The Building Societies (Designation of Qualifying Bodies) Order 1991.

Explanatory Note

(This note is not part of the Order)

1.  This Order designates a description of bodies corporate as suitable for investment or support by building societies under section 18 of the Building Societies Act 1986, so as to add “appropriate payment services vehicle” as a further type of designated body.

2.  An appropriate payment services vehicle is a body corporate (not being one excluded by the particular restrictions for payment services vehicles) formed for the purpose of, or the objects of which include the carrying on of banking services including money transmission services. The particular restrictions for payment services vehicles, except where societies hold less than 2% of the issued shares or corresponding membership rights, are that a body corporate is not an appropriate payment services vehicle for a society where: it is a market maker; its business includes lending money, secured or unsecured on its own account, save in narrow circumstances provided for in the Order; its business requires it to be authorised for the purposes of the Banking Act 1987; its business includes activities the society itself has no power to undertake either because the society has not adopted the necessary adoptable power or because the activities would contravene a restriction on the extent of a power which the society has adopted; or it has a subordinate organisation which is not within the prescribed range, that is bodies which a society may invest in or support under section 18, but as regards bodies designated by description providing they are one tier organisations.

3.  Investment is defined by section 18 of the Act as acquiring and holding shares in and forming, or taking part in forming, bodies corporate. Support is defined by that section as provision of loans, grants, guarantees, services or property to bodies corporate.