The Building Societies (Designated Capital Resources) (Permanent Interest Bearing Shares) Order 1991

Article 2.1

SCHEDULE 2 THE DISQUALIFYING TERMS FOR PERMANENT INTEREST BEARING SHARES

1.  The disqualifying terms are

(a) any term which has effect so as to prohibit, restrict or impose any sanction against the taking by the society of any steps towards

(i) amalgamation with another society under section 93 of and Schedule 16 to the Act;

(ii) transfer of its engagements to any extent to another society in accordance with section 94 of and Schedule 16 to the Act; or

(iii) transfer of the whole of its business to a company in accordance with the applicable provisions.

(b) any term which has the effect that the rate of interest, or as the case may be, margin, specified in respect of the shares is increased by more than

(i) 0.75% in a single step;

(ii) 0,75% in aggregate by a number of steps in any period of 5 years; or

(iii) 1.5% in aggregate by a number of steps without limit of time,

ascertained in accordance with paragraph 2 below.

2.—(1) The increase of the rate of interest for the purposes of an issue of permanent interest bearing shares the issue terms whereof specify a stepped rate, is to be ascertained–

(a) for the purposes of paragraph 1(b)(i) above, by deducting from the rate of interest specified for the period immediately after the increase the rate of interest specified for the period immediately before the increase;

(b) for the purposes of paragraph 1(b)(ii) above, by deducting from the highest rate of interest specified for any part of any period of five years, the lowest rate of interest specified for any other part of that period;

(c) for the purposes of paragraph 1(b)(iii) above, by deducting from the highest rate of interest specified for any period, the lowest rate of interest specified for any other period.

(2) The increase of the margin for the purposes of an issue of permanent bearing shares the issue terms whereof specify a floating rate, being a market rate varied by a margin, is to be ascertained in the manner set out in subparagraph (1) above, save that references to the rate of interest specified shall be read as references to the margin specified.