

C13Sch. 2 Pt. III paras. 22, 34 excluded by S.I. 1987/426, art. 3

[F91Transmission of notice of meeting to an electronic addressE+W+S+N.I.

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Amendments (Textual)

F91Sch. 2 paras. 22A, 22B and cross-headings inserted (20.3.2003) by The Building Societies Act 1986 (Electronic Communications) Order 2003 (S.I. 2003/404), arts. 1(1), 14

22A(1)Where a notice of a meeting of a society is required to be sent to a person under any provision of this Act, the notice may be sent to him electronically only if it is sent to an electronic address notified by him to the society for the purpose.E+W+S+N.I.

(2)In a case in which this paragraph is relied on for compliance with a requirement to send a notice, a notice given in accordance with this paragraph is to be treated as given to a person on the day that the notice is transmitted.

Publication of notice of meeting on a web siteE+W+S+N.I.

22B(1)A requirement under any provision of this Act to send a notice of a meeting of the society to a person shall also be treated as satisfied if the conditions set out in sub-paragraph (2) are satisfied.E+W+S+N.I.

(2)The conditions of this sub-paragraph are satisfied in the case of a notice of a meeting of a society if—

(a)the society and the person have agreed that notices which are required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the notice in question

(c)that person is notified F92... of—

(i)the publication of the notice 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 notice 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.

(3)A notification given for the purposes of sub-paragraph (2)(c) must—

(a)state that it concerns a notice of a meeting of the society served in accordance with this Act;

(b)specify the place, date and time of the meeting; and

(c)state whether the meeting is to be an annual or special general meeting.

(4)In a case in which this paragraph is relied on for compliance with a requirement to send a notice, a notice given in accordance with this paragraph is to be treated as given to a person on the day that person is notified in compliance with sub-paragraphs (2)(c) and (3).

(5)Where, in a case in which this paragraph is relied on for compliance with a requirement to send a notice of a meeting—

(a)a notice is published for a part, but not all, of the period mentioned in sub-paragraph (2)(d), but

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

the failure shall not invalidate the proceedings of the meeting.]

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Amendments (Textual)

F92Words in Sch. 2 para. 22B(2)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(3)

Members’ entitlement to vote on resolutionsE+W+S+N.I.

23[F93(1)A member of a building society is entitled to vote—E+W+S+N.I.

(a)on an ordinary resolution or a special resolution if he was, at the end of the last financial year before the voting date, and is, on that date, a shareholding or borrowing member of the society;

(b)on a shareholding members’ resolution, if he was, at the end of that year, and is, on that date, a shareholding member of the society; and

(c)on a borrowing members’ resolution if he was, at the end of that year, and is, on that date, a borrowing member of the society,

but subject, in either case, to paragraphs 5(3), 7(4) and 8(4) above [F94and sub-paragraph (5A) below] and, in the case of paragraphs (a) and (b), to sub-paragraph (3) below.]

(2)Subject to the following provisions of this paragraph, any provision in the rules of a building society is void to the extent that it would have the effect of restricting the rights conferred on members by sub-paragraph (1) above.

F95[(3)If the rules of the society so provide, a shareholding member is not entitled to vote on an ordinary resolution or a special resolution as such a member, or to vote on a shareholding members’ resolution—

(a)if he did not have a qualifying shareholding at the qualifying shareholding date; or

(b)if he ceased to hold shares at some time between that date and the voting date.

(4)Where a building society’s rules make such provision as is mentioned in sub-paragraph (3)(a) above, a shareholding member shall be taken to have had a qualifying shareholding at the qualifying shareholding date if he had such a holding—

(a)at the end of the last financial year before the voting date, except where paragraph (b) below applies; or

(b)in a case where the voting date falls during that part of a financial year which follows the conclusion of the annual general meeting commenced in that year, at the beginning of the period of 56 days immediately preceding the voting date for members voting in person at a meeting or, as the case may be, on a postal [F96or electronic] ballot.]

(5)For the purposes of this paragraph a member of a building society has a “qualifying shareholding” at any time if at that time he holds shares in the society to a value not less than the prescribed amount or such lesser amount as may be specified in the rules.

[F97(5A)If the rules of the society so provide, a member who is also an employee of the building society shall not be entitled to exercise, directly or indirectly, any voting rights that the member may have with respect to a relevant resolution.

(5B)For the purposes of sub-paragraph (5a), a relevant resolution is a resolution to approve an increase in the maximum ratio between the fixed and variable components of remuneration as permitted by Article 94(1)(g)(i) of the capital requirements directive (whereby the level of the variable component may be set at up to 200% of the level of the fixed component), where the member referred to would be directly affected by the increase.

(5C)In sub-paragraph (5B) the “capital requirements directive” means Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.]

(6)In this paragraph “voting date”, with reference to any resolution, means—

(a)the date of the meeting at which the resolution is intended to be moved, except where paragraph (b) or (c) below applies;

(b)where voting on the resolution is to be conducted by postal ballot [F98or by electronic ballot in the case of which not all the voting is electronic (within the meaning of paragraph 33A of Schedule 2)], the date which the society specifies as the final date for the receipt of completed ballot papers;

[F99(bb)in the case of an election conducted by electronic ballot in which all the voting is electronic voting (within the meaning of that paragraph), the date which the society [F100specifies] as the final date for registering votes;]

(c)in the case of a member appointing a proxy to vote instead of him at a meeting, the date which the society specifies as the final date for the receipt of [F101appointments of] proxies to vote on that resolution.

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Amendments (Textual)

F93Sch. 2 Pt. III para. 23(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F95Sch. 2 Pt. III para. 23(3)(4) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(4); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

ProxiesE+W+S+N.I.

24(1)A member of a building society who is entitled to attend and vote at a meeting of the society—E+W+S+N.I.

(a)may appoint another person (whether a member of the society or not) as his proxy, to attend and, subject to sub-paragraph (3) below, to vote at the meeting instead of him, and

(b)may direct the proxy how to vote at the meeting.

[F102(1A)A form for the appointment of a proxy—

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

(b)is to be treated as having been sent electronically to a member, where the conditions in sub-paragraph (1B) below are satisfied.

(1B)The conditions are that—

(a)the society and the member have agreed that a form may instead be accessed by the member on a website;

(b)F103... the member is notified of—

(i)the publication of the form on a website;

(ii)the address of that website; and

(iii)the place on that website where the form may be accessed, and how it may be accessed; and

(c)the form is published on the website throughout the period beginning with the day on which the member is notified in accordance with paragraph (b) above and ending with the last day specified for the return of appointments of proxies.

(1C)If the form is absent from the website for part of the period referred to in sub-paragraph (1B)(c), the absence is to be disregarded if it is wholly attributable to circumstances that it would not be reasonable to have expected the society to prevent or avoid.

(1D)Where a form for the appointment of a proxy is made available by a society on a website in accordance with subsection (1A)(b), the society may also make available on the website a facility for completing the form and returning the appointment in an electronic communication (but see paragraph 34).]

(2)Where the society, under its rules, specifies a final date for the receipt of [F104appointments of] proxies to vote at a meeting, a person appointed a proxy by a member who at that date is entitled to attend and vote at the meeting may act as his proxy at the meeting whether or not the member ceases to be so entitled after that date.

(3)A proxy is entitled to vote on a poll but, subject to any provision in the rules of the building society, not otherwise.

(4)In every notice calling a meeting of a building society there shall appear with reasonable prominence a statement—

(a)that a member entitled to attend and vote may appoint a proxy (or, where it is allowed, one or more proxies) to attend and vote at the meeting instead of him;

(b)that the proxy need not be a member of the society; and

(c)that the member may direct the proxy how to vote at the meeting.

[F105(4A)Every form for the appointment of a proxy sent by a building society to persons entitled to notice of a meeting of the society must contain provision enabling that person to direct the proxy how to vote at the meeting.]

(5)If default is made in complying with sub-paragraph (4) above in respect of a meeting of a building society, [F106or in complying with sub-paragraph (4A) above in respect of a form of appointment of a proxy,] the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale, and so shall any officer who is also guilty of the offence.

(6)Any provision contained in the rules of a building society shall be void in so far as it would have the effect of requiring [F107the appointment of a proxy, or any] document necessary to show the validity of, or otherwise relating to, the appointment of a proxy, to be received by the society or any other person more than seven days before a meeting or adjourned meeting in order that the appointment may be effective at the meeting or adjourned meeting.

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Amendments (Textual)

F102Sch. 2 para. 24(1A)-(1D) substituted for Sch. 2 para. 24(1A)(1B) (12.4.2011) by The Mutual Societies (Electronic Communications) Order 2011 (S.I. 2011/593), arts. 1(1), 2(1)

F103Words in Sch. 2 para. 24(1B)(b) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(4)

F105Sch. 2 Pt. III para. 24(4A) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(5); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F106Words in Sch. 2 Pt. III para. 24(5) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(6); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

Right to demand a pollE+W+S+N.I.

25(1)Any provision contained in the rules of a building society shall be void in so far as it would have the effect either—E+W+S+N.I.

(a)of excluding the right to demand a poll at a meeting of the society on any question other than the election of a chairman of the meeting or the adjournment of the meeting, or

(b)of making ineffective a demand for a poll on any such question which is made by not less than ten members having the right to vote at the meeting.

(2)[F108Any appointment of] a proxy to vote at a meeting of a building society shall be taken also to confer authority to demand or join in demanding a poll; and for the purposes of sub-paragraph (1) above a demand by a person as proxy of a member shall be the same as the demand by the member.

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Amendments (Textual)

Special resolutionsE+W+S+N.I.

26No resolution of a building society shall be passed as a special resolution[F109, or as a shareholding members’ resolution,] unless it is required to be so passed by or under any provision of this Act or by the rules of the society.

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Amendments (Textual)

F109Words in Sch. 2 Pt. III para. 26 inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(7); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

27(1)A resolution of a building society shall be a special resolution when it has been passed by not less than three-quarters of the number of the members of the society qualified to vote on a special resolution and voting either—E+W+S+N.I.

(a)in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a special resolution has been duly given; or

(b)in a postal [F110or electronic] ballot on the resolution of which notice specifying that the resolution will not be effective unless it is passed as a special resolution has been duly given.

(2)In any rules made by a building society on or after 1st October 1960, whether before or after the commencement of this Act, “special resolution”, unless the context otherwise requires, means a special resolution as defined in this paragraph.

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Amendments (Textual)

[F11127AA resolution of a building society shall be a shareholding members’ resolution when it has been passed by not less than three-quarters of the number of the shareholding members of the society—

(a)qualified to vote on a shareholding members’ resolution; and

(b)voting in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a shareholding members’ resolution has been duly given.]

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Amendments (Textual)

F111Sch. 2 Pt. III para. 27A inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(8); S.I. 1997/2668, art. 2, Sch. Pt. II((w)(z)(xxxiv)

Borrowing members’ resolutionsE+W+S+N.I.

28No resolution of a building society shall be passed as a borrowing members’ resolution unless it is required to be so passed by or under any provision of this Act or by the rules of the society.

29[F112(1)A resolution of a building society shall be a borrowing members’ resolution when it has been passed by a majority of the borrowing members of the society voting in person or by proxy on a poll on the resolution at a meeting of the society of which notice specifying the intention to move the resolution as a borrowing members’ resolution has been duly given.]E+W+S+N.I.

F113[(2)For the purposes of this Part of this Schedule, an individual who is indebted to a building society in respect of a loan fully secured on land is not a borrowing member of the society at any time if at that time the amount of his mortgage debt is less than the prescribed amount.]

(3)Where a borrowing member’s resolution approving a transfer of engagements by a building society is moved, only those borrowing members whose mortgages are to be transferred shall be entitled to vote on the resolution.

(4)In any rules made by a building society after the commencement of this paragraph, “borrowing members’ resolution”, unless the context otherwise requires, means a borrowing members’ resolution as defined in this paragraph.

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Amendments (Textual)

F112Sch. 2 Pt. III para. 29(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(9); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F113Sch. 2 Pt. III para. 29(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 2(4), 47(3) (with s. 46(1), Sch. 8 paras. 4, 5); S.I. 1997/2668, art. 2, Sch. Pt. II(b)

Transfer resolutionsE+W+S+N.I.

30(1)The transfer resolutions required for the purposes of section 97 for the approval by members of a building society of a transfer of its business are two resolutions, of which—E+W+S+N.I.

(a)one is passed as a borrowing members’ resolution, and

(b)the other (“the requisite shareholders’ resolution”) is passed in accordance with sub-paragraphs (2) to (5) below.

(2)In a case where the successor is to be a specially formed company, the requisite shareholders’ resolution—

(a)must be passed as a [F114shareholding members’ resolution], and

(b)must be passed on a poll on which not less than [F11550] per cent. of the members of the society qualified to vote on a [F114shareholding members’ resolution] voted;

and the notice of the resolution required by [F116paragraph 27A above] must specify that the resolution will not be effective unless both of the requirements specified in this sub-paragraph are fulfilled.

(3)Subject to any direction under sub-paragraph (5) below, in a case where the successor is to be an existing company, the requisite shareholders’ resolution must be passed as a [F117shareholding members’ resolution] and either—

(a)must be passed by not less than 50 per cent. of the members qualified to vote on a [F117shareholding members’ resolution], or

(b)must be passed by the holders, being members qualified to vote on a [F117shareholding members’ resolution], of shares in the society to a value, on the voting date, representing not less than 90 per cent. of the total value of the shares held on that date by the members so qualified to vote;

and, in either case, the resolution must be a resolution in relation to which the notice required by [F118paragraph 27A] above includes a statement specifying that the resolution will not be effective unless either of the above requirements is fulfilled [F119has been duly given].

(4)If the [F120appropriate authority] considers it expedient, in relation to a transfer of the business of a building society to an existing company, to do so for the purpose of protecting the investments of the shareholders of or depositors with the society, the [F121it] may give a direction under sub-paragraph (5) below.

[F122(4A)If the appropriate authority is the PRA, it must consult the FCA before giving a direction under sub-paragraph (5).]

(5)A direction under this sub-paragraph is a direction that, for the purposes of the transfer of business specified in the direction, the requisite shareholders’ resolution is to be effective if it is passed as a [F123shareholding members’ resolution].

(6)The Treasury F124. . . may by order amend sub-paragraph (2)(b), (3)(a) or (3)(b) above so as to substitute for the percentage for the time being specified in the subparagraph such other percentage as [F125they think] appropriate.

(7)The power to make orders under sub-paragraph (6) above is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

(8)In this paragraph “voting date”, with reference to a requisite shareholders’ resolution, has the same meaning as in paragraph 23(6) above.

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Amendments (Textual)

F114Words in Sch. 2 Pt. III para. 30(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(10)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F115Words in Sch. 2 para. 30(2)(b) substituted (5.12.1997) by S.I. 1997/2714, art. 2

F116Words in Sch. 2 Pt. III para. 30(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(10)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F117Words in Sch. 2 Pt. III para. 30(3) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(11)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F118Words in Sch. 2 Pt. III para. 30(3) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(11)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F119Words in Sch. 2 Pt. III para. 30(3) repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(3), 47(3), Sch. 7 para. 57(11)(c), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxiv)(cc)(xviii)

F121Words in Sch. 2 para. 30(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(l)(i)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F123Words in Sch. 2 Pt. III para. 30(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(12); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F124Words in Sch. 2 para. 30(6) repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

F125Words in Sch. 2 para. 30(6) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(m)(ii) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C15Sch. 2 para. 30 applied (with modifications) (5.3.2009) by The Mutual Societies (Transfers) Order 2009 (S.I. 2009/509), arts. 1(2), 3-18

Members’ right to propose and circulate resolutionsE+W+S+N.I.

31(1)If at least the requisite number of qualified members of a building society give notice to the society of their intention to have moved on their behalf a resolution, other than [F126a shareholding members’ resolution or] a borrowing members’ resolution, specified in the notice at an annual general meeting of the society, it shall be the duty of the society, subject to sub-paragraphs (4), (5) and (6) below—E+W+S+N.I.

(a)to include in the notice of the annual general meeting a notice specifying the intention to have the resolution moved on their behalf at the meeting and, where applicable, the intention to move it as a special resolution;

(b)at the request of the members intending to have the resolution moved on their behalf, to send to each member entitled to receive notice of the meeting a copy of any statement of not more than [F127500 words] with respect to the matter referred to in the resolution.

(2)For the purposes of sub-paragraph (1) above—

(a)the requisite number”—

F128[(i)in the case of a society in relation to which the difference between the total assets of the society as shown in the accounts last prepared by it under [F129section 72A or 72E] immediately before the date on which the members gave notice to the society under sub-paragraph (1) above and the aggregate of—

(aa)the liquid assets of the society as shown in those accounts in pursuance of regulations [F130under section 72C or 72G or in accordance with international accounting standards, as appropriate]; and

(bb)the fixed assets of the society as so shown,

exceeds £100 million, is [F131five hundred] or such lesser number as is specified for the purpose in the rules of the society, and]

(ii)in the case of any other society is [F132one hundred] or such lesser number as is specified for the purpose in the rules of the society;

(b)every member of a building society is a “qualified member” unless the rules make other provision for the purpose which is not rendered void under sub-paragraph (3) below.

(3)Any provision contained in the rules of a building society shall be void to the extent that it would have the effect of requiring a qualified member, for the purposes of sub-paragraph (1) above,—

F133[(a)to have been a member for more than two years ending with the qualifying date; or

(b)if he claims eligibility as a shareholding member, to hold, or to have held at any time, shares in the society to a value greater than the prescribed amount in force on the qualifying date; or

(c)if he claims eligibility as a borrowing member, to owe to the society, or to have owed to the society at any time, a mortgage debt of an amount greater than the prescribed amount in force on the qualifying date;]

and for the purposes of this sub-paragraph the qualifying date is the date on which the notice is given to the society under sub-paragraph (1) above.

(4)Sub-paragraph (1) above does not require a building society to send notices of a resolution or copies of a statement to members of the society in any case where—

(a)publicity for the resolution or, as the case may be, the statement would be likely to diminish substantially the confidence in the society of investing members of the public; or

(b)the rights conferred by sub-paragraph (1) are being abused to seek needless publicity for defamatory matter or for frivolous or vexatious purposes;

and that sub-paragraph shall not be taken to confer any rights on members, or to impose any duties on a building society, in respect of a resolution or statement which does not relate directly to the affairs of the society.

(5)If the rules of a building society so provide, sub-paragraph (1) above does not require notice of a resolution to be given to members of the society if the resolution is in substantially the same terms as any resolution which has been defeated at a meeting or on a postal [F134or electronic] ballot during the period beginning with the third annual general meeting before the date on which notice of the resolution is given to the society.

(6)No copies of a statement with respect to a resolution shall be sent to members of a building society if, on any of the grounds in sub-paragraph (4) or (5) above, the society does not give the notice of the resolution to them required by sub-paragraph (1)(a) above.

(7)The [F135PRA] shall hear and determine any dispute arising under sub-paragraph (4)(a) above, whether on the application of the building society or of any other person who claims to be aggrieved.

(8)If a building society fails to comply with the requirements of sub-paragraph (1) above where notice is duly given under that sub-paragraph, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

[F136(9)For the purposes of this paragraph “liquid assets” and “fixed assets”, in the case of societies which produce IAS individual accounts or IAS group accounts, have the same meaning as given in section 6(16).]

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Amendments (Textual)

F126Words in Sch. 2 Pt. III para. 31(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(13)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F127Words in Sch. 2 Pt. III para. 31(1) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(13)(b); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F128Sch. 2 Pt. III para. 31(2)(a)(i) substituted (1.1.1998) by S.I. 1997/2840, art. 2(2) (with transitional provisions in art. 3)

F129Words in Sch. 2 para. 31(2)(a)(i) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 8(a)

F130Words in Sch. 2 para. 31(2)(a)(i) (aa) substituted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 8(b)

F131Words in Sch. 2 para. 31(2)(a)(i) substituted (1.12.1999) by S.I. 1999/3033, art. 2

F132Words in Sch. 2 para 31(2)(a)(ii) substituted (1.12.1999) by S.I. 1999/3033 art. 2

F133Sch. 2 Pt. III para. 31(3)(a)-(c) substituted for Sch. 2 para. 31(3)(a)(b) (1.1.1998) by S.I. 1997/2840, art. 2(3) (with transitional provisions in art. 3)

F136Sch. 2 para. 31(9) inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 8(c)

Members’ resolutions: supplementary provisionsE+W+S+N.I.

32(1)Notice of a resolution given under paragraph 31(1) above must be given to the building society not later than the last day of the financial year preceding the financial year in which is held the annual general meeting at which it is intended to move the resolution; and any statement to be sent to members under paragraph 31 (1)(b) above must also be notified to the society not later than that day.E+W+S+N.I.

(2)The notices of a resolution and the copies of a statement required to be sent to members by paragraph 31(1)(a) or (b) above shall be sent to them in the same manner and (so far as practicable) at the same time as the notice of the annual general meeting at which the resolution is intended to be moved; and, where it is not practicable for them to be sent at the same time as the notice, they shall be sent as soon as practicable thereafter.

[F137(2A)Sub-paragraph (2B) applies where, in a case in which a society gives notice in accordance with paragraph 22A or 22B of this Schedule of the annual general meeting at which a resolution is intended to be moved, the notice of the resolution and the copy of a statement in respect of the resolution that are required to be sent to a member under paragraph 3 1 (1)(a) or (b) are not transmitted or published at the same time as the notice.

(2B)The requirement of sub-paragraph (2) to send a member his notice of the resolution and his copy of a statement in the same manner as the notice of the annual general meeting is satisfied if—

(a)a notice of the resolution and a copy of the statement are made available to the member in the same way as the notice; or

(b)such a notice and such a copy (without being made available to the member in that way) are sent to the member in a manner set out by the society for the purpose in the notice.

(2C)Where a notice of a resolution and copy of a statement are sent to a member electronically under sub-paragraph (2B), they must be sent to an electronic address notified by the member for the purpose.

(2D)The requirements of sub-paragraph (2) or (2B)(a) are satisfied by the publication of a notice of the resolution and a copy of the statement on a web site only if—

(a)the notice of the annual general meeting at which the resolution is intended to be moved is a notice given to that member by being published on a web site;

(b)an agreement between the society and the member to his accessing information on a web site applies to the notice of a resolution and copy of a statement for the meeting in question;

(c)the member is notified F138... of—

(i)the publication of the notice of a resolution and copy of a statement on a web site,

(ii)the address of that web site,

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

(d)the notification for the purposes of paragraph (c) is given no later than the day after the date on which the notice of a resolution and the copy of a statement are first capable of being accessed on the notified web site;

(e)that date was the same as the date on which the notice of the annual general meeting was first capable of being accessed on a web site or (in a case to which sub-paragraph (2B)(a) applies) was as soon as practicable after that date;

(f)the notice of a resolution and copy of a statement are continuously published on the notified web site for a period beginning (so far as practicable) at the same time as the notices and statements are sent to members in accordance with sub-paragraph (2), and ending with the conclusion of the annual general meeting at which the resolution is moved.]

(3)Where notices of a resolution, or copies of a statement in respect of a resolution, intended to be moved at a meeting of a building society are required to be sent to any persons, the proceedings at the meeting are not invalidated by—

(a)the accidental omission to send a notice or copy to a person entitled to receive one, or

(b)the non-receipt of a notice or copy by such a person.

[F139(3A)Where, in a case in which sub-paragraph (2D) is relied on for compliance with a requirement of sub-paragraph (2) or (2B)(a)—

(a)a notice or copy [F140is] published for a part, but not all, of the period mentioned in subparagraph (2D)(f), but

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

the failure shall not invalidate the proceedings at the meeting.]

(4)The [F141Treasury] may by order vary—

(a)the definition of “requisite number” or “qualified member” in sub-paragraph (2) of paragraph 31 above, or

(b)the descriptions of provisions which are rendered void by sub-paragraph (3) of that paragraph.

whether by the addition of any description or other provision or by the substitution or deletion of any definition, description or other provision for the time being specified or contained in that paragraph.

(5)An order under sub-paragraph (4) above shall be made by statutory instrument subject to annulment in pursu" ance of a resolution of either House of Parliament.

(6)An order under sub-paragraph (4) above may contain transitional, consequential or supplementary provision.

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Amendments (Textual)

F138Words in Sch. 2 para. 32(2D)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(5)

F141Words in Sch. 2 para. 32(4) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(o) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C16Sch. 2 paras. 32(4)(6): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

Postal ballotsE+W+S+N.I.

33(1)The rules of a building society may provide for the voting in an election of directors or on any resolution of the society [F142(other than a shareholding members’ resolution or a borrowing members’ resolution)] to be conducted in all, or in any particular, circumstances by postal ballot; F143...E+W+S+N.I.

[F144(1A)Rules made pursuant to sub-paragraph (1) may also make provision in relation to the use of electronic communications in the conduct of a postal ballot.]

(2)Where, under the rules of a society, a postal ballot is to take place, the following provisions of this paragraph have effect.

(3)Notice of a postal ballot shall be given not less than 21 nor more than 56 days before the date which the society specifies as the final date for the receipt of completed ballot papers (referred to in this paragraph as “the voting day”).

(4)Subject to the provisions of this Part of this Schedule, notice of a postal ballot shall be given to every member of the society who would be entitled to vote in the election or on the resolution if the voting date for the election or the resolution fell on the date of the notice.

[F145(5)Notice of the postal ballot shall, subject to those provisions, be given also to every person—

(a)who becomes a shareholding or borrowing member of the society after the date of the notice under sub-paragraph (4) above and before the voting day; or

(b)who, being such a member at the date of that notice, attains the age of 18 after that date and on or before the voting day,

and who would (in either case) be eligible to vote in the election or on the resolution if he remained such a member until that day.

[F146(5A)Where a notice of a postal ballot is required to be given to a person by sub-paragraph (4) or (5), the notice may be sent to him electronically only if it is sent to an electronic address notified by the person to the society for the purpose.

(5B)In a case in which notice of a postal ballot is sent electronically to an electronic address in accordance with sub-paragraph (5A), the notice is to be treated as given to a person on the day on which it is transmitted.

(5C)A requirement of sub-paragraph (4) or (5) to send a notice of a postal ballot shall also be treated as satisfied if—

(a)the society and the person have agreed that notices which are required to be sent to him may instead be accessed by him on a web site;

(b)the agreement applies to the notice in question

(c)that person is notified F147... of—

(i)the publication of the notice 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 notice is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the voting date (within the meaning of section 60(17)).

(5D)In a case in which sub-paragraph (5B) is relied on for compliance with a requirement of sub-paragraph (4) or (5), a notice of a postal ballot is to be treated as sent to a person on the day when notification is given in accordance with sub-paragraph (5C)(d).

(5E)Where, in a case in which sub-paragraph (5C) is relied on for compliance with a requirement of sub-paragraph (4) or (5)—

(a)a notice of a postal ballot is published for a part, but not all, of the period mentioned in sub-paragraph (5C)(d), but

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

the failure shall not invalidate the postal ballot.]

(6)Notice of a postal ballot—

(a)shall contain such other notices relating to the election or resolution [F148(“related notices”)], and

(b)shall be accompanied by such other documents [F149(“accompanying documents”)],

as would be required to be given or sent to a member in connection with notice of a meeting, had it been intended to hold the election or vote on the resolution at a meeting instead of by postal ballot with the exception, however, of any notice relating to voting by proxy at a meeting.

[F150(6A)Where the notice of a postal ballot is required by sub-paragraph (6) to contain a related notice or to be accompanied by an accompanying document—

(a)in a case where the notice of that ballot is given to a person electronically in accordance with sub-paragraph (5A), the related notice or accompanying document may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice of the postal ballot;

(b)in a case where notice of that ballot is given on a web site in accordance with subparagraph (5C), the requirement to send the related notice or accompanying document to that person shall also be treated as satisfied if the conditions set out in sub-paragraph (6B) are satisfied.

(6B)The conditions of this sub-paragraph are satisfied in the case of a related notice or accompanying document if—

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

(b)the agreement applies to the related notice or accompanying document in question;

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

(i)the publication of the related notice or accompanying document on a web site,

(ii)the address of that web site,

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

(d)the related notice or accompanying document is published continuously on that web site throughout the period beginning with the giving of that notification in accordance with paragraph (c) and ending with the voting date (within the meaning of section 60(17)).

(6C)Where notice of a postal ballot and any related notice or accompanying document is sent to a person electronically, that person may return the completed voting paper to the society either—

(a)by post; or

(b)electronically by sending it to an electronic address notified by the society to that person for the purpose,

unless the rules of the society make provision to the contrary.]

(7)Accidental omission—

(a)to give notice of a postal ballot, or

(b)to send any document required by sub-paragraph (6) above to accompany such a notice,

to any person entitled to receive it, or non-receipt of such a notice or document by such a person, does not invalidate the postal ballot.

[F151(7A)Where, in a case in which sub-paragraph (6A)(b) is relied on for compliance with a requirement of sub-paragraph (6)—

(a)a related notice or accompanying document is published for a part, but not all, of the period mentioned in sub-paragraph (6B)(d), but

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

the failure shall not invalidate the postal ballot.]]

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Amendments (Textual)

F142Words in Sch. 2 Pt. III para. 33(1) inserted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(14); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F145Sch. 2 Pt. III para. 33(5) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(15); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

F147Words in Sch. 2 para. 33(5C)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(3)

[F152Electronic ballotsE+W+S+N.I.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)

33A.(1)Where—E+W+S+N.I.

(a)the rules of a building society provide for a postal ballot to be conducted in any circumstances in the case of an election or resolution, and

(b)those rules do not expressly prohibit the conduct of an electronic ballot in those circumstances,

the ballot in the case of that election or resolution may, in those circumstances, be an electronic ballot instead of a postal ballot.

(2)A ballot in the case of an election or resolution is an electronic ballot if it is conducted—

(a)in accordance with the following provisions of this paragraph as to electronic voting; and

(b)in so far as it is not conducted with those provisions, as if it were a postal ballot.

(3)But voting in the case of an election or resolution may not be conducted by an electronic ballot in which all the voting is electronic voting in accordance with sub-paragraphs (8) to (10) unless the rules of the society expressly permit it.

(4)The rules of a building society may provide for voting in the case of—

(a)an election of directors, or

(b)a resolution of the society other than a share holding members' resolution or a borrowing members' resolution,

to be conducted by an electronic ballot in which all the voting is electronic voting in accordance with sub-paragraphs (8) to (10).

(5)Where voting may be conducted by electronic ballot by virtue of sub-paragraph (1) the rules of the society may contain provision supplementing rules relating to postal ballots in so far as it is necessary to provide for the conduct of electronic voting in accordance with subparagraphs (8) to (10).

(6)Where voting may be conducted by electronic ballot by virtue of sub-paragraph (1) or (3) the rules of the society may make provision as to the consequences of any irregularities occurring in the course of a ballot, including (but not restricted to) provision as to the validity of multiple votes cast by a member in the same election or on the same resolution.

(7)In the case of an electronic ballot, the society is not required to send notice of the ballot to any person if—

(a)that person has agreed, in accordance with sub-paragraph (9)(a) below, that notices of electronic ballots and a voting facility may be accessed by him on a web site; and

(b)the society notifies that person in accordance with sub-paragraph (9)(c) below.

(8)The voting of a person in an electronic ballot is electronic if—

(a)a person has access on a web site to the notice of the electronic ballot, any document which is required to accompany the notice and a facility for registering his vote;

(b)that person registers his vote by means of that facility; and

(c)the conditions set out in sub-paragraph (9) are satisfied.

(9)The conditions of this sub-paragraph are satisfied if—

(a)the society and the person have agreed that notices of electronic ballots, any document which is required to accompany the notice, and a voting facility may be accessed by him on a web site;

(b)that agreement applies to the electronic ballot and accompanying documents in question;

(c)that person is notified F153... of—

(i)the publication of the notice and documents and the availability of the voting facility on a web site,

(ii)the address of that web site, and

(iii)the place on that web site where the notice, any such documents, and the facility may be accessed, and how they may be accessed; and

(d)the notice and each such document continues to be published and the facility continues to be available on that web site throughout the period beginning with the giving of that notification and ending with the date which the society specifies as the final date for the registration of votes.

(10)A notice given for the purposes of sub-paragraph (9)(c) must—

(a)state that it concerns a notice of an electronic ballot given in accordance with this Act; and

(b)state whether the voting to be conducted by the electronic ballot is in an election or on a resolution or both.

(11)Nothing in sub-paragraph (9) shall invalidate an electronic ballot where—

(a)any notice or document that is required to be published, and any facility which is required to be made available, for the period mentioned in sub-paragraph (6)(d) is published or made available for a part, but not all, of that period, but

(b)the failure to publish that notice or document, or make that facility available, throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid.

(12)Sub-paragraphs (3) to (7) of paragraph 33 apply, with the modification specified in subparagraph (13) below, in relation to notices of an electronic ballot as they apply in relation to notices of a postal ballot.

(13)Sub-paragraph (3) of paragraph 33 has effect as if the reference to the receipt of completed ballot papers included a reference to the registration of votes by means of a voting facility on a web site.

(14)For the purposes of sub-paragraph (3) of paragraph 33 (as applied to electronic ballots by sub-paragraph (13) above), in a case in which a person is notified for the purposes of subparagraph (9)(c), a notice of an electronic ballot is treated as given to a person on the day when notification is given in accordance with that sub-paragraph.]

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Amendments (Textual)

F153Words in Sch. 2 para. 33A(9)(c) omitted (18.2.2014) by virtue of Financial Services (Banking Reform) Act 2013 (c. 33), s. 148(2), Sch. 9 para. 12(6)

Declarations to be made in proxy and ballot formsE+W+S+N.I.

34(1)If a member of a building society who purports to exercise his right—E+W+S+N.I.

(a)to appoint a proxy to vote instead of him at a meeting of the society, or

(b)to vote in a postal [F154or electronic] ballot, or

(c)to vote on a poll at a meeting of the society,

fails to make a declaration in accordance with sub-paragraph (2) below in the F155... appointment or, as the case may be, on the voting paper, the appointment made or, as the case may be, the vote cast by him is invalid.

[F156(2)A person making a declaration in pursuance of sub-paragraph (1) above shall—

(a)declare that he has attained the age of 18 years or will have attained that age on or before the voting date or, where he is voting by proxy, on or before the date of the meeting;

(b)where the vote is to be cast on a shareholding members’ resolution, declare—

(i)that on the voting date he is or, so far as he can reasonably foresee, will be a shareholder of the society; and

(ii)where the person is not entitled to vote unless he had a qualifying shareholding on the qualifying shareholding date, that he had or, so far as he can reasonably foresee, will have such a shareholding on that date;

(c)where the vote is to be cast on a borrowing members’ resolution, declare that on the voting date he is or, so far as he can reasonably foresee, will be a borrowing member of the society; and

(d)where the vote is to be cast on an ordinary or special resolution, declare either as mentioned in paragraph (b) above, or as mentioned in paragraph (c) above, or both.]

[F157(2A)Where an appointment of a proxy is [F158returned in an electronic communication in accordance with paragraph 24(1D)], the requirements of sub-paragraph (2) above are satisfied only if—

(a)the appointment incorporates the terms of the declaration required by that subparagraph; and

(b)the authenticity and integrity of the appointment is established (whether by an electronic signature or otherwise) in such manner as may have been agreed between the member and the society.

(2B)Where a member voting in a postal ballot returns a completed voting paper electronically as mentioned in sub-paragraph (6E)(b) of paragraph 33 above, the requirements of sub-paragraph (2) above are satisfied only if—

(a)the voting paper incorporates the terms of the declaration required by that subparagraph; and

(b)the authenticity and integrity of the completed paper is established (whether by electronic signature or otherwise) in such manner as may have been agreed between the member and the society.

(2C)Where a member registers a vote on a web site in accordance with sub-paragraph (8)(b) of paragraph 33A above, the requirements of sub-paragraph (2) above are satisfied only if—

(a)at the place on the web site where the voting facility is accessed, the member has confirmed the terms of the declaration specified by that sub-paragraph; and

(b)the authenticity and integrity of the member’s vote is established (whether by electronic signature or otherwise) in such a manner as may have been agreed between the member and the society.]

(3)A building society shall secure that every document issued by it for use as a voting paper [F159and every] appointment of a proxy incorporates a form of declaration under this paragraph for completion by the member using it.

[F160(3A)A building society shall ensure that—

(a)every voting paper sent by it to a member by means of an electronic communication incorporates a declaration in accordance with sub-paragraph (2) above, and

(b)every voting facility provided by it on a web site is accompanied by such a declaration,

for completion or confirmation by the member purporting to exercise his right to vote.]

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

(5)In this paragraph—

  • [F161“authenticity” and “integrity”, with reference to an electronic communication, must be construed in accordance with section 15(2) of the Electronic Communications Act 2000;

  • “electronic signature” has the same meaning as in section 7(2) of that Act;]

  • qualifying shareholding” shall be construed in accordance with paragraph 23(5) above;

  • qualifying shareholding date” has the same meaning as it has for the purposes of paragraph 23 above; and

  • voting date” has the meaning given by paragraph 23(6) above.

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Amendments (Textual)

F156Sch. 2 Pt. III para. 34(2) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 57(16); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxiv)

Modifications etc. (not altering text)

C17Sch. 2 Pt. III paras. 22, 34 excluded by S.I. 1987/426, art. 3

Advertising requirements in lieu of notice of meetings, etc.E+W+S+N.I.

35(1)The advertising requirements referred to in paragraph 14 above, in relation to notices of meetings or postal [F162or electronic] ballots of building societies, are as follows.E+W+S+N.I.

(2)Notice of the holding of the meeting or of the postal ballot must be given either—

(a)by displaying a notice in a prominent position in every branch office, or

(b)by advertisement in one or more newspapers circulating in the areas in which the members of the society reside,

according as the rules of the society provide.

(3)The notice must be given not later than 21 days before the date of the proposed meeting or, as the case may be, the final date for the receipt of completed ballot papers [F163or for the registration of votes in an electronic ballot (as the case may be)].

(4)The notice shall state where members may obtain copies of the resolutions and any statements with respect to the matter referred to in a resolution, forms relating to voting by proxy and, in the case of a postal ballot, the ballot papers[F164, or, in the case of an electronic ballot, how members may access electronic voting facilities].

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Amendments (Textual)

The prescribed amountE+W+S+N.I.

36(1)For the purposes of this Part of this Schedule, the “prescribed amount” is £100 or such other amount as the [F165Treasury by order specify] for the time being.E+W+S+N.I.

(2)The power to make an order under sub-paragraph (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(3)An order under sub-paragraph (1) above may contain transitional, consequential or supplementary provision.

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Amendments (Textual)

F165Words in Sch. 2 para. 36(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 200(p) (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C18Sch. 2 para. 36(1)(3): functions of Building Societies Commission transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. III; S.I. 2001/3538, art. 2

[F166SCHEDULE 2AE+W+S+N.I. Discharge of mortgages: supplementary provisions

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Amendments (Textual)

F166Sch. 2A inserted (1.12.1997) by 1997 c. 32, s. 7(2), Sch. 2; S.I. 1997/2668, art. 2, Sch. Pt. I(a)

Main provisionsE+W+N.I.

1(1)When all money intended to be secured by a mortgage given to a building society has been fully paid or discharged, the society may endorse on or annex to the mortgage one or other of the following—E+W+N.I.

(a)a receipt in the prescribed form signed by any person acting under the authority of the board of directors;

(b)a reconveyance of the mortgaged property to the mortgagor;

(c)a reconveyance of the mortgaged property to such person of full age, and on such trusts (if any), as the mortgagor may direct.

(2)Where in pursuance of sub-paragraph (1) above a receipt is endorsed on or annexed to a mortgage, not being a [F167charge or incumbrance registered under the M7Land Registration Act 1925] [F167registered charge (within the meaning of the Land Registration Act 2002)], the receipt shall operate in accordance with section 115(1), (3), (6) and (8) of the M8Law of Property Act 1925 (discharge of mortgages by receipt) in the like manner as a receipt which fulfils all the requirements of subsection (1) of that section.

(3)Section 115(9) of the Law of Property Act 1925 shall not apply to a receipt in the prescribed form endorsed or annexed by a building society in pursuance of sub-paragraph (1) above; and in the application of that subsection to a receipt so endorsed or annexed which is not in that form, the receipt shall be taken to be executed in the manner required by the statute relating to the society if it is signed as mentioned in sub-paragraph (1)(a) above.

(4)[F168The foregoing sub-paragraphs shall, in the case of a mortgage of registered land, have effect without prejudice to the operation of the Land Registration Act 1925 or any rules in force under it.]

(5)In this paragraph—

  • mortgage” includes a further charge;

  • the mortgagor”, in relation to a mortgage, means the person for the time being entitled to the equity of redemption; [F169and

  • registered land” has the same meaning as in the Land Registration Act 1925.]

(6)This paragraph does not extend to Scotland.

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Amendments (Textual)

F167Words in Sch. 2A para. 1(2) substituted (E.W.) (13.10.2003) by Land Registration Act 2002 (c. 9), s. 136(2), Sch. 11 para. 19(2) (with s. 129); S.I. 2003/1725, art. 2(1)

F169Words in Sch. 2A para. 1(5) repealed (E.W.) (13.10.2003) by Land Registration Act 2002 (c. 9), s. 136(2), Sch. 11 para. 19(4), Sch. 13 (with s. 129, Sch. 12 para. 1); S.I. 2003/1725, art. 2(1)

Marginal Citations

Application of paragraph 1 to Northern IrelandE+W+S+N.I.

2(1)In its application to Northern Ireland, paragraph 1 above shall have effect with the following modifications.E+W+S+N.I.

(2)In sub-paragraph (1) after the words “on such trusts” there shall be inserted the words “ or uses ”.

(3)In sub-paragraph (2)—

(a)for the words from “charge” to “Property Act 1925” there shall be substituted the words “ charge on registered land, the receipt shall operate in accordance with Article 3(1), (7) and (9) of the M9Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983 ”; and

(b)for the words “subsection (1) of that section” there shall be substituted the words “ paragraph (1) of that Article ”.

(4)For sub-paragraphs (3) and (4) there shall be substituted the following sub-paragraphs—

(3)If the mortgage is registered in accordance with the M10Registration of Deeds Act (Northern Ireland) 1970, the registrar under that Act shall—

(a)on production of the receipt mentioned in sub-paragraph (1) above make a note in the Abstract Book against the entry relating to the mortgage that the mortgage is satisfied; and

(b)grant a certificate, either on the mortgage or separately, that the mortgage is satisfied.

(4)The certificate granted under sub-paragraph (3)(b) above shall—

(a)be received in all courts and proceedings without further proof; and

(b)have the effect of clearing the register of the mortgage.

(5)In sub-paragraph (5) for the definition of “registered land” there shall be substituted the following definition—

  • registered land” means land the title to which is registered under Part III of the M11Land Registration Act (Northern Ireland) 1970.

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Marginal Citations

Power to prescribe form of documentsE+W+S+N.I.

3(1)The [F170Treasury] may make rules for prescribing anything authorised or required by paragraph 1 above to be prescribed; and in this Schedule “prescribed” means prescribed by rules made under this paragraph.E+W+S+N.I.

(2)The power to make rules under this paragraph shall be exercisable by statutory instrument.]

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Amendments (Textual)

F170Words in Sch. 2A para. 3(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 201 (with S. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C19Sch. 2A para. 3(1): Functions of the Chief Registrar, Assistant Registrar for Scotland, Assistant Registrars and the Central Office transferred (1.12.2001) to the Treasury by S.I. 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt. I; S.I. 2001/3538, art. 2

F171SCHEDULE 3E+W+S+N.I.

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

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Amendments (Textual)

F172SCHEDULE 4E+W+S+N.I.

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

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Amendments (Textual)

F174SCHEDULE 5E+W+S+N.I.

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

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Amendments (Textual)

F174Sch. 5 repealed (1.12.2001) by S.I. 2001/2617 arts. 2(b), 13(2), Sch. 4 (with art. 13(3) Sch. 5); S.I. 2001/3538, art. 2

F178SCHEDULE 6E+W+S+N.I.

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

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Amendments (Textual)

F178Sch. 6 repealed (1.12.2001) by S.I. 2001/2617, arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

Sch. 6 continued (1.12.2001) by S.I. 2001/2967, arts. 1(2), 9, 11, 24 Sch. 1 Pt. 1; S.I. 2001/3538, art. 2

Section 32.

SCHEDULE 7E+W+S+N.I. Investors: Special Provisions

Members or depositors dyingE+W+S+N.I.

1(1)The provisions of this paragraph have effect where a member of, or depositor with, a building society dies, testate or intestate, domiciled in any part of the United Kingdom leaving a sum of money in the funds of the society not exceeding £5000.E+W+S+N.I.

(2)If a person claiming to be beneficially entitled to the sum of money under the will or the applicable law of intestacy furnishes to the society—

(a)satisfactory evidence of the death, and

(b)a statutory declaration that the member or depositor has died and that the person claiming the amount is beneficially entitled under the will or the applicable law of intestacy to receive it,

the society may, without probate of the will or the grant of letters of administration or confirmation, as the case may be, pay the sum of money to that person.

(3)Where a building society has paid a sum of money to any person in reliance on evidence of death and a statutory declaration furnished as mentioned in sub-paragraph (2) above, the payment shall be valid and effectual with respect to any demand against the funds of the society from any other person claiming to be entitled to it but without prejudice to that other person’s pursuing his remedy for the amount against the person who received it.

(4)The Treasury may from time to time by order direct that this paragraph shall have effect as if for the reference in sub-paragraph (1) above to £5,000 there were substituted a reference to such higher amount as may be specified in the order.

(5)An order under sub-paragraph (4) above shall apply in relation to deaths occurring after the expiration of a period of one month beginning with the date on which the order comes into force.

(6)The power to make an order under sub-paragraph (4) above is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

Receipts by depositors under ageE+W+S+N.I.

2Any receipt or acknowledgment given to a building society by a person who is a minor in respect of the payment to him of any sum due in respect of a deposit made by him with the society, shall not be invalid on the ground of his minority.

F180SCHEDULE 7AE+W+S+N.I.

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

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Amendments (Textual)

F180Sch. 7A repealed (1.12.2001) by S.I. 2001/2617 arts. 2(b), 13(2), Sch. 4 (with art. 13(3), Sch. 5); S.I. 2001/3538 art. 2

Section 34.

SCHEDULE 8E+W+S+N.I. Powers to Provide Services

[F181Part IE+W+S+N.I. The Services

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Amendments (Textual)

F181Parts of Sch. 8 varied by S.I. 1988/1141, arts. 5, 6, Sch. 5 so as to have effect as set out in that Sch. 5

1Banking services.

2Investment services.

3Insurance services.

4Trusteeship.

5Executorship.

6Land services.]

Part IIE+W+S+N.I. General Restrictions On Services

1Subject to paragraphs 2, 3, 4 and 5 below, no power conferred on a building society to provide a service of a description specified in Part I of this Schedule of itself confers power—

(a)to perform the activities of—

(i)taking deposits in circumstances which require authorisation under the Banking Act 1987 (or would require authorisation were the taker not a building society),

(ii)making advances or loans of any description,

(iii)acquiring the right to be paid any sum owing to another person arising out of any arrangement under which money is borrowed or goods or services are provided on credit,

(iv)acquiring land,

(v)acquiring or holding any asset the power to acquire or hold which is derived from section 19 of this Act by virtue of an order made under, or partly under, that section,

(vi)acquiring or holding relevant investments, or

(vii)underwriting risks of any description, or

F182[(b)(i)to maintain a place of business in any country or territory for the purpose of providing that service unless the society also conducts the principal busi ness of a building society in that country or territory, save where that service is provided in any of the countries listed in paragraph (ii) below;

(ii)any member State, Austria, Finland, Iceland, Liechtenstein, Norway, Sweden and Switzerland,]

but nothing in this paragraph prohibits performance of any activity performance of which is within the capacity of a building society by virtue of any power arising otherwise than under this Schedule.

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Amendments (Textual)

F182Sch. 8 Pt. II para. 1(b) substituted (1. 6. 1992) by S.I. 1992/509, art.3

2Paragraph 1 above shall not be taken to prevent—

(a)the power to provide banking services from conferring the power—

(i)to arrange the taking of deposits,

(ii)to arrange the lending of money, and

(iii)to arrange the bailment of leasable chattels,

(b)the power to provide investment services from conferring the power to arrange the acquisition or holding of relevant investments, or

(c)the power to provide insurance services from conferring the power to arrange the provision of insurance of any description.

3Where, as part of the power to provide banking services, a building society becomes guarantor of the discharge of liabilities of another person and is required to pay sums which that other person is obliged to pay, the right to recover those sums from that other person (with or without interest on them) shall not be treated as excluded by paragraph 1 above.

[F1834The right to recover any sum overdrawn (with or without interest on it) on an unauthorised overdraft on an account with a building society shall not be treated as excluded by paragraph 1 above.]

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Amendments (Textual)

F183Sch. 8 Pt. II para. 4 substituted by S.I. 1989/839, art. 3(a)

5Acquiring or holding relevant investments shall not be treated as excluded by paragraph 1 above where it arises out of—

(a)any element of investment services comprising—

(i)acquiring or holding relevant investments as a nominee,

(ii)establishment and management of pension schemes,

(iii)establishment and management of personal equity plans, or

(iv)establishment and management of collective investment schemes,

(b)the service of trusteeship, or

(c)the service of executorship.

[F1846Paragraph 1 above shall not be taken to prevent the power to provide the service of trusteeship or the power to provide the service of executorship from conferring the power on a building society acting in the capacity of trustee or personal representative—

(i)to make advances or loans of any description, or

(ii)to acquire land.]

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Amendments (Textual)

F184Sch. 8 Pt. II para. 6 added by S.I. 1989/839, art. 3(b)

Part IIIE+W+S+N.I. Restrictions In Relation To Certain Services

Banking servicesE+W+S+N.I.

1In relation to the power to provide banking services—

F185(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F186(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F186(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F185(d). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F185(e). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(f)provision of foreign exchange services, except where it arises for the purpose of or in the course of the provision of money transmission services, is restricted, save in excepted transactions, to their provision to individuals,

(g)arranging the provision of foreign exchange services is, subject to the exception in subparagraph (f) above, restricted, save in excepted transactions, to their provision to individuals, and

(h)administration of the issue of shares or corresponding membership rights by bodies corporate or of transferable instruments and registration of the transfer or cancellation of such shares, rights or instruments is restricted to administration and registration by a building society which has a qualifying asset holding.

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Amendments (Textual)

F185Sch. 8 Pt. III para. 1(a)(d)(e) deleted (1.6.1995) by S.I. 1995/1189, art. 2

F186Sch. 8 Pt. III para. 1(b)(c) repealed by S.I. 1989/839, art. 3(c)

Investment servicesE+W+S+N.I.

2In relation to the power to provide investment services—

(a)managing investments (except in relation to management of pension schemes) is restricted to managing by a building society which has a qualifying asset holding,

(b)acquiring and holding relevant investments as a nominee is restricted to acquisition and holding by a building society which has a qualifying asset holding,

(c)establishment and management of pension schemes is restricted to schemes which do not include provisions requiring the investment of any of the funds within the scheme in shares in or deposits with a building society of which the trustee or manager of the scheme is a subsidiary,

(d)establishment of personal equity plans is restricted to establishment by a building society which has a qualifying asset holding, and

(e)establishment of collective investment schemes is restricted to establishment by a building society which has a qualifying asset holding.

TrusteeshipE+W+S+N.I.

[F1873In relation to the power to provide the service of trusteeship—

(a)a building society may not accept trusteeship of a prohibited trust, and

(b)a building society which becomes aware that a trust of which it is trustee has become a prohibited trust shall retire as trustee of that trust as soon as it is practicable to do so.]

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Amendments (Textual)

F187Sch. 8 Pt. III para. 3 substituted by S.I. 1989/839, art. 3(d)

Land servicesE+W+S+N.I.

4In relation to the power to provide land services—

(a)the carrying on of estate agency work is restricted to carrying on by a subsidiary or other associated body of a building society,

(b)removal and storage of furniture is restricted to removal and storage by a subsidiary or other associated body of a building society which society has a qualifying asset holding,

(c)management of land is restricted to management by a building society which has a qualifying asset holding,

(d)management of land is restricted to land which is or is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land under the same management which is or is to be used primarily for residential purposes,

(e)arranging the management of land is restricted to land which is or is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land under the same management which is or is to be used primarily for residential purposes,

(f)development of land is restricted to development by a building society which has a qualifying asset holding,

(g)development of land is restricted to land which is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land developed by the developer which is or is to be used primarily for residential purposes,

(h)development of land is restricted to land of a local authority in Great Britain or of a development corporation or land which is charged in favour of the developer of the land to secure repayment of the costs of development, and

(i)arranging the development of land is restricted to land which is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land developed by the developer which is or is to be used primarily for residential purposes.

5No employee of a building society, a subsidiary or other associated body of which carries on estate agency work, whose duties include—

(a)making a report on the value of land which is to secure an advance,

(b)making an assessment of the adequacy of the security of an advance to be secured on land, or

(c)authorising the making of an advance to be secured on land,

shall perform any service on behalf of that subsidiary or other associated body.

Part IVE+W+S+N.I. Supplementary

Powers—generalE+W+S+N.I.

1Any power derived from this Schedule to perform any activity includes the power to arrange its performance but a restriction in Part III of this Schedule on the power to perform any activity does not imply an equivalent restriction on the power to arrange its performance.

Powers—specific servicesE+W+S+N.I.

2Without prejudice to the general scope of any service specified in Part I of this Schedule—

(a)the power to provide banking services includes power,

(i)to administer the issue of, and payments in respect of, shares or corresponding membership rights in bodies corporate or transferable instruments and to register the transfer or cancellation of such shares, rights or instruments, and

(ii)to provide advice on taxation and financial planning,

(b)the power to provide investment services includes power to provide advice on taxation and financial planning,

(c)the power to provide the service of executorship includes power—

(i)to act as administrator of the estates of deceased persons, and

(ii)to assist in the making of wills, and

(d)the power to provide land services includes power to carry out the removal and storage of furniture.

Banking—particular provisionsE+W+S+N.I.

3(1)A building society shall, so far as regards the carrying on of an activity which comprises provision of a banking service for the purposes of this Schedule, be treated for all purposes as a bank and a banker and as carrying on the business of banking or a banking undertaking whether or not it would be so treated apart from this paragraph.E+W+S+N.I.

(2)This paragraph does not affect the determination of any question as to the status of a building society as a bank or banker for other purposes.

4Where an account of a person with a building society has, by virtue of the provision of banking services under this Schedule, become overdrawn, it shall be the duty of the building society to take all reasonable steps to recover as soon as practicable from that person the amount due to it on the overdrawn account.

5(1)For the purposes of paragraph 1(f) and (g) of Part III of this Schedule, a transaction consisting in the provision of foreign exchange services is an excepted transaction where the value of the transaction is less than £10,000.E+W+S+N.I.

(2)For the purposes of subparagraph (1) above the value of a transaction consisting in the provision of foreign exchange services is, where the building society is selling foreign currency, the sum paid to it and, where the building society is purchasing foreign currency, the sum paid by it.

Land services—sanctionE+W+S+N.I.

6If a person performs any service in contravention of paragraph 5 of Part III of this Schedule he shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

InterpretationE+W+S+N.I.

7This Schedule is to be construed as relating only to the capacity of building societies to provide the services for the time being specified in it and not as making lawful any activity, whether of a building society or a subsidiary or other associated body of a building society, which would not be lawful apart from this Schedule.

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Modifications etc. (not altering text)

C20Sch. 8 Pt. IV para. 7 extended (1. 1. 1993) by S.I. 1992/3218, reg. 82(1), Sch. 10 Pt. I para.22(d)

8In this Schedule—

  • arranging”, in relation to the performance of any activity, includes—

    (a)

    arranging its performance on behalf of the person in respect of whom the activity is performed as well as the person who performs the activity, and

    (b)

    acting as agent on behalf of either such person;

  • [F188bailment”, in relation to Scotland, means “hire”;

  • chattels” means—

    (i)

    in relation to England and Wales and Northern Ireland, all personal chattels other than things in action and money, and

    (ii)

    in relation to Scotland, all corporeal moveables except money;]

  • collective investment scheme” has the meaning which it bears in section 75 of the Financial Services Act 1986;

  • corresponding membership right” has the meaning which it bears in section 18(17) of this Act;

  • development corporation” means any of the following bodies:

    (a)

    in England, a development corporation within the meaning of the New Towns Act 1981;

    (b)

    in Wales, the Development Board for Rural Wales established by section 1 of the Development of Rural Wales Act 1976 and the Welsh Development Agency established by section 1 of the Welsh Development Agency Act 1975;

    (c)

    in Scotland, a development corporation within the meaning of the New Towns (Scotland) Act 1968;

    (d)

    in Northern Ireland, the Department of the Environment for Northern Ireland and the Northern Ireland Housing Executive referred to in article 3 of the Housing (Northern Ireland) Order 1981;

  • estate agency work” has the same meaning as in the Estate Agents Act 1979;

  • land services” means services relating to the acquisition, management, development or disposal of land;

  • [F189leasable chattels” means chattels which are, or are to be, subject to bailment to a person in return for periodical payments by that person under an agreement which may but need not contain provision (or be part of a series of agreements containing provision) for the property in those chattels to become vested in that person;]

  • local authority in Great Britain” means any of the following authorities:

    (a)

    in England F190. . ., a county council, a district council, a London borough council, a parish F190. . . council, the Common Council of the City of London, and the Council of the Isles of Scilly;

    (aa)

    F191[in Wales, a county council, a county borough council and a community council;]

    (b)

    in Scotland, a local authority within the meaning of section 235 of the Local Government (Scotland) Act 1973;

  • managing investments” means activity of the kind specified in paragraph 14 of Part II (activities constituting investment business) of Schedule 1 to the Financial Services Act 1986;

  • pension scheme” means—

    (a)

    a retirement benefits scheme within the meaning of, and which is approved or a candidate for approval by the Commissioners of Inland Revenue for the purposes of, Chapter I of Part XIV of the Income and Corporation Taxes Act 1988 (retirement benefit schemes), or

    (b)

    a personal pension scheme within the meaning of, and which is approved or a candidate for approval by the Commissioners of Inland Revenue under, Chapter IV (personal pension schemes) of that Part of that Act,

    and for the purposes of this definition a scheme is a candidate for approval for the purposes of the first or, as the case may be, under the second of those Chapters if it has been prepared with a view to being so approved and steps are being taken towards obtaining that approval;

  • personal equity plan” means a plan for the purposes of section 333 (personal equity plans) of the Income and Corporation Taxes Act 1988;

  • the principal business of a building society” means the business of raising funds (whether by the issue of shares or receiving deposits) for the purposes of the society or of making advances secured on land;

  • [F192prohibited trust” means a trust which is either—

    (a)

    a trust under which the majority in number of the beneficiaries who are for the time being ascertained are non-charitable corporate bodies, or

    (b)

    a trust of funds in a pension scheme which includes provisions requiring the investment of any of those funds in shares in or deposits with a building society of which the trustee is a subsidiary.]

  • relevant investment” means—

    (a)

    any share or corresponding membership right in a body corporate, and

    (b)

    any other asset, right or interest falling within any paragraph of Part I (investments) of Schedule 1 to the Financial Services Act 1986; and

  • transferable instrument” means—

    (a)

    where the issuer of the instrument is a building society, an instrument which is a transferable bearer instrument or a transferable non-bearer instrument for the purposes of section 7 of this Act, and

    (b)

    in any other case, an instrument which would, were the issuer a building society, be such a transferable bearer instrument or transferable non-bearer instrument.

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Amendments (Textual)

F188Definitions inserted by S.I. 1989/839, art. 3(e)

F189Definition substituted by S.I. 1989/839, art. 3(f)

F192Definition inserted by S.I. 1989/839, art. 3(g)

[F193SCHEDULE 8AE+W+S+N.I. Transfer directions: modifications of Part X

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Amendments (Textual)

F193Sch. 8A inserted (9.6.1997) by 1997 c. 32, s. 17(2), Sch. 4; S.I. 1997/1427, art. 2(c)

Part IE+W+S+N.I. Directions under section 42B(3)

PreliminaryE+W+S+N.I.

1This Part of this Schedule applies where a direction is given under section 42B(3) (“the direction”).

Compensation for loss of officeE+W+S+N.I.

2(1)The consent of the [F194appropriate authority] shall be sufficient authority for the provision for any such compensation as is mentioned in section 96(1)(a).E+W+S+N.I.

(2)A resolution of the board of directors passed in pursuance of the direction shall be sufficient authority for any such payments as are mentioned in section 96(1)(b).

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Amendments (Textual)

Statements to membersE+W+S+N.I.

3(1)The following provisions of this paragraph shall apply in place of paragraph 1 of Schedule 16.E+W+S+N.I.

(2)The society shall send to every member entitled to notice of a meeting of the society, a statement containing—

(a)the particulars required, in relation to prescribed matters, by regulations under section 42B(8); and

(b)particulars of any other matters required by the [F194appropriate authority] in the case of the particular transfer of engagements,

with or without other particulars regarding that transfer.

[F195(2ZA)The PRA must consult the FCA before requiring any particulars under sub-paragraph (2)(b).]

[F196(2A)Where a statement is required to be sent to a member under sub-paragraph (2)—

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

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

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

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

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

(c)F197... the society notifies him within the period specified in sub-paragraph (3) below of—

(i)the publication of the notice and any statement on a web site,

(ii)the address of that web site,

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

(d)that statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the [F194appropriate authority] whether to confirm the transfer pursuant to section 95.

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

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

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

the failure shall not invalidate the proceedings of the meeting.]

(3)The statement shall be sent—

(a)where the [F194appropriate authority] has given the society a direction under section 42B(1)(a), within the period (not being less than 28 days) specified in [F198a final notice given by the [F194appropriate authority] under section 390 of the Financial Services and Markets Act 2000];

(b)where the [F194appropriate authority] has not given the society such a direction, within 14 days of the board of directors passing a resolution in pursuance of the direction.

[F199(3A)For the purposes of sub-paragraph (3) above, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2), a statement published on a web site in accordance with sub-paragraph (2B) is to be treated as sent to a person on the day that the notification is given in accordance with sub-paragraph (2B)(c).]

(4)No statement shall be sent unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under sub-paragraph (2)(b) above, have been approved by the [F194appropriate authority] .

(5)A failure to comply with a requirement of this paragraph shall not invalidate the transfer of engagements; but, if the society fails without reasonable excuse to comply with such a requirement the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

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Amendments (Textual)

F198Words in Sch. 8A para. 3(3)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 204(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Application for confirmationE+W+S+N.I.

4No application for confirmation by the [F194appropriate authority] of the transfer of engagements may be made under Part III of Schedule 16 until after the society has complied with the requirements of paragraph 3 above.

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Amendments (Textual)

Grounds for not confirming transferE+W+S+N.I.

5Section 95 shall apply as if—

(a)for paragraphs (a) and (b) of subsection (4) there were substituted the following paragraph—

(a)the members or a proportion of them would be unreasonably prejudiced by the transfer;; and

(b)in subsection (6), for the words “paragraphs (a), (b) and (c)” there were substituted the words “ paragraphs (a) and (c) ” and, in paragraph (a), the words “, including the calling of a further meeting,” were omitted.

Part IIE+W+S+N.I. Directions under section 42B(4)

PreliminaryE+W+S+N.I.

6This Part of this Schedule applies where a direction is given under section 42B(4) (“the direction”).

Compensation for loss of officeE+W+S+N.I.

7(1)The consent of the [F194appropriate authority] shall be sufficient authority for the provision for any such compensation as is mentioned in section 99(2)(a).E+W+S+N.I.

(2)A resolution of the board of directors passed in pursuance of the direction shall be sufficient authority for any such payments as are mentioned in section 99(2)(b).

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Amendments (Textual)

Increased remunerationE+W+S+N.I.

8If the [F194appropriate authority] consents to the inclusion of any such provision as is mentioned in section 99A(1), it shall not be necessary for an ordinary resolution approving the provision to be put before a meeting of the society.

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Amendments (Textual)

Statements to membersE+W+S+N.I.

9(1)The following provisions of this paragraph shall apply in place of Part I of Schedule 17.E+W+S+N.I.

(2)The society shall send to every member entitled to notice of a meeting of the society, a statement containing—

(a)the particulars required, in relation to prescribed matters, by regulations under section 42B(8); and

(b)particulars of any other matters required by the [F194appropriate authority] in the case of the particular transfer of business,

with or without other particulars regarding that transfer.

[F200(2ZA)The PRA must consult the FCA before requiring any particulars under sub-paragraph (2)(b).]

[F201(2A)Where a statement is required to be sent to a member under sub-paragraph (2)—

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

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

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

(a)the society and that person have agreed that statements that are 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)F202...the society notifies him within the period specified in sub-paragraph (3) of—

(i)the publication of the notice and any statement on a web site,

(ii)the address of that web site,

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

(d)that statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the [F194appropriate authority] whether to confirm the transfer pursuant to section 98.

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

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

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

the failure shall not invalidate the proceedings of the meeting.]

(3)The statement shall be sent—

(a)where the [F194appropriate authority] has given the society a direction under [F203section 42B(1)(aa) or (b)] , within the period (not being less than 28 days) specified in [F204a final notice given by the [F194appropriate authority] under section 390 of the Financial Services and Markets Act 2000];

(b)where the [F194appropriate authority] has not given the society such a direction, within 14 days of the board of directors passing a resolution in pursuance of the direction.

[F205(3A)For the purposes of sub-paragraph (3) above, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2), a statement published on a web site in accordance with sub-paragraph (2B) is to be treated as sent to a person on the day that the notification is given in accordance with sub-paragraph (2B)(c).]

(4)No statement shall be sent unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under sub-paragraph (2)(b) above, have been approved by the [F194appropriate authority] .

(5)A failure to comply with a requirement of this paragraph shall not invalidate the transfer of business; but, if the society fails without reasonable excuse to comply with such a requirement the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

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Amendments (Textual)

F203Words in Sch. 8A para. 9(3) substituted (1.4.2013) by Financial Services Act 2012 (c. 21), ss. 56(5), 122(3) (with Sch. 20); S.I. 2013/423, art. 3, Sch.

F204Words in Sch. 8A para. 9(3)(a) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt. II para. 204(b) (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C21Sch. 8A para. 9 amended (2.3.1998) by S.I. 1998/212, reg. 5(1), Sch. 3

Application for confirmationE+W+S+N.I.

10No application for confirmation by the [F194appropriate authority] of the transfer of business may be made under Part II of Schedule 17 until after the society has complied with the requirements of paragraph 9 above.

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Amendments (Textual)

Grounds for not confirming transferE+W+S+N.I.

11Section 98 shall apply as if—

(a)for paragraphs (a) and (b) of subsection (3) there were substituted the following paragraph—

(a)the members or a proportion of them would be unreasonably prejudiced by the transfer;;

(b)in subsection (5), for the words “paragraphs (a), (b), (c) and (d)” there were substituted the words “ paragraphs (a), (c) and (d) ”; and

(c)in subsection (6), the words “the calling of a further meeting,” were omitted.]

Section 68(4).

SCHEDULE 9E+W+S+N.I. Directors: Requisite Particulars of Restricted Transactions

PreliminaryE+W+S+N.I.

1In this Schedule—

  • the financial year” means the financial year to which the statement under section 68(3) relates;

  • restricted transaction or arrangement” means any transaction or arrangement falling within section 65(1) particulars of which are required to be included in that statement;

and other expressions have the same meaning as in those sections.

The requisite particularsE+W+S+N.I.

2(1)The particulars of a restricted transaction or arrangement required by section 68(3) are particulars of the principal terms of the transaction or arrangement.E+W+S+N.I.

(2)Without prejudice to the generality of sub-paragraph (1) above, the following particulars of a restricted transaction or arrangement are required—

(a)a statement of the fact either that the transaction or arrangement was made or that it subsisted during the financial year;

(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 [F206a 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).

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Amendments (Textual)

F206Words in Sch. 9 para. 2(2)(c) substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, s. 43, Sch. 7 para. 59; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxv)

Section 69(7).

SCHEDULE 10E+W+S+N.I. Requisite Particulars of Income or Related Businesses

Part IE+W+S+N.I. Requisite Particulars Where no Adoption of Part II

ConveyancersE+W+S+N.I.

1Where 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 [F207a 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 [F207a 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 [F208under 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 [F209administrative services] to the society.

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Amendments (Textual)

F207Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F208Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F209Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Valuers and surveyorsE+W+S+N.I.

2Where 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 [F210a 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 [F210a 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 [F211under 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 [F212administrative services] to the society.

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Amendments (Textual)

F210Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F211Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F212Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

AccountantsE+W+S+N.I.

3Where 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 [F213administrative services] to the society.

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Amendments (Textual)

F213Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Insurance agents, etc.E+W+S+N.I.

4Where 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 [F214loans] 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 [F215administrative services] to the society.

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Amendments (Textual)

F214Word in Sch. 10 paras. 4, 8 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F215Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Part IIE+W+S+N.I. Requisite Particulars on Adoption of This Part

ConveyancersE+W+S+N.I.

5Where 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 [F216a 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 [F216a 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 [F217under 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 [F218administrative services] to the society.

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Amendments (Textual)

F216Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F217Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F218Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Valuers and surveyorsE+W+S+N.I.

6Where 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 [F219a 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 [F220under 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 [F221administrative services] to the society.

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Amendments (Textual)

F219Words in Sch. 10 paras. 1, 2, 5, 6 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(2)(a); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F220Words in Sch. 10 paras. 1, 2, 5, 6 repealed (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 46(2), 47(3), Sch. 7 para. 60(2)(b), Sch. 9; S.I. 1997/2668, art. 2, Sch. Pt. II(w)(y)(z)(xxxvi)(cc)(xix)

F221Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

AccountantsE+W+S+N.I.

7Where 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 [F222administrative services] to the society.

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Amendments (Textual)

F222Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Insurance agents, etc.E+W+S+N.I.

8Where 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 [F223loans] 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 [F224administrative services] to the society.

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Amendments (Textual)

F223Words in Sch. 10 paras. 4, 8 substituted (1.12.1997 in specified cases and for specified purposes and otherwise in accordance with art. 2(2)(3)(5) of S.I. 1997/2668) by 1997 c. 32, ss. 43, 47(3), Sch. 7 para. 60(3); S.I. 1997/2668, art. 2, Sch. Pt. II(w)(z)(xxxvi)

F224Words in Sch. 10 paras. 1-8 substituted (9.6.1997) by 1997 c. 32, s. 43, Sch. 7 para. 60(1); S.I. 1997/1427, art. 2(k)(n)(xvii)

Part IIIE+W+S+N.I. Supplementary

Power to prescribe bands for Part II particularsE+W+S+N.I.

9(1)The [F225Treasury] may by order prescribe, for the purposes of the provisions of Part II of this Schedule,—E+W+S+N.I.

(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.

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Amendments (Textual)

F225Words in Sch. 10 para. 9(1) substituted (17.8.2001 for certain purposes and otherwise 1.12.2001) by S.I. 2001/2617, arts. 2, 8, 13(1), Sch. 3 Pt II para. 205 (with art. 13(3), Sch. 5); S.I. 2001/3538, art. 2

Modifications etc. (not altering text)

C22Sch. 10 paras. 9(1)(2): Functions of Building Societies Commission transferred (1.12.2001) to the Treasury by 2001/2617, arts. 2(b), 4(1), Sch. 1 Pt III; S.I. 2001/3538, art. 2

InterpretationE+W+S+N.I.

10(1)In this Schedule—E+W+S+N.I.

  • 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

Section 72J

[F226SCHEDULE 10AE+W+S+N.I.Disclosures about directors, other officers and employees in notes to accounts

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Amendments (Textual)

F226Schs. 10A, 10B inserted (22.12.2004) (with effect in accordance with art. 1(2) of the amending S.I.) by The Building Societies Act 1986 (International Accounting Standards and Other Accounting Amendments) Order 2004 (S.I. 2004/3380), art. 1, Sch. para. 9

Part 1E+W+S+N.I.Emoluments of and dealings with directors and other officers

Aggregate amount of director’s remuneration etcE+W+S+N.I.

1.(1)The following must be shown—E+W+S+N.I.

(a)the aggregate amount of salary and fees and sums paid by way of expenses allowance (so far as they are chargeable to United Kingdom tax) paid to or receivable by directors in respect of qualifying services;

(b)the aggregate amount of bonuses paid to or receivable by directors in respect of qualifying services;

(c)the aggregate amount of the estimated money value of any other benefits paid to or receivable by directors in respect of qualifying services otherwise than in cash;

(d)the aggregate of the amount of gains made by directors on the exercise of share options;

(e)the aggregate of the following–

(i)the amount of money paid to or receivable by directors under long-term incentive schemes in respect of qualifying services; and

(ii)the net value of assets (other than money and share options) received or receivable by directors under such schemes in respect of such services;

(f)the aggregate value of any society contributions paid, or treated as paid, to a pension scheme in respect of directors' qualifying services, being contributions by reference to which the rate or amount of any money purchase benefits that may become payable will be calculated;

(g)the aggregate amount of the increase during the financial year in the value of any accrued pension or accrued lump sum comprising defined benefits payable in respect of any qualifying services performed by directors during the financial year; and

(h)the total aggregate amounts in paragraphs (a) to (g).

(2)In this paragraph–

  • “accrued pension” and “accrued lump sum”, in relation to any pension scheme and any director, mean respectively the amount of the annual pension, and the amount of the lump sum, which would be payable under the scheme on his attaining normal pension age if–

    (a)

    he had left the society’s service at the end of the financial year;

    (b)

    there were no increase in the general level of prices in the United Kingdom during the period beginning with the end of that year and ending with his attaining that age;

    (c)

    no question arose of any commutation of the pension or inverse commutation of the lump sum; and

    (d)

    any amounts attributable to voluntary contributions paid by the director to the scheme, and any money purchase benefits which would be payable under the scheme, were disregarded;

  • “amount”, in relation to a gain made on the exercise of a share option means the difference between–

    (a)

    the market price of the shares on the day on which the option was exercised, and

    (b)

    the price actually paid for the shares;

  • “defined benefits” means retirement benefits payable under a pension scheme which are not money purchase benefits;

  • “defined benefit scheme”, in relation to a director, means a pension scheme which is not a money purchase scheme;

  • “long-term incentive scheme” means any agreement or arrangement under which money or other assets may become receivable by a director and which includes one or more qualifying conditions with respect to service or performance which cannot be fulfilled within a single financial year; and for this purpose the following are disregarded–

    (a)

    bonuses the amount of which falls to be determined by reference to service or performance within a single financial year;

    (b)

    compensation for loss of office, payments for breach of contract and other termination payments; and

    (c)

    retirement benefits;

  • “money purchase benefits”, in relation to a director, means retirement benefits payable under a pension scheme the rate or amount of which is calculated by reference to payments made, or treated as made, by the director or by any other person in respect of the director and [F227which fall within paragraph 1A];

  • “money purchase scheme”, in relation to a director, means a pension scheme under which all of the benefits that may become payable to or in respect of the director are money purchase benefits;

  • “normal pension age”, in relation to any pension scheme and any director, means the age at which the director will first become entitled to receive a full pension on retirement of any amount determined without reduction to take account of its payment before a later age (but disregarding any entitlement to pension upon retirement in the event of illness, incapacity or redundancy);

  • “net value”, in relation to any assets received or receivable by a director, means value after deducting any money paid or other value given by the director in respect of those assets;

  • “qualifying services”, in relation to any person, means his services as a director of the society, and his services while director of the society–

    (a)

    as director of any of its connected undertakings; or

    (b)

    otherwise in connection with the management of the affairs of the society or any of its connected undertakings;

  • “shares” means shares (whether allotted or not) in any connected undertaking of the society, and includes a share warrant as defined by [F228section 779(1) of the Companies Act 2006];

  • “share option” means a right to acquire shares;

  • “society contributions”, in relation to a pension scheme and a director, means any payments (including insurance premiums) made, or treated as made, to the scheme in respect of the director by a person other than the director;

  • “value”, in relation to shares received or receivable by a director on any day, means the market price of the shares on that day.

(3)For the purposes of this paragraph amounts paid or receivable or share options granted in respect of a person’s accepting office as a director are treated as amounts paid or receivable or share options granted in respect of his services as a director.

(4)Where a pension scheme provides for any benefits that may become payable to or in respect of any director to be whichever are the greater of –

(a)money purchase benefits as determined by or under the scheme; and

(b)defined benefits as so determined,

the society may assume for the purposes of this paragraph that those benefits will be money purchase benefits, or defined benefits, according to whichever appears more likely at the end of the financial year.

(5)For the purpose of determining whether a pension scheme is a money purchase or defined benefit scheme, any death in service benefits provided for by the scheme are disregarded.

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Amendments (Textual)

F227Words in Sch. 10A para. 1(2) substituted (24.7.2014) by Pensions Act 2011 (c. 19), ss. 29(5), 38(4); S.I. 2014/1683, art. 2

[F2291A(1)This paragraph applies for the purposes of the definition of “money purchase benefits” in paragraph 1(2).E+W+S+N.I.

(2)A benefit other than a pension in payment falls within this paragraph if its rate or amount is calculated solely by reference to assets which (because of the nature of the calculation) must necessarily suffice for the purposes of its provision to or in respect of the director.

(3)A benefit which is a pension in payment falls within this paragraph if—

(a)its provision to or in respect of the director is secured by an annuity contract or insurance policy made or taken out with an insurer, and

(b)at all times before coming into payment the pension was a benefit falling within this paragraph by virtue of sub-paragraph (2).

(4)For the purposes of sub-paragraph (2) it is immaterial if the calculation of the rate or amount of the benefit includes deductions for administrative expenses or commission.

(5)In this paragraph references to a pension do not include income withdrawal or dependants' income withdrawal (within the meaning of paragraphs 7 and 21 of Schedule 28 to the Finance Act 2004).]

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Amendments (Textual)

Details of individual directors' remuneration etcE+W+S+N.I.

2.(1)There must be shown in respect of each director by name, so much of each of the relevant aggregates as is attributable to that director.E+W+S+N.I.

(2)In this paragraph “relevant aggregates” means the aggregates shown under paragraph 1(1)(a) to (h).

(3)Sub-paragraphs (2) to (5) of paragraph 1 apply for the purposes of this paragraph as they apply for the purposes of that paragraph.

Excess retirement benefits of directors and past directorsE+W+S+N.I.

3.(1)Subject to sub-paragraph (2), there must be shown the aggregate amount of–E+W+S+N.I.

(a)so much of retirement benefits paid to or receivable by directors under pension schemes; and

(b)so much of retirement benefits paid to or receivable by past directors under such schemes,

as (in each case) is in excess of the retirement benefits to which they were respectively entitled on the relevant date.

(2)For the purposes of sub-paragraph (1) the relevant date is whichever is the later of

(a)the date on which the benefits first became payable;

(b)27 March 1998; or

(c)the date on which the provisions of the Building Societies Act 1997 specified in Part 2 of the Schedule to the Building Societies Act 1997 (Commencement) (No.3) Order 1997, have come into force in accordance with Article 2 of that Order in relation to the society.

(3)Amounts paid or receivable under a pension scheme need not be included in the aggregate amount if –

(a)the funding of the scheme was such that the amounts were or, as the case may be, could have been paid without recourse to additional contributions; and

(b)amounts were paid to or receivable by all pensioner members of the scheme on the same basis,

and in this sub-paragraph “pensioner member”, in relation to a pension scheme, means any person who is entitled to the present payment of retirement benefits under the scheme.

(4)In this paragraph–

(a)references to retirement benefits include benefits otherwise than in cash; and

(b)in relation to so much of retirement benefits as consists of a benefit otherwise than in cash, references to their amount are to the estimated money value of the benefit,

and the nature of any such benefit must also be disclosed.

Compensation to directors for loss of officeE+W+S+N.I.

4.(1)There must be shown the amount of any compensation in respect of loss of office paid to or receivable by each director or past director by name, together with the aggregate amount of any such compensation.E+W+S+N.I.

(2)There must be shown the aggregate amount of any compensation referred to in sub-paragraph (1) in respect of the preceding financial year.

(3)The amounts referred to in sub-paragraph (1) include compensation received or receivable by a director or past director for–

(a)loss of office as director of the society, or

(b)loss, while director of the society or on or in connection with his ceasing to be a director of it, of–

(i)any other office in connection with the management of the society’s affairs, or

(ii)any office as director or otherwise in connection with the management of the affairs of any connected undertaking of the society.

(4)References in this paragraph–

(a)to compensation include benefits paid or receivable other than in cash; and

(b)to the amount of compensation are to the estimated money value of the benefit;

(5)The nature of any such compensation must be disclosed.

(6)In this paragraph, references to compensation for loss of office include the following–

(a)compensation in consideration for, or in connection with, a person’s retirement from office; and

(b)where such a retirement is occasioned by a breach of the person’s contract with the society or with a subsidiary undertaking of the society–

(i)payments made by way of damages for the breach; or

(ii)payments made by way of settlement or compromise of any claim in respect of the breach.

Sums paid to third parties in respect of directors' servicesE+W+S+N.I.

5.(1)There must be shown the aggregate amount of any consideration paid to or receivable by third parties for making available the services of any person–E+W+S+N.I.

(a)as a director of the society, or

(b)while director of the society–

(i)as director of any of its connected undertakings, or

(ii)otherwise in connection with the management of the affairs of the society or any of its connected undertakings.

(2)The reference in sub-paragraph (1) to consideration includes benefits paid or receivable other than in cash; and–

(a)the nature of any such consideration must be disclosed, and

(b)in relation to such consideration the reference to its amount is to the estimated money value of the benefit.

(3)The reference in sub-paragraph (1) to third parties is to persons other than –

(a)the director himself or a person connected with him or a body corporate associated with him, and

(b)the society or any of its connected undertakings.

Supplementary provisions regarding directors' remunerationE+W+S+N.I.

6.(1)The following applies with respect to the amounts to be shown under paragraphs 1 to 5.E+W+S+N.I.

(2)The amount in each case includes all relevant sums paid by or receivable from–

(a)the society;

(b)the society’s connected undertakings; and

(c)any other person,

except sums to be accounted for to the society or any of its connected undertakings.

(3)References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate associated with him (but not so as to require an amount to be counted twice).

7.(1)The amounts to be shown for any financial year under paragraphs 1 to 5 are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.E+W+S+N.I.

(2)But where–

(a)any sums are not shown in a note to the accounts for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 6(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or

(b)any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year,

those sums must, to the extent to which the liability is released or not enforced or they are charged as mentioned (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and must be distinguished from the amounts to be shown apart from this provision.

8.(1)Where the chief executive of the society is not also a director of the society, he is deemed, for the purposes of paragraphs 1 to 7, to be a director of the society.E+W+S+N.I.

(2)In such circumstances there must be a note in the accounts specifying that the chief executive has been so deemed to be a director.

Interpretation of provisions regarding directors remunerationE+W+S+N.I.

9.(1)Sub-paragraphs (2) and (3) apply for the interpretation of paragraphs 1 to 8.E+W+S+N.I.

(2)For the purposes of paragraphs 1 and 2 a reference to a connected undertaking of the society is to any undertaking which is a connected undertaking at the time the services were rendered, and for the purposes of paragraph 4 is a reference to a connected undertaking immediately before the loss of office as a director.

(3)The following definitions apply–

(a)“pension scheme” has the meaning assigned to “retirement benefits scheme” by section 611 of the Income and Corporation Taxes Act 1988;

(b)“retirement benefits” has the meaning assigned to “relevant benefits” by section 612(1) and (2) of that Act.

(4)In paragraphs 5 and 6, references to a person being “connected” with a director, and to a director being “associated with” a body corporate, shall be construed in accordance with section 70 of this Act.

Directors' loans and transactionsE+W+S+N.I.

10.(1)This paragraph applies, subject to sub-paragraph (4), in relation to–E+W+S+N.I.

(a)loans from and other transactions and arrangements with the society described in section 65 (which restricts loans to and other transactions and arrangements with directors and persons connected to them), other than those to which section 65(5) and (6) applies, and

(b)in the case of a society the directors of which are required to prepare consolidated group accounts, loans from and other transactions and arrangements with a subsidiary undertaking of the society to which paragraph (a) would apply were the society rather than the subsidiary undertaking a party to them.

(2)The notes to the annual accounts must contain a statement, in relation to such loans, transactions and arrangements, showing–

(a)the aggregate amounts outstanding under them at the end of the financial year; and

(b)the numbers of persons for whom such loans, transactions and arrangements were made.

(3)The notes to the annual accounts must, in relation to any loan, or other transaction or arrangement subsisting during or at the end of the financial year, make the following disclosures–

(a)where a copy of it or a memorandum of its terms is included in the register maintained under section 68, the existence of the register and the availability of requisite particulars from it for inspection must be disclosed;

(b)where it comes within paragraph (1)(b), its particulars must be disclosed unless it was one which would, had the subsidiary undertakings of the society formed part of the society, have been exempted from the obligations imposed by section 68.

(4)This paragraph applies in relation to loans to, and other transactions and arrangements with, a person connected with a director of the society where the society (or in the case of a subsidiary undertaking incorporated in the United Kingdom, the subsidiary undertaking) has notice of the connection between that director and that person.

Disclosure of auditors' remunerationE+W+S+N.I.

F23011.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Amendments (Textual)

Persons who are to be regarded as associates of a society’s auditorsE+W+S+N.I.

F23112.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Amendments (Textual)

PART 2E+W+S+N.I.Information about employees

13.(1) The following information with respect to the employees of a building society must be given in notes to the society’s individual accounts–E+W+S+N.I.

(a)the average number of persons employed by the society in the financial year, and

(b)the average number of persons so employed within each category of persons employed by the society.

(2)The average number required by paragraph (1)(a) or (b) is determined by dividing the relevant annual number by the number of complete calendar months in the financial year.

(3)The relevant annual number is determined by ascertaining for each complete calendar month in the financial year–

(a)for the purposes of paragraph (1)(a), the number of persons employed under contracts of service by the society in that month (whether throughout the month or not);

(b)for the purposes of paragraph (1)(b), the number of persons in the category in question of persons so employed;

and, in either case, adding together all the monthly numbers.

(4)In respect of all persons employed by the society during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph (1)(a) there must also be stated the aggregate amounts respectively of–

(a)wages and salaries paid or payable in respect of that year to those persons;

(b)social security costs incurred by the society on their behalf; and

(c)other pension costs so incurred.

This does not apply in so far as those amounts, or any of them, are stated elsewhere in the society’s accounts.

(5)For the purposes of paragraph (1)(b) the categories of person employed by the society are such as the directors may select, having regard to the manner in which the society’s activities are organised.

(6)This paragraph applies in relation to group accounts as if the undertakings included in those accounts were a single society.

(7)In this paragraph–

(a)“social security costs” means any contribution by the society to any state social security or pension scheme, fund or arrangement;

(b)“pension costs” includes any costs incurred by the society in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the society, any sums set aside for future payment of pensions directly by the society to current or former employees and any pensions paid directly to such persons without having been first set aside.

Section 72K

SCHEDULE 10BE+W+S+N.I.Disclosures about related undertakings required in note to accounts

PART 1E+W+S+N.I.Societies not required to prepare consolidated group accounts

Subsidiary undertakingsE+W+S+N.I.

1.(1)The following information must be given where at the end of the financial year the society has subsidiary undertakings but is not required to prepare consolidated group accounts.E+W+S+N.I.

(2)The name of each subsidiary undertaking shall be stated.

(3)There must be stated with respect to each subsidiary undertaking–

(a)if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b)if it is unincorporated, the address of its principal place of business.

(4)The specific reason why each subsidiary undertaking is not required to be included in consolidated group accounts must be stated.

Holdings in subsidiary undertakingsE+W+S+N.I.

2.(1)There must be stated in relation to shares of each class held by the society in a subsidiary undertaking–E+W+S+N.I.

(a)the identity of the class; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

(2)The shares held by or on behalf of the society itself must be distinguished from those attributed to the society which are held by or on behalf of a subsidiary undertaking.

Financial information about subsidiary undertakingsE+W+S+N.I.

3.(1)There must be disclosed with respect to each subsidiary undertaking–E+W+S+N.I.

(a)the aggregate amount of its capital and reserves as at the end of its relevant financial year; and

(b)its profit or loss for that year.

(2)The information referred to in sub-paragraph (1) need not be given if the society’s investment in the subsidiary undertaking is included in the society’s accounts by way of the equity method of valuation or if–

(a)the subsidiary undertaking is not required by any provision of [F232the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(3)Information otherwise required by this paragraph need not be given if it is not material–

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate section 72F(2), or

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(4)For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is–

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

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Amendments (Textual)

Financial years of subsidiary undertakingsE+W+S+N.I.

4.Where—

(a)disclosure is made under paragraph 3(1) with respect to a subsidiary undertaking; and

(b)that undertaking’s financial year does not end with that of the society,

there must be stated in relation to that undertaking the date on which its last financial year before the end of the society’s financial year ended.

Significant holdings in undertakings other than subsidiary undertakingsE+W+S+N.I.

5.(1)The information required by paragraphs 6 and 7 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not a subsidiary undertaking of the society.E+W+S+N.I.

(2)A holding is significant for this purpose if–

(a)it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or

(b)the amount of the holding (as stated or included in the society’s accounts) exceeds one-fifth of the amount (as so stated) of the society’s assets.

6.(1)The name of the undertaking must be stated.E+W+S+N.I.

(2)There must be stated–

(a)if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and

(b)if it is unincorporated, the address of its principal place of business.

(3)There must also be stated–

(a)the identity of each class of shares in the undertaking held by the society; and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

(4)Information otherwise required by this paragraph need not be given if it is not material–

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or ,where appropriate, section 72F(2), or

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

7.(1)There must also be stated–E+W+S+N.I.

(a)the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and

(b)its profit or loss for that year.

(2)That information need not be given if the investment of the society in all undertakings in which it has a significant holding is shown, in aggregate, in the notes to the accounts by way of the equity method of valuation.

(3)That information need not be given in respect of an undertaking if

(a)the undertaking is not required by any provision of [F233the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.

(4)Information otherwise required by this paragraph need not be given if it is not material–

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate, section 72F(2), or

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(5)For the purposes of this paragraph the “relevant financial year” of an undertaking is –

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

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Amendments (Textual)

Construction of references to shares held by societyE+W+S+N.I.

8.(1)References in this Part of this Schedule to shares held by a society shall be construed as follows.E+W+S+N.I.

(2)For the purposes of paragraphs 2 and 3–

(a)shares held by a subsidiary undertaking, or by a person acting on behalf of the society or a subsidiary undertaking are treated as if they were held by the society; but

(b)shares held on behalf of a person other than the society or a subsidiary undertaking are not treated as if they were held by the society.

(3)For the purposes of paragraphs 5 to 7–

(a)shares held on behalf of a society by any person are treated as if they were held by the society; but

(b)shares held on behalf of a person other than the society are not treated as if they were held by the society.

(4)For the purposes of paragraphs 2 to 7, shares held by way of security shall be treated as if they were held by the person providing the security –

(a)where apart from the right to exercise them for the purposes of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions, and

(b)where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in his interests.

PART 2E+W+S+N.I.Societies required to prepare consolidated group accounts

Subsidiary undertakingsE+W+S+N.I.

9.(1)The following information must be given with respect to the undertakings that are subsidiary undertakings of the society at the end of the financial year.E+W+S+N.I.

(2)The name of each undertaking must be stated.

(3)There must be stated–

(a)if it is incorporated outside the United Kingdom, the country in which it is incorporated;

(b)if it is unincorporated, the address of its principal place of business.

(4)It must be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reason for excluding it from the consolidation must be given.

(5)It must be stated with respect to each subsidiary undertaking of the society by virtue of which of the conditions specified in [F234section 1162 of the Companies Act 2006] it is a subsidiary undertaking of the society.

(6)That information need not be given in relation to a subsidiary undertaking if—

(a)the relevant condition is that specified in subsection (2)(a) of that section, and

(b)the society that is its immediate parent undertaking (within the meaning of [F235section 1162 of the Companies Act 2006]) holds the same proportion of the shares in the undertaking as it holds voting rights.

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Amendments (Textual)

Holdings in subsidiary undertakingsE+W+S+N.I.

10.(1)The following information must be given with respect to the shares of a subsidiary undertaking held—E+W+S+N.I.

(a)by the society, and

(b)by the group,

and the information required under paragraphs (a) and (b) must (if different) be shown separately.

(2)There must be stated–

(a)the identity of each class of shares held, and

(b)the proportion of the nominal value of the shares of that class represented by those shares.

Financial information about subsidiary undertakings not included in the consolidationE+W+S+N.I.

11.(1)There must be shown with respect to each subsidiary undertaking not included in the consolidation–E+W+S+N.I.

(a)the aggregate amount of its capital and reserves as at the end of its relevant financial year, and

(b)its profit or loss for that year.

(2)The information referred to in sub-paragraph (1) need not be given if the group’s investment in the subsidiary undertaking is included in the accounts by way of the equity method of valuation or if –

(a)the subsidiary undertaking is not required by any provision of [F236the Companies Act 2006] to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and

(b)the holding of the group is less than 50 per cent of the nominal value of the shares in the subsidiary undertaking.

(3)Information otherwise required by this paragraph need not be given if it is not material—

(a)in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);

(b)in the case of IAS accounts, to the requirement under international accounting standards that such accounts achieve a fair presentation.

(4)For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is –

(a)if its financial year ends with that of the society, that year, and

(b)if not, its financial year ending last before the end of the society’s financial year.

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Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Amendments (Textual)