The Building Society Special Administration (Scotland) Rules 2009

EXPLANATORY NOTE

(This note is not part of the Rules)

These Rules set out the procedure for the building society special administration process under Part 3 of the Banking Act 2009 (c.1) (“the Banking Act”) in Scotland. Part 3 of the Banking Act is applied in relation to building societies by section 90C of the Building Societies Act 1986 (c.53) and by the Building Societies (Insolvency and Special Administration) Order 2009 (S.I. 2009/805        

The main features of building society special administration are that:

(a) it is used where part of the business of a building society is sold to a commercial purchaser or transferred to a bridge bank in accordance with section 12 of the Banking Act;

(b) the court appoints a building society special administrator on the application of the Bank of England;

(c) the special administrator ensures that the non-sold or non-transferred part of the building society provides services or facilities to enable the commercial purchaser or bridge bank to operate effectively;

(d) the special administrator has two objectives (Objective 1 – supporting the private purchaser or bridge bank; and Objective 2 – normal administration); and

(e) in other respects the process is the same as for administration under Schedule B1 to the Insolvency Act 1986, subject to specified modifications.

Part 2 of the Rules sets out special provisions about applications for building society special administration.

Part 3 of the Rules sets out special provisions about the building society special administration process.

Part 4 of the Rules applies specified provisions of the Insolvency (Scotland) Rules 1986 for general purposes in connection with building society special administration, subject to a number of general and specific modifications.