The Building Societies (Supplementary Capital) Order 1988

Citation and commencement

1.  This Order may be cited as the Building Societies (Supplementary Capital) Order 1988 and shall come into force on 18th May 1988.

Interpretation

2.  In this Order—

“the Act” means the Building Societies Act 1986,

“aggregated” means aggregated for the purposes of the first criterion in section 45(3) (criteria of prudent management) of the Act,

“balance sheet” means a balance sheet within annual accounts a copy of which has been sent to the Commission and the central office under section 81(2) (laying and furnishing accounts) of the Act,

“society” means a building society, and

“supplementary capital” means a description of capital resource which is by virtue of and subject to the provisions of this Order to be aggregated with the reserves of a society.

Specification of supplementary capital

3.  The Schedule to this Order shall have effect for the specification of supplementary capital and for determining the extent to which, subject to Article 4 below, it is to be aggregated with the reserves of the society.

Overall limit on extent of aggregation

4.—(1) In determining the extent to which supplementary capital of a society is to be aggregated with the reserves of the society there shall be disregarded the amount (if any) by which the total of the relevant amounts of the society’s supplementary capital as identified in accordance with paragraph 2(2) and (3) of Part I of the Schedule to this Order exceeds half the amount of the society’s primary capital as shown in the society’s latest balance sheet.

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

(a) “primary capital” means—

(i) where there is no revaluation reserve shown in the society’s latest balance sheet, the total reserves so shown, and

(ii) where a revaluation reserve is shown therein, those total reserves less that revaluation reserve, and

(b) where a society has been formed by the amalgamation of two or more societies under section 93 (amalgamations) of the Act and, as such, has no latest balance sheet, any amount in the latest balance sheet of the society shall be taken to mean the total of the corresponding amounts in the latest respective balance sheets of those two or more societies.

Revocation of existing Order

5.  The Building Societies (Designated Capital Resources) Order 1988(1) is hereby revoked.

In witness whereof the common seal of the Building Societies Commission is hereunto fixed, and is authenticated by me, a person authorised under paragraph 14 of Schedule 1 to the Building Societies Act 1986, on 19th April 1988.

L.S.

Mrs. P. H. Gevers

Secretary to the Commission

We consent to this Order.

Mark Lennox-Boyd

Peter Lloyd

Two of the Lords Commissioners of Her Majesty’s Treasury

20th April 1988