The Building Societies Act 1986 (Substitution of Specified Amounts and Modification of the Funding Limit Calculation) Order 2007

EXPLANATORY NOTE

(This note is not part of the Order)

This Order amends, and modifies the application of, provisions of the Building Societies Act 1986 (c.53).

Article 2 amends various financial amounts that are specified in the Building Societies Act 1986. The changes affect the rules concerning the election of a building society’s directors, arrangements between a building society and the society’s director or a connected person, loans by a building society to a director of the society, disclosure and records of certain business entered into by a building society’s director and the deposit required for requisitioning a special meeting of a building society.

Under section 7 of the Building Societies Act 1986 at least 50 per cent. of a building society’s liabilities must be shares owned by individuals. Article 3 requires deposits made by individuals with a building society’s subsidiaries in another EEA State, the Channel Islands, the Isle of Man or Gibraltar, to be disregarded for the purpose of calculating that percentage. The maximum amount of such deposits which is to be excluded is ten per cent of what would have been the value of the building society’s liabilities but for the exclusion.

A full regulatory impact assessment of the effect that this instrument will have on the costs of business may be obtained from the General Insurance, Mutuals and Inclusion Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ or from HM Treasury’s website (www.hm-treasury.gov.uk) and is annexed to the Explanatory Memorandum which is available alongside the instrument on the OPSI website (www.opsi.gov.uk).