The Building Societies (Non-Retail Funds and Deposits) (Limit on Election) Order 1995

Explanatory Note

(This note is not part of the Order)

Section 7 of the Building Societies Act 1986 gives power to societies to raise funds and borrow money but imposes a limit currently 40%, on the proportion of money which may be raised by non-retail borrowing as defined in this section. Subsection (5) provides that a society may elect with respect to any financial year that certain shares held by or sums deposited with the society by certain bodies, such as friendly societies, charities and trades unions, specified by subsection (4) (see note below) shall not be counted towards the limit on non-retail funds. Subsection (6) provides that if the liability to any one person exceeds a prescribed amount, the whole of that liability shall be disregarded for the purpose of such an election and shall be counted towards the limit on non-retail funds. Subsection (16) fixes the amount for the purpose of subsection (6) at £50,000 or such other amount as is for the time being substituted for it by order of the Building Societies Commission made with the consent of the Treasury. This Order made in exercise of that power substitutes £100,000 for £50,000.

A review of the cost of compliance with this Order has been undertaken and the resulting compliance cost assessment may be obtained from the Secretary, Building Societies Commission, 15 Great Marlborough Street, London W1V 2LL.