The Building Societies (Accounts and Related Provisions) (Amendment) Regulations 1995

Explanatory Note

(This note is not part of the Regulations)

These Regulations amend regulation 10 of, and Schedule 10 to, the Building Societies (Accounts and Related Provisions) Regulations 1992. Regulation 10 and Schedule 10 make provision for the form of the summary financial statement that the directors of a building society are required to prepare for members and depositors with respect to each financial year, and the information which must be included in it.

The Regulations substitute a new Schedule 10 for the existing one. The new Schedule 10 provides for a shorter form of prescribed statement (which explains, among other things, that the summary financial statement is only a summary of information in the annual accounts, directors' report and annual business statement) for the purposes of section 76(4) of the Building Societies Act 1986.

The requirement that the summary directors' report should contain three separate sections under specified headings has been removed, but a requirement that the report should include a summary review of the business and of events during the relevant year and a summary indication of likely developments is retained. The report must also now include a summary review of any significant events which have occurred since the end of the financial year with which the summary financial statement deals.

The part of the summary statement which deals with the results for the year has been expanded to include a number of additional items derived from the income and expenditure account. The information to be included in that part of the summary statement which deals with the financial position at the end of the year has also been expanded to include amounts in respect of subordinated liabilities and permanent interest bearing shares.

The number of items required to be included in the summary of key financial ratios has been reduced and a requirement introduced that an explanation of the significance of those ratios be provided.

The Regulations contain a transitional provision allowing building societies to prepare summary financial statements with respect to financial years which commenced before the coming into force of these Regulations on the basis that the Regulations had not been made.

A compliance cost assessment of the effect that this instrument would have on the cost of business is available from the Secretary, Building Societies Commission, 15 Great Marlborough Street, London W1V 2LL.