Building Societies Act 1997

Section 46(1).

SCHEDULE 8 Transitional provisions and savings

Alterations of purpose, powers and rules

1 (1) At any time during the period beginning two months after the passing of this Act and ending with the commencement of sections 1 and 2 of this Act, a building society may, for the purposes of the transition to the 1986 Act as amended by those sections—

(a) by special resolution, alter its purpose or principal purpose, alter its powers and alter its rules; and

(b) send to the central office four copies of a record of the alterations accompanied by a statutory declaration by the secretary that the alterations were effected by a resolution passed as a special resolution and that the record is a true record of the resolution.

(2) On altering its purpose or principal purpose, its powers and its rules under this paragraph, the building society shall determine the date on which the society intends the alterations to take effect and the record of the alterations sent to the central office shall specify that date (in this paragraph referred to as “the specified date”).

(3) Subject to sub-paragraph (4) below, the central office, if satisfied that the alterations are in conformity with the 1986 Act as amended by sections 1 and 2 of this Act, shall—

(a) retain and register one copy of the record of the alterations;

(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 that registration certificate, in the public file of the society.

(4) No registration of a record of alterations shall be effected by the central office under sub-paragraph (3) above before the end of the period of 21 days beginning with the date on which it receives copies of the record under sub-paragraph (1) above.

(5) A record of alterations registered under this paragraph shall take effect on the specified date or, if registration of the record is not effected until a later date, that later date.

2 (1) Before the end of the transitional period each existing building society shall—

(a) by special resolution, alter its purpose or principal purpose, alter its powers and alter its rules, so as (in each case) to secure conformity with the 1986 Act as amended by sections 1 and 2 of this Act; and

(b) send to the central office four copies of a record of the alterations accompanied by a statutory declaration by the secretary that the alterations were effected by a resolution passed as a special resolution and that the record is a true record of the resolution.

(2) On altering its purpose or principal purpose, its powers and its rules under this paragraph, the building society shall determine the date on which the society intends the alterations to take effect and the record of the alterations sent to the central office shall specify that date (in this paragraph referred to as “the specified date”).

(3) No date shall be specified under sub-paragraph (2) above which falls more than six months after the date of the meeting at which the special resolution was agreed.

(4) Subject to sub-paragraph (5) below, the central office, if satisfied that the alterations are in conformity with the 1986 Act as amended by sections 1 and 2 of this Act, shall—

(a) retain and register one copy of the record of the alterations;

(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 that registration certificate, in the public file of the society.

(5) No registration of a record of alterations shall be effected by the central office under sub-paragraph (4) above before the end of the period of 21 days beginning with the date on which it receives copies of the record under sub-paragraph (1) above.

(6) A record of alterations registered under this paragraph shall take effect on the specified date or, if registration of the record is not effected until a later date, that later date.

(7) In this paragraph—

• “existing building society” means a building society registered under the 1986 Act immediately before the commencement of sections 1 and 2 of this Act;

• “the transitional period” means the period beginning with that commencement and expiring with such day as the Commission, with the consent of the Treasury, prescribes by order made by a statutory instrument.

Default powers

3 (1) If the central office has not, before the end of the transitional period, received from an existing building society copies of a record of alterations in accordance with paragraph 1 or 2 above, the society shall be treated as having, by special resolution—

(a) altered its purpose or principal purpose to that required by section 5(1) of the 1986 Act as amended by section 1(1) of this Act;

(b) so altered its powers as to include all powers which were exercisable by it immediately before the commencement of sections 1 and 2 of this Act; and

(c) made such alteration of its rules as, in conformity with model rules made under this paragraph, the central office directs.

(2) The Commission may, by order made by a statutory instrument made with the consent of the Treasury, prescribe model rules for building societies for the purposes of this paragraph.

(3) Where, under this paragraph, a society is treated as having by special resolution, altered its purpose or principal purpose, its powers and its rules, the central office shall prepare three copies of a record of the alterations and shall—

(a) retain and register one copy;

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

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

(4) A record of alterations so registered shall have effect for all purposes of the society’s memorandum and rules until further alterations are made under paragraph 4 of Schedule 2 to the 1986 Act.

(5) Such fee as is prescribed shall be due from the society to the Chief Registrar for the registration of a record of alterations under this paragraph.

(6) In this paragraph—

• “existing building society” means a building society registered under the 1986 Act immediately before the commencement of sections 1 and 2 of this Act;

• “prescribed”—

  (a)

  except in sub-paragraph (5) above, means prescribed by the Commission, with the consent of the Treasury, by order made by statutory instrument; and

  (b)

  in that sub-paragraph, means prescribed by the Chief Registrar, with the consent of the Treasury, by order so made;

• “the transitional period” means the period beginning with that commencement and expiring with such day as is prescribed.

Existing members to whom advances have been made

4 (1) Nothing in section 2 of this Act shall affect the operation of sub-paragraph (2) of paragraph 6 of Schedule 2 to the 1986 Act in relation to any person who, immediately before the commencement of that section, is the holder of a share on which an advance has been made.

(2) Nothing in that section shall affect the operation of sub-paragraph (3) of that paragraph in relation to any person who, immediately before the commencement of that section, is a member of a building society to whom an advance has been made under rules made in pursuance of paragraph 5(1) or (2) of that Schedule.

Existing borrowing members which are corporations

5 Nothing in section 2 of this Act shall affect the operation of Schedule 2 to the 1986 Act in relation to any body corporate which, immediately before the commencement of that section, is a borrowing member of a building society within the meaning given by paragraph 5(2) of that Schedule (as substituted by that section).

Existing fully secured loans

6 (1) Subject to subsection (7) of section 6B of the 1986 Act—

(a) any advance which immediately before the commencement of that section was or was treated as a class 1 advance shall be treated as a loan falling within paragraph (a) of subsection (4) of that section;

(b) any advance which immediately before that commencement was or was treated as a class 2 advance shall be treated as a loan falling within that paragraph if the building society concerned determines that, on the assumption mentioned in sub-paragraph (2) below, it would have been a class 1 advance;

(c) any advance not falling within paragraph (b) above which immediately before that commencement was or was treated as a class 2 advance shall be treated as a loan falling within paragraph (b) of that subsection; and

(d) any advance which immediately before that commencement neither was nor was treated as a class 1 or a class 2 advance shall be treated as a loan falling within paragraph (c) of that subsection.

(2) The assumption is that section 11 of the 1986 Act had effect at all material times—

(a) with the substitution for paragraph (b) of subsection (2) of the following paragraph—

“(b) the land is for residential use;”; and

(b) with the omission from subsection (3) of the words “by the borrower or a dependant of his of a prescribed description”.

Existing shareholders

7 Unless the contrary is shown, a building society may assume that any shares in the society which are held by an individual at the commencement of section 8 of this Act are held otherwise than as a bare trustee (or, in Scotland, a simple trustee) for a body corporate, or for persons who include a body corporate.

Existing depositors and shareholders

8 (1) Nothing in section 9 of this Act shall affect the operation of the 1986 Act in relation to—

(a) any deposit accepted by a building society from an individual before the commencement of that section;

(b) any deposit accepted by a building society from an individual to whom sub-paragraph (2) below applies which is to be credited to a deposit account opened before that commencement;

(c) any deposit accepted by a building society from an individual which is to be credited to a tax-exempt special savings account opened before that commencement; or

(d) any share issued by a building society to a body corporate before that commencement.

(2) This sub-paragraph applies to an individual if—

(a) a deposit of his is held in a deposit account opened before the commencement of section 9 of this Act;

(b) he has been notified by the building society that he may transfer the deposit without penalty into an account which, at the date of the notice, was an equivalent share account; and

(c) he has chosen not to do so.

(3) In this paragraph—

• “access period”, in relation to a deposit or share account, means the period of notice required for making withdrawals from the account;

• “equivalent share account”, in relation to a deposit account, means a share account—

  (a)

  whose access period is no longer than that of the deposit account; and

  (b)

  whose rate of interest is not less than that of each other share account with the society which has the same access period or, where there is no such account, that of any one share account with the society which has a longer access period;

• “tax-exempt special savings account” has the meaning given by section 326A(2) of the [1988 c. 1.] Income and Corporation Taxes Act 1988.

(4) In relation to anything which, after the commencement of section 9 of this Act, is done by a building society under paragraph (d) of section 8(2) of the 1986 Act, sub-paragraphs (1) and (2) above shall have effect as if any reference to that commencement were a reference to the expiry of the period mentioned in that paragraph.

Existing transfer statements referring to the abolition of priority liquidation distribution rights

9 (1) Where before the commencement of section 40 of this Act, a building society issued a transfer statement which satisfies the requirements of sub-paragraph (2) below and either—

(a) the transfer of the society’s business to the company which is to be its successor is effected after that commencement; or

(b) that transfer was effected after the relevant date and before that commencement and the company is not being wound up at that commencement,

section 100 of the 1986 Act shall be deemed to have had effect in relation to the transfer as if section 40 of this Act had come into force on that date.

(2) The requirements of this sub-paragraph are that the statement—

(a) referred to the possibility of provision being made to the like effect as section 40 of this Act; and

(b) stated that, if such provision were made, either no rights to priority liquidation distributions would be conferred on qualifying members of the society or, if such rights had been so conferred, they would be withdrawn.

(3) In this paragraph—

• “the relevant date” means 6th November 1996;

• “transfer statement” has the same meaning as in Part I of Schedule 17 to the 1986 Act.

Existing specially formed successor companies

10 (1) This paragraph applies where before the passing of this Act a company has been specially formed by a building society to be its successor.

(2) Nothing in section 101 of the 1986 Act as substituted by section 41 of this Act shall be taken—

(a) to impose any requirement which would not be imposed, or to render void any provision, allotment or registration which would not be rendered void, if that section of this Act had not been enacted; or

(b) to prevent any alterations in the provisions of the company’s articles of association which are such as to secure that the company does not contravene, or that those provisions are consistent with, subsection (1) of section 101 of that Act as so substituted.