SCHEDULE 10A Disclosures about directors, other officers and employees in notes to accounts
Section 72J
Part 1 Emoluments of and dealings with directors and other officers
Aggregate amount of director’s remuneration etc
1. (1) The following must be shown—
(a) the aggregate amount of salary and fees and sums paid by way of expenses allowance (so far as they are chargeable to United Kingdom tax) paid to or receivable by directors in respect of qualifying services;
(b) the aggregate amount of bonuses paid to or receivable by directors in respect of qualifying services;
(c) the aggregate amount of the estimated money value of any other benefits paid to or receivable by directors in respect of qualifying services otherwise than in cash;
(d) the aggregate of the amount of gains made by directors on the exercise of share options;
(e) the aggregate of the following–
(i) the amount of money paid to or receivable by directors under long-term incentive schemes in respect of qualifying services; and
(ii) the net value of assets (other than money and share options) received or receivable by directors under such schemes in respect of such services;
(f) the aggregate value of any society contributions paid, or treated as paid, to a pension scheme in respect of directors' qualifying services, being contributions by reference to which the rate or amount of any money purchase benefits that may become payable will be calculated;
(g) the aggregate amount of the increase during the financial year in the value of any accrued pension or accrued lump sum comprising defined benefits payable in respect of any qualifying services performed by directors during the financial year; and
(h) the total aggregate amounts in paragraphs (a) to (g).
(2) In this paragraph–
“accrued pension” and “accrued lump sum”, in relation to any pension scheme and any director, mean respectively the amount of the annual pension, and the amount of the lump sum, which would be payable under the scheme on his attaining normal pension age if–
he had left the society’s service at the end of the financial year;
there were no increase in the general level of prices in the United Kingdom during the period beginning with the end of that year and ending with his attaining that age;
no question arose of any commutation of the pension or inverse commutation of the lump sum; and
any amounts attributable to voluntary contributions paid by the director to the scheme, and any money purchase benefits which would be payable under the scheme, were disregarded;
“amount”, in relation to a gain made on the exercise of a share option means the difference between–
the market price of the shares on the day on which the option was exercised, and
the price actually paid for the shares;
“collective money purchase benefit” has the meaning given in section 1 or 52 of the Pension Schemes Act 2021;
“defined benefits” means retirement benefits payable under a pension scheme which are not money purchase benefits;
“defined benefit scheme”, in relation to a director, means a pension scheme which is not a money purchase scheme;
“long-term incentive scheme” means any agreement or arrangement under which money or other assets may become receivable by a director and which includes one or more qualifying conditions with respect to service or performance which cannot be fulfilled within a single financial year; and for this purpose the following are disregarded–
bonuses the amount of which falls to be determined by reference to service or performance within a single financial year;
compensation for loss of office, payments for breach of contract and other termination payments; and
retirement benefits;
“money purchase benefits”, in relation to a director, means—
retirement benefits payable under a pension scheme the rate or amount of which is calculated by reference to payments made, or treated as made, by the director or by any other person in respect of the director and which fall within paragraph 1A; and
collective money purchase benefits;
“money purchase scheme”, in relation to a director, means a pension scheme under which all of the benefits that may become payable to or in respect of the director are money purchase benefits;
“normal pension age”, in relation to any pension scheme and any director, means the age at which the director will first become entitled to receive a full pension on retirement of any amount determined without reduction to take account of its payment before a later age (but disregarding any entitlement to pension upon retirement in the event of illness, incapacity or redundancy);
“net value”, in relation to any assets received or receivable by a director, means value after deducting any money paid or other value given by the director in respect of those assets;
“qualifying services”, in relation to any person, means his services as a director of the society, and his services while director of the society–
as director of any of its connected undertakings; or
otherwise in connection with the management of the affairs of the society or any of its connected undertakings;
“shares” means shares (whether allotted or not) in any connected undertaking of the society, and includes a share warrant as defined by section 779(1) of the Companies Act 2006;
“share option” means a right to acquire shares;
“society contributions”, in relation to a pension scheme and a director, means any payments (including insurance premiums) made, or treated as made, to the scheme in respect of the director by a person other than the director;
“value”, in relation to shares received or receivable by a director on any day, means the market price of the shares on that day.
(3) For the purposes of this paragraph amounts paid or receivable or share options granted in respect of a person’s accepting office as a director are treated as amounts paid or receivable or share options granted in respect of his services as a director.
(4) Where a pension scheme provides for any benefits that may become payable to or in respect of any director to be whichever are the greater of –
(a) money purchase benefits as determined by or under the scheme; and
(b) defined benefits as so determined,
the society may assume for the purposes of this paragraph that those benefits will be money purchase benefits, or defined benefits, according to whichever appears more likely at the end of the financial year.
(5) For the purpose of determining whether a pension scheme is a money purchase or defined benefit scheme, any death in service benefits provided for by the scheme are disregarded.
1A (1) This paragraph applies for the purposes of paragraph (a) of the definition of “money purchase benefits” in paragraph 1(2).
(2) A benefit other than a pension in payment falls within this paragraph if its rate or amount is calculated solely by reference to assets which (because of the nature of the calculation) must necessarily suffice for the purposes of its provision to or in respect of the director.
(3) A benefit which is a pension in payment falls within this paragraph if—
(a) its provision to or in respect of the director is secured by an annuity contract or insurance policy made or taken out with an insurer, and
(b) at all times before coming into payment the pension was a benefit falling within this paragraph by virtue of sub-paragraph (2).
(4) For the purposes of sub-paragraph (2) it is immaterial if the calculation of the rate or amount of the benefit includes deductions for administrative expenses or commission.
(5) In this paragraph references to a pension do not include income withdrawal or dependants' income withdrawal (within the meaning of paragraphs 7 and 21 of Schedule 28 to the Finance Act 2004).
Details of individual directors' remuneration etc
2. (1) There must be shown in respect of each director by name, so much of each of the relevant aggregates as is attributable to that director.
(2) In this paragraph “relevant aggregates” means the aggregates shown under paragraph 1(1)(a) to (h).
(3) Sub-paragraphs (2) to (5) of paragraph 1 apply for the purposes of this paragraph as they apply for the purposes of that paragraph.
Excess retirement benefits of directors and past directors
3. (1) Subject to sub-paragraph (2), there must be shown the aggregate amount of–
(a) so much of retirement benefits paid to or receivable by directors under pension schemes; and
(b) so much of retirement benefits paid to or receivable by past directors under such schemes,
as (in each case) is in excess of the retirement benefits to which they were respectively entitled on the relevant date.
(2) For the purposes of sub-paragraph (1) the relevant date is whichever is the later of
(a) the date on which the benefits first became payable;
(b) 27 March 1998; or
(c) the date on which the provisions of the Building Societies Act 1997 specified in Part 2 of the Schedule to the Building Societies Act 1997 (Commencement) (No.3) Order 1997, have come into force in accordance with Article 2 of that Order in relation to the society.
(3) Amounts paid or receivable under a pension scheme need not be included in the aggregate amount if –
(a) the funding of the scheme was such that the amounts were or, as the case may be, could have been paid without recourse to additional contributions; and
(b) amounts were paid to or receivable by all pensioner members of the scheme on the same basis,
and in this sub-paragraph “pensioner member”, in relation to a pension scheme, means any person who is entitled to the present payment of retirement benefits under the scheme.
(4) In this paragraph–
(a) references to retirement benefits include benefits otherwise than in cash; and
(b) in relation to so much of retirement benefits as consists of a benefit otherwise than in cash, references to their amount are to the estimated money value of the benefit,
and the nature of any such benefit must also be disclosed.
Compensation to directors for loss of office
4. (1) There must be shown the amount of any compensation in respect of loss of office paid to or receivable by each director or past director by name, together with the aggregate amount of any such compensation.
(2) There must be shown the aggregate amount of any compensation referred to in sub-paragraph (1) in respect of the preceding financial year.
(3) The amounts referred to in sub-paragraph (1) include compensation received or receivable by a director or past director for–
(a) loss of office as director of the society, or
(b) loss, while director of the society or on or in connection with his ceasing to be a director of it, of–
(i) any other office in connection with the management of the society’s affairs, or
(ii) any office as director or otherwise in connection with the management of the affairs of any connected undertaking of the society.
(4) References in this paragraph–
(a) to compensation include benefits paid or receivable other than in cash; and
(b) to the amount of compensation are to the estimated money value of the benefit;
(5) The nature of any such compensation must be disclosed.
(6) In this paragraph, references to compensation for loss of office include the following–
(a) compensation in consideration for, or in connection with, a person’s retirement from office; and
(b) where such a retirement is occasioned by a breach of the person’s contract with the society or with a subsidiary undertaking of the society–
(i) payments made by way of damages for the breach; or
(ii) payments made by way of settlement or compromise of any claim in respect of the breach.
Sums paid to third parties in respect of directors' services
5. (1) There must be shown the aggregate amount of any consideration paid to or receivable by third parties for making available the services of any person–
(a) as a director of the society, or
(b) while director of the society–
(i) as director of any of its connected undertakings, or
(ii) otherwise in connection with the management of the affairs of the society or any of its connected undertakings.
(2) The reference in sub-paragraph (1) to consideration includes benefits paid or receivable other than in cash; and–
(a) the nature of any such consideration must be disclosed, and
(b) in relation to such consideration the reference to its amount is to the estimated money value of the benefit.
(3) The reference in sub-paragraph (1) to third parties is to persons other than –
(a) the director himself or a person connected with him or a body corporate associated with him, and
(b) the society or any of its connected undertakings.
Supplementary provisions regarding directors' remuneration
6. (1) The following applies with respect to the amounts to be shown under paragraphs 1 to 5.
(2) The amount in each case includes all relevant sums paid by or receivable from–
(a) the society;
(b) the society’s connected undertakings; and
(c) any other person,
except sums to be accounted for to the society or any of its connected undertakings.
(3) References to amounts paid to or receivable by a person include amounts paid to or receivable by a person connected with him or a body corporate associated with him (but not so as to require an amount to be counted twice).
7. (1) The amounts to be shown for any financial year under paragraphs 1 to 5 are the sums receivable in respect of that year (whenever paid) or, in the case of sums not receivable in respect of a period, the sums paid during that year.
(2) But where–
(a) any sums are not shown in a note to the accounts for the relevant financial year on the ground that the person receiving them is liable to account for them as mentioned in paragraph 6(2), but the liability is thereafter wholly or partly released or is not enforced within a period of 2 years; or
(b) any sums paid by way of expenses allowance are charged to United Kingdom income tax after the end of the relevant financial year,
those sums must, to the extent to which the liability is released or not enforced or they are charged as mentioned (as the case may be), be shown in a note to the first accounts in which it is practicable to show them and must be distinguished from the amounts to be shown apart from this provision.
8. (1) Where the chief executive of the society is not also a director of the society, he is deemed, for the purposes of paragraphs 1 to 7, to be a director of the society.
(2) In such circumstances there must be a note in the accounts specifying that the chief executive has been so deemed to be a director.
Interpretation of provisions regarding directors remuneration
9. (1) Sub-paragraphs (2) and (3) apply for the interpretation of paragraphs 1 to 8.
(2) For the purposes of paragraphs 1 and 2 a reference to a connected undertaking of the society is to any undertaking which is a connected undertaking at the time the services were rendered, and for the purposes of paragraph 4 is a reference to a connected undertaking immediately before the loss of office as a director.
(3) The following definitions apply–
(a) “pension scheme” has the meaning assigned to “retirement benefits scheme” by section 611 of the Income and Corporation Taxes Act 1988;
(b) “retirement benefits” has the meaning assigned to “relevant benefits” by section 612(1) and (2) of that Act.
(4) In paragraphs 5 and 6, references to a person being “connected” with a director, and to a director being “associated with” a body corporate, shall be construed in accordance with section 70 of this Act.
Directors' loans and transactions
10. (1) This paragraph applies, subject to sub-paragraph (4), in relation to–
(a) loans from and other transactions and arrangements with the society described in section 65 (which restricts loans to and other transactions and arrangements with directors and persons connected to them), other than those to which section 65(5) and (6) applies, and
(b) in the case of a society the directors of which are required to prepare consolidated group accounts, loans from and other transactions and arrangements with a subsidiary undertaking of the society to which paragraph (a) would apply were the society rather than the subsidiary undertaking a party to them.
(2) The notes to the annual accounts must contain a statement, in relation to such loans, transactions and arrangements, showing–
(a) the aggregate amounts outstanding under them at the end of the financial year; and
(b) the numbers of persons for whom such loans, transactions and arrangements were made.
(3) The notes to the annual accounts must, in relation to any loan, or other transaction or arrangement subsisting during or at the end of the financial year, make the following disclosures–
(a) where a copy of it or a memorandum of its terms is included in the register maintained under section 68, the existence of the register and the availability of requisite particulars from it for inspection must be disclosed;
(b) where it comes within paragraph (1)(b), its particulars must be disclosed unless it was one which would, had the subsidiary undertakings of the society formed part of the society, have been exempted from the obligations imposed by section 68.
(4) This paragraph applies in relation to loans to, and other transactions and arrangements with, a person connected with a director of the society where the society (or in the case of a subsidiary undertaking incorporated in the United Kingdom, the subsidiary undertaking) has notice of the connection between that director and that person.
Disclosure of auditors' remuneration
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Persons who are to be regarded as associates of a society’s auditors
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PART 2 Information about employees
13. (1) The following information with respect to the employees of a building society must be given in notes to the society’s individual accounts–
(a) the average number of persons employed by the society in the financial year, and
(b) the average number of persons so employed within each category of persons employed by the society.
(2) The average number required by paragraph (1)(a) or (b) is determined by dividing the relevant annual number by the number of complete calendar months in the financial year.
(3) The relevant annual number is determined by ascertaining for each complete calendar month in the financial year–
(a) for the purposes of paragraph (1)(a), the number of persons employed under contracts of service by the society in that month (whether throughout the month or not);
(b) for the purposes of paragraph (1)(b), the number of persons in the category in question of persons so employed;
and, in either case, adding together all the monthly numbers.
(4) In respect of all persons employed by the society during the financial year who are taken into account in determining the relevant annual number for the purposes of paragraph (1)(a) there must also be stated the aggregate amounts respectively of–
(a) wages and salaries paid or payable in respect of that year to those persons;
(b) social security costs incurred by the society on their behalf; and
(c) other pension costs so incurred.
This does not apply in so far as those amounts, or any of them, are stated elsewhere in the society’s accounts.
(5) For the purposes of paragraph (1)(b) the categories of person employed by the society are such as the directors may select, having regard to the manner in which the society’s activities are organised.
(6) This paragraph applies in relation to group accounts as if the undertakings included in those accounts were a single society.
(7) In this paragraph–
(a) “social security costs” means any contribution by the society to any state social security or pension scheme, fund or arrangement;
(b) “pension costs” includes any costs incurred by the society in respect of any pension scheme established for the purpose of providing pensions for persons currently or formerly employed by the society, any sums set aside for future payment of pensions directly by the society to current or former employees and any pensions paid directly to such persons without having been first set aside.
SCHEDULE 10B Disclosures about related undertakings required in note to accounts
Section 72K
PART 1 Societies not required to prepare consolidated group accounts
Subsidiary undertakings
1. (1) The following information must be given where at the end of the financial year the society has subsidiary undertakings but is not required to prepare consolidated group accounts.
(2) The name of each subsidiary undertaking shall be stated.
(3) There must be stated with respect to each subsidiary undertaking–
(a) if it is incorporated outside the United Kingdom, the country in which it is incorporated;
(b) if it is unincorporated, the address of its principal place of business.
(4) The specific reason why each subsidiary undertaking is not required to be included in consolidated group accounts must be stated.
Holdings in subsidiary undertakings
2. (1) There must be stated in relation to shares of each class held by the society in a subsidiary undertaking–
(a) the identity of the class; and
(b) the proportion of the nominal value of the shares of that class represented by those shares.
(2) The shares held by or on behalf of the society itself must be distinguished from those attributed to the society which are held by or on behalf of a subsidiary undertaking.
Financial information about subsidiary undertakings
3. (1) There must be disclosed with respect to each subsidiary undertaking–
(a) the aggregate amount of its capital and reserves as at the end of its relevant financial year; and
(b) its profit or loss for that year.
(2) The information referred to in sub-paragraph (1) need not be given if the society’s investment in the subsidiary undertaking is included in the society’s accounts by way of the equity method of valuation or if–
(a) the subsidiary undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and
(b) the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.
(3) Information otherwise required by this paragraph need not be given if it is not material–
(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate section 72F(2), or
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
(4) For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is–
(a) if its financial year ends with that of the society, that year, and
(b) if not, its financial year ending last before the end of the society’s financial year.
Financial years of subsidiary undertakings
4. Where—
(a) disclosure is made under paragraph 3(1) with respect to a subsidiary undertaking; and
(b) that undertaking’s financial year does not end with that of the society,
there must be stated in relation to that undertaking the date on which its last financial year before the end of the society’s financial year ended.
Significant holdings in undertakings other than subsidiary undertakings
5. (1) The information required by paragraphs 6 and 7 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not a subsidiary undertaking of the society.
(2) A holding is significant for this purpose if–
(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or
(b) the amount of the holding (as stated or included in the society’s accounts) exceeds one-fifth of the amount (as so stated) of the society’s assets.
6. (1) The name of the undertaking must be stated.
(2) There must be stated–
(a) if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and
(b) if it is unincorporated, the address of its principal place of business.
(3) There must also be stated–
(a) the identity of each class of shares in the undertaking held by the society; and
(b) the proportion of the nominal value of the shares of that class represented by those shares.
(4) Information otherwise required by this paragraph need not be given if it is not material–
(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or ,where appropriate, section 72F(2), or
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
7. (1) There must also be stated–
(a) the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year, and
(b) its profit or loss for that year.
(2) That information need not be given if the investment of the society in all undertakings in which it has a significant holding is shown, in aggregate, in the notes to the accounts by way of the equity method of valuation.
(3) That information need not be given in respect of an undertaking if
(a) the undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and
(b) the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.
(4) Information otherwise required by this paragraph need not be given if it is not material–
(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society of the matters set out in section 72B(2) or, where appropriate, section 72F(2), or
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
(5) For the purposes of this paragraph the “relevant financial year” of an undertaking is –
(a) if its financial year ends with that of the society, that year, and
(b) if not, its financial year ending last before the end of the society’s financial year.
Construction of references to shares held by society
8. (1) References in this Part of this Schedule to shares held by a society shall be construed as follows.
(2) For the purposes of paragraphs 2 and 3–
(a) shares held by a subsidiary undertaking, or by a person acting on behalf of the society or a subsidiary undertaking are treated as if they were held by the society; but
(b) shares held on behalf of a person other than the society or a subsidiary undertaking are not treated as if they were held by the society.
(3) For the purposes of paragraphs 5 to 7–
(a) shares held on behalf of a society by any person are treated as if they were held by the society; but
(b) shares held on behalf of a person other than the society are not treated as if they were held by the society.
(4) For the purposes of paragraphs 2 to 7, shares held by way of security shall be treated as if they were held by the person providing the security –
(a) where apart from the right to exercise them for the purposes of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions, and
(b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in his interests.
PART 2 Societies required to prepare consolidated group accounts
Subsidiary undertakings
9. (1) The following information must be given with respect to the undertakings that are subsidiary undertakings of the society at the end of the financial year.
(2) The name of each undertaking must be stated.
(3) There must be stated–
(a) if it is incorporated outside the United Kingdom, the country in which it is incorporated;
(b) if it is unincorporated, the address of its principal place of business.
(4) It must be stated whether the subsidiary undertaking is included in the consolidation and, if it is not, the reason for excluding it from the consolidation must be given.
(5) It must be stated with respect to each subsidiary undertaking of the society by virtue of which of the conditions specified in section 1162 of the Companies Act 2006 it is a subsidiary undertaking of the society.
(6) That information need not be given in relation to a subsidiary undertaking if—
(a) the relevant condition is that specified in subsection (2)(a) of that section, and
(b) the society that is its immediate parent undertaking (within the meaning of section 1162 of the Companies Act 2006) holds the same proportion of the shares in the undertaking as it holds voting rights.
Holdings in subsidiary undertakings
10. (1) The following information must be given with respect to the shares of a subsidiary undertaking held—
(a) by the society, and
(b) by the group,
and the information required under paragraphs (a) and (b) must (if different) be shown separately.
(2) There must be stated–
(a) the identity of each class of shares held, and
(b) the proportion of the nominal value of the shares of that class represented by those shares.
Financial information about subsidiary undertakings not included in the consolidation
11. (1) There must be shown with respect to each subsidiary undertaking not included in the consolidation–
(a) the aggregate amount of its capital and reserves as at the end of its relevant financial year, and
(b) its profit or loss for that year.
(2) The information referred to in sub-paragraph (1) need not be given if the group’s investment in the subsidiary undertaking is included in the accounts by way of the equity method of valuation or if –
(a) the subsidiary undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and
(b) the holding of the group is less than 50 per cent of the nominal value of the shares in the subsidiary undertaking.
(3) Information otherwise required by this paragraph need not be given if it is not material—
(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
(4) For the purposes of this paragraph the “relevant financial year” of a subsidiary undertaking is –
(a) if its financial year ends with that of the society, that year, and
(b) if not, its financial year ending last before the end of the society’s financial year.
Associated undertakings
12. (1) The following information must be given where an undertaking included in the consolidation has an interest in an associated undertaking.
(2) The name of the associated undertaking must be stated.
(3) There must be stated–
(a) if the associated undertaking is incorporated outside the United Kingdom, the country in which it is incorporated, and
(b) if it is unincorporated, the address of its principal place of business.
(4) The following information must be given with respect to the shares of the associated undertaking held–
(a) by the society; and
(b) by the group,
and the information required under paragraphs (a) and (b) must (if different) be given separately.
(5) There must be stated–
(a) the identity of each class of shares in the associated undertaking held; and
(b) the proportion of the nominal value of the shares of that class represented by those shares.
Other significant holdings of society or group
13. (1) The information required by paragraphs 14 and 15 must be given where at the end of the financial year the society has a significant holding in an undertaking which is not one of its subsidiary undertakings and does not fall within paragraph 12 (associated undertakings).
(2) A holding is significant for this purpose if–
(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or
(b) the amount of the holding (as stated or included in the society’s individual accounts) exceeds one-fifth of the amount of the society’s assets (as so stated).
14. (1) The name of the undertaking must be stated.
(2) There must be stated –
(a) if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and
(b) if it is unincorporated, the address of its principal place of business.
(3) There must also be stated–
(a) the identity of each class of shares in the undertaking held by the society; and
(b) the proportion of the nominal value of the shares of that class represented by those shares.
(4) The information otherwise required by this paragraph need not be given if it is not material—
(a) in the case of Building Societies Act accounts, for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
15. (1) There must also be stated–
(a) the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year; and
(b) its profits or loss for that year.
(2) That information need not be given in respect of an undertaking if–
(a) the undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere, and
(b) the society’s holding is less than 50 per cent of the nominal value of the shares in the undertaking.
(3) Information otherwise required by this paragraph need not be given if it is not material—
(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
(4) For the purposes of this paragraph the “relevant financial year” of an undertaking is–
(a) if its financial year ends with that of the society, that year, and
(b) if not, its financial year ending last before the end of the society’s financial year.
16. (1) The information required by paragraphs 17 and 18 must be given where at the end of the financial year the group has a significant holding in an undertaking which is not a subsidiary undertaking of the society and does not fall within paragraph 12 (associated undertakings).
(2) A holding is significant for this purpose if–
(a) it amounts to 20 per cent or more of the nominal value of the shares in the undertaking; or
(b) the amount of the holding (as stated or included in the group accounts) exceeds one-fifth of the amount of the group’s assets (as so stated).
17. (1) The name of the undertaking must be stated.
(2) There must be stated–
(a) if the undertaking is incorporated outside the United Kingdom, the country in which it is incorporated; and
(b) if it is unincorporated, the address of its principal place of business.
(3) There must also be stated–
(a) the identity of each class of shares in the undertaking held by the group; and
(b) the proportion of the nominal value of the shares of that class represented by those shares.
(4) Information otherwise required by this paragraph need not be given if it is not material—
(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
18. (1) There must also be stated–
(a) the aggregate amount of the capital and reserves of the undertaking as at the end of its relevant financial year; and
(b) its profit or loss for that year.
(2) That information need not be given if–
(a) the undertaking is not required by any provision of the Companies Act 2006 to deliver a copy of its balance sheet for its relevant financial year and does not otherwise publish that balance sheet in the United Kingdom or elsewhere; and
(b) the holding of the group is less than 50 per cent of the nominal value of the shares in the undertaking.
(3) Information otherwise required by this paragraph need not be given if it is not material—
(a) for the purpose of giving a true and fair view for the society and its subsidiary undertakings as a whole, of the matters set out in section 72F(2);
(b) in the case of IAS accounts, to the requirement under UK-adopted international accounting standards that such accounts achieve a fair presentation.
(4) For the purposes of this paragraph the “relevant financial year” of an undertaking is–
(a) if its financial year ends with that of the society, that year, and
(b) if not, its financial year ending last before the end of the society’s financial year.
Construction of references to shares held by society or group
19. (1) References in this Part of this Schedule to shares held by the society or the group shall be construed as follows.
(2) For the purposes of paragraphs 10, 12(4) and (5) and 13 to 15–
(a) shares held on behalf of a society by any person are treated as if they were held by the society; but
(b) shares held on behalf of a person other than the society are not treated as if they were held by the society.
(3) References to shares held by the group are to any shares held by or on behalf of the society or any of its subsidiary undertakings; but shares held on behalf of a person other than the society or any of its subsidiary undertakings are not treated as if they were held by the group.
(4) Shares held by way of security are treated as if they were held by the person providing the security in the following cases–
(a) where apart from the right to exercise them for the purpose of preserving the value of the security, or of realising it, the rights attached to the shares are exercisable only in accordance with his instructions;
(b) where the shares are held in connection with the granting of loans as part of normal business activities and apart from the right to exercise them for the purpose of preserving the value of security, or of realising it, the rights attached to the shares are exercisable only in his interests.
Interpretation: general
20. In this Schedule, “group” means a building society and its subsidiary undertakings.
SCHEDULE10C Disclosure of auditor remuneration etc required in notes to accounts
Section 72M
Disclosure required
1. (1) The following must be shown—
(a) the amount of any remuneration receivable by the society’s auditor , or an associate of the society’s auditor, for the auditing of the annual accounts, and
(b) the amount of any remuneration receivable in respect of the financial year by—
(i) the society’s auditor, or
(ii) any person who was, at any time during that financial year, an associate of the society’s auditor,
for the supply of other services to the society or any associate of the society.
(2) Where the remuneration includes benefits in kind, the nature and estimated money-value of those benefits must also be shown.
(3) Separate disclosure is required in respect of the auditing of the accounts in question and of each type of service specified in paragraph 2, but not in respect of each service falling within a type of service.
(4) Separate disclosure is required in respect of services supplied to the society and its subsidiaries on the one hand and to associated pension schemes on the other.
(5) Where more than one person has been appointed as a society’s auditor in respect of the financial year, separate disclosure is required in respect of the remuneration of each such person and his associates.
(6) Where a building society is required to prepare consolidated group accounts—
(a) those accounts must comply with sub-paragraph (1)(b) as if the undertakings included in the consolidation were a single building society, and
(b) the notes to the individual accounts of—
(i) the society, and
(ii) a subsidiary of the society, where the subsidiary is included in the group accounts and the statutory auditor is the same for both the society and the subsidiary,
do not have to disclose the information required by that provision if the notes state that the group accounts are so required.
Types of service
2. The types of service in respect of which disclosure is required are—
(a) the auditing of accounts of any associate of the society;
(b) audit-related assurance services;
(c) taxation compliance services;
(d) any taxation advisory services not falling within paragraph (c);
(e) internal audit services;
(f) any assurance services not falling within paragraphs (a) to (e);
(g) any services relating to corporate finance transactions entered into, or proposed to be entered into, by or on behalf of the society or any of its associates not falling within paragraphs (a) to (f);
(h) any other non-audit services.
Disclosure not required of remuneration for certain services provided by distant associate
3. (1) Disclosure is not required of remuneration receivable for the supply of services falling within paragraph 2(h) supplied by a distant associate of the society’s auditor where the total remuneration receivable for all of those services supplied by that associate does not exceed—
(a) £10,000, or
(b) 1% of the total audit remuneration received by the society’s auditor in the most recent financial year of the auditor which ended no later than the end of the financial year of the society to which the accounts relate.
(2) In sub-paragraph (1)(b)—
(a) “financial year of the auditor” means—
(i) the period of not more than 18 months in respect of which the auditor’s profit and loss account is required to be made up (whether by law or by or in accordance with the auditor’s constitution (if any)), or
(ii) failing any such requirement, the period of 12 months beginning with 1st April;
(b) “total audit remuneration received” means the total remuneration received for the auditing pursuant to legislation (including that of countries and territories outside the United Kingdom) of any accounts of any person.
Duty of auditor to supply information
4. The auditor of a building society must supply the directors of the society with such information as is necessary to enable the disclosure required by paragraph 1 to be made.
Meaning of “associate” and “distant associate” of auditor
5. (1) This paragraph defines what is meant in this Schedule by an “associate” or a “distant associate” of a building society’s auditor.
(2) The following are associates of a society’s auditor—
(a) any person controlled by the society’s auditor or by any associate of the society’s auditor (whether alone or through two or more persons acting together to secure or exercise control), but only if that control does not arise solely by virtue of the society’s auditor or any associate of the society’s auditor acting—
(i) as an insolvency practitioner in relation to any person,
(ii) in the capacity of a receiver, or a receiver or manager, of the property of a society or other body corporate, or
(iii) as a judicial factor on the estate of any person;
(b) any person who, or group of persons acting together which, has control of the society’s auditor;
(c) any person using a trading name which is the same as or similar to a trading name used by the society’s auditor, but only if the society’s auditor uses that trading name with the intention of creating the impression of a connection between the auditor and that other person;
(d) any person who is party to an arrangement with the society’s auditor, with or without any other person, under which costs, profits, quality control, business strategy or significant professional resources are shared.
(3) Where the society’s auditor is a partnership, the following are also associates of the auditor—
(a) any partner in the society’s auditor;
(b) any body corporate which is in the same group as a body corporate which is a partner in the society’s auditor;
(c) any body corporate of which a partner in the society’s auditor is a director;
(d) any partnership which has a partner in common with the society’s auditor;
(e) any body corporate which is in the same group as a body corporate which is a partner in a partnership which has a partner in common with the society’s auditor.
(4) Where a society’s auditor is a body corporate (other than one which is also a partnership as defined in sub-paragraph (6)(d)), the following are also associates of the auditor—
(a) any director of the society’s auditor;
(b) any body corporate which is in the same group as a body corporate which is a director of the society’s auditor;
(c) any body corporate which is in the same group as the society’s auditor;
(d) any partnership in which any such body corporate which is in the same group as the society’s auditor is a partner;
(e) any partnership in which a director of the society’s auditor is a partner;
(f) any body corporate which has a director in common with the society’s auditor;
(g) any body corporate which is in the same group as a body corporate which has a director in common with the society’s auditor.
(5) A distant associate of a society’s auditor is a person who is an associate of that auditor by reason only that that person is an associate within one or more of—
(a) sub-paragraph (2)(a) where the person in question is controlled by a distant associate of the society’s auditor and not by the auditor or by an associate who is not a distant associate;
(b) sub-paragraph (3)(c), (d) or (e);
(c) sub-paragraph (4)(e), (f) or (g).
(6) For the purposes of this paragraph—
(a) “acting as an insolvency practitioner” shall be construed in accordance with section 388 of the Insolvency Act 1986 or Article 3 of the Insolvency (Northern Ireland) Order 1989;
(b) “director” includes any person occupying the position of director, by whatever name called;
(c) “partner” includes a member of a limited liability partnership;
(d) “partnership” includes a limited liability partnership and a partnership constituted under the law of a country or a territory outside the United Kingdom;
(e) a reference to “a receiver, or a receiver or manager, of the property of a society or other body corporate” includes a receiver, or (as the case may be) a receiver or manager, of part only of that property;
(f) a person able, directly or indirectly to control or materially to influence the operating and financial policy of another person shall be treated as having control of that other person; and
(g) a body corporate is in the same group as another body corporate if one is a subsidiary of the other.
Interpretation
6. In this Schedule—
“associate of the society” means—
any subsidiary of the society, other than a subsidiary in respect of which severe long-term restrictions substantially hinder the exercise of rights of the society over the assets or management of that subsidiary, or
any associated pension scheme;
“associated pension scheme”, in relation to a building society, means a scheme for the provision of benefits for or in respect of directors or employees (or former directors or employees) of the society or any subsidiary of the society where—
the benefits consist of or include any pension, lump sum, gratuity or other like benefit given or to be given on retirement or on death or in anticipation of retirement or, in connection with past service, after retirement or death, and
either—
a majority of the trustees are appointed by, or by a person acting on behalf of the society or a subsidiary of the society, or
the society, or a subsidiary of the society, exercises a dominant influence over the appointment of the auditor (if any) of the scheme;
“remuneration” includes payments in respect of expenses and benefits in kind;
“subsidiary” means a subsidiary undertaking that is a body corporate.
Section 77.
Appointment
1 (1) The first auditor of a building society may be appointed by the directors at any time before the first general meeting of the building society following the end of the society’s first financial year and an auditor so appointed shall hold office until the conclusion of that meeting.
(2) If the directors fail to exercise their powers under sub-paragraph (1) above those powers may be exercised by the building society in general meeting.
2 The directors, or the building society in general meeting, may fill any casual vacancy in the office of auditor; but while any such vacancy continues, the surviving or continuing auditor or auditors (if any) may act.
3 (1) If at any annual general meeting of a building society no auditor is appointed or re-appointed, the appropriate authority may appoint a person to fill the vacancy; and the society shall, within one week of the power of the appropriate authority becoming exercisable, give notice to the FCA and, if the society is a PRA-authorised person, to the PRA of that fact.
(2) If a building society fails to give the notice required by sub-paragraph (1) above the society shall be liable on summary conviction—
(a) to a fine not exceeding level 3 on the standard scale, and
(b) in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continuesX;
and so shall any officer who is also guilty of the offence.
3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3B (1) This paragraph applies to the appointment of an auditor or auditors under section 77, where the building society has an audit committee.
(2) Before an appointment to which this paragraph applies is made—
(a) the audit committee of the building society must make a recommendation to the directors in connection with the appointment, and
(b) the directors must propose an auditor or auditors for appointment ...
(3) Before the audit committee makes a recommendation or the directors make a proposal under sub-paragraph (2), the committee... must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation.
(4) The audit committee must in its recommendation—
(a) identify its first and second choice candidates for appointment, drawn from those auditors who have participated in a selection procedure under sub-paragraph (3),
(b) give reasons for the choices so identified,
(c) state that—
(i) the recommendation is free from influence by a third party, and
(ii) no contractual term of the kind mentioned in Article 16(6) of the Audit Regulation has been imposed on the building society.
(5) The directors must include in their proposal—
(a) the recommendation made by the audit committee in connection with the appointment, and
(b) if the proposal of the directors departs from the preference of the audit committee—
(i) a recommendation for a candidate or candidates for appointment drawn from those auditors who have participated in a selection procedure under sub-paragraph (3), and
(ii) the reasons for not following the audit committee’s recommendation.
(6) Where the audit committee recommends re-appointment of the society’s existing auditor or auditors, and the directors are in agreement, sub-paragraphs (3) and (4)(a) and (b) do not apply.
3C (1) This paragraph applies to the appointment of an auditor or auditors under section 77, where the building society does not have an audit committee.
(2) Before an appointment to which this paragraph applies is made the directors must propose an auditor or auditors for appointment.
(3) Before the directors make a proposal under sub-paragraph (2), they must carry out a selection procedure in accordance with Article 16(3) of the Audit Regulation , from which their proposed auditor or auditors must be drawn .
(4) Sub-paragraph (3) does not apply in relation to a proposal to re-appoint the society’s existing auditor or auditors.
3D. (1) A person who has been, or will have been, auditor of a building society in respect of every financial year comprised in the maximum engagement period may not be appointed as auditor of the society in respect of any financial year which begins within the period of 4 years beginning with the day after the last day of the last financial year of the maximum engagement period.
(2) A person who is a member of the same network as the auditor mentioned in sub-paragraph (1) may not be appointed as auditor of the society in respect of any financial year which begins within the period of 4 years mentioned in that sub-paragraph.
(3) In this paragraph “network” means an association of persons, other than a firm, co-operating in audit work by way of—
(a) profit-sharing;
(b) cost-sharing;
(c) common ownership, control or management;
(d) common quality control policies and procedures;
(e) common business strategy; or
(f) use of a common name.
3DA. (1) If—
(a) a building society appoints, or purports to appoint, an auditor or auditors, and
(b) the appointment or purported appointment is made in breach of paragraph 3B, 3C or 3D (requirements applying to appointment of auditors),
the appropriate authority may appoint another auditor or auditors in place of the auditor or auditors referred to in paragraph (a).
(2) The breach of paragraph 3B, 3C or 3D does not invalidate any report made under this Part by the auditor or auditors on the building society’s annual reports or accounts before the auditor or auditors are replaced under sub-paragraph (1) of this paragraph.
(3) But where the breach in question is a breach of paragraph 3D, sections 1248 and 1249 of the Companies Act 2006 (Secretary of State’s power to require second audit for companies) apply as if—
(a) the building society were a company;
(b) references to the Secretary of State were to the appropriate audit authority;
(c) references to the registrar of companies were to the FCA and, if the society is a PRA-authorised person, to the PRA;
(d) the auditor was not an appropriate person, or the auditors were not appropriate persons, for the period during which the audit was conducted;
(e) section 1248(9) was omitted.
(4) Within one week of becoming aware of the breach of paragraph 3B, 3C or 3D, the building society must give notice to the appropriate authority that the power under sub-paragraph (1) of this paragraph has become exercisable.
(5) If the building society fails to give the notice required by sub-paragraph (4), the society shall be liable on summary conviction—
(a) to a fine not exceeding level 3 on the standard scale; and
(b) in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues;
and so shall any officer who is also guilty of the offence.
3E. (1) Where a person is auditor of a building society in respect of consecutive financial years, the maximum engagement period of the person as auditor of the society—
(a) begins with the first of those years (see the appropriate entry in the first column of the following Table), and
(b) ends with the financial year specified in the corresponding entry in the second column of the Table:
First financial year of the maximum engagement period | Last financial year of the maximum engagement period
A financial year of the society beginning before 17 June 1994 | The last financial year of the society to begin before 17 June 2020.
A financial year of the society beginning— (a) on or after 17 June 1994, and (b) before 17 June 2003 | The last financial year of the society to begin before 17 June 2023.
A financial year of the society beginning— (a) on or after 17 June 2003, and (b) before 17 June 2016 | No qualifying selection procedure Where neither the first financial year of the maximum engagement period nor any subsequent financial year is one in respect of which the auditor has been appointed following the carrying out of a qualifying selection procedure, the later of- (a) the last financial year of the society to begin before 17 June 2016, and (b) the last financial year of the society to begin within the period of 10 years beginning with the first day of the first financial year of the maximum engagement period. No qualifying selection procedure within 10 years Where the last day of the last financial year of the society to begin within the period of 10 years beginning with the first day of the last financial year of the society in respect of which the auditor was appointed following a qualifying selection procedure is before 17 June 2016— (a) the last financial year of the society to begin before 17 June 2016, unless (b) the auditor is appointed following a qualifying selection procedure for the first financial year of the society to begin on or after 17 June 2016, in which case it is the last financial year of the society to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period. Qualifying selection procedure within 10 years In any other case, the earlier of- (a) the last financial year of the society to begin within the period of 10 years beginning with the first day of the last financial year of the society in respect of which the auditor was appointed following a qualifying selection procedure, and (b) the last financial year of the society to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.
A financial year of the society beginning on or after 17 June 2016 | The earlier of— (a) the last financial year of the society to begin within the period of 10 years beginning with the first day of the last financial year of the society in respect of which the auditor was appointed following a qualifying selection procedure, and (b) the last financial year of the society to begin within the period of 20 years beginning with the first day of the first financial year of the maximum engagement period.
(2) Where the first financial year of the maximum engagement period begins on or after 17 June 2003, the maximum engagement period may be extended by a period of no more than 2 years with the approval of the competent authority.
(3) Such approval may be given by the competent authority only if it is satisfied that exceptional circumstances exist.
(4) Where the competent authority gives its approval as mentioned in sub-paragraph (2)—
(a) the second column of the Table in sub-paragraph (1) has effect with the necessary modifications, and
(b) the first appointment to be made after the end of the period as so extended must be made following a qualifying selection procedure.
(5) In this paragraph “qualifying selection procedure” means—
(a) in the case of an appointment in respect of a financial year beginning on or after 17 June 2016 made after the Statutory Auditors and Third Country Auditors Regulations 2017 come into force—
(i) if the society has an audit committee, a selection procedure that complies with the requirements of paragraph 3B(3) and (4)(a) and (b), and
(ii) if the society does not have an audit committee, a selection procedure that complies with the requirements of Article 16(3) of the Audit Regulation;
(b) in any other case, a selection procedure that substantially meets the requirements of Article 16(2) to (5) of the Audit Regulation as it had effect immediately before IP completion day, having regard to the circumstances at the time (including whether the society had an audit committee).
4 (1) A resolution at a general meeting of a building society—
(a) appointing as auditor a person other than a retiring auditor; or
(b) filling a casual vacancy in the office of auditor; or
(c) reappointing as auditor a retiring auditor who was appointed by the directors to fill a casual vacancy; or
(d) removing an auditor before the expiration of his term of office,
shall not be effective unless notice of the intention to move it has been given to the society not less than twenty-eight days before the meeting at which it is moved.
(2) A building society shall give to its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting, or, if that is not practicable, shall give them notice of the resolution, not less than twenty-one days before the meeting, either by advertisement in a newspaper having an appropriate circulation or in any other way allowed by the rules of the society.
(3) On receipt of notice of such an intended resolution as is mentioned above the society shall forthwith send a copy of it—
(a) to the person proposed to be appointed or removed, as the cae may be;
(b) in a case within sub-paragraph (1)(a), to the retiring auditor; and
(c) where, in a case within sub-paragraph (1)(b) or (c), the casual vacancy was caused by the resignation of an auditor, to the auditor who resigned.
(4) Where notice is given of such a resolution as is mentioned in sub-paragraphs (1)(a) or (d) and the retiring auditor, or (as the case may be) the auditor proposed to be removed, makes with respect to the intended resolution representations, in writing to the society (not exceeding a reasonable length) and requests their notification to the members, the society shall (unless the representations are received by it too late to do so)—
(a) in any notice of the resolution given to members, state the fact of the representations having been made, and
(b) send a copy of the representations to every member to whom notice of the meeting is or has been sent.
(5) if a copy of such representations is not sent out as required by sub-paragraph (4) above because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.
(6) The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of any representations made to it under sub-paragraph (4) above, apply in accordance with sub-paragraph (7) or (8) below to—
(a) the High Court, or
(b) the appropriate authority ,
for an order that copies of the representations need not or, as the case may be, shall not be sent out nor the representations read out at the meeting.
(7) An application under this sub-paragraph is an application to the High Court on the ground that the auditor is abusing the rights conferred by sub-paragraph (4) above to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is so abusing those rights it may by order direct that copies of the representations need not be sent out nor the representations read out at the meeting; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor notwithstanding that he is not a party to the application.
(8) An application under this sub-paragraph is an application to the appropriate authority on the ground that the sending out of copies of or the reading out at the meeting of the representations would be likely to diminish substantially the confidence in the society of investing members of the public and if the appropriate authority is satisfied that the sending out of copies of the representations or the reading of them would have that effect it shall by order direct that copies of the representations shall not be sent out nor the representations read at the meeting.
(9) The building society shall—
(a) if the High Court makes an order under sub-paragraph (7) above or the appropriate authority makes an order under sub-paragraph (8) above, send within fourteen days of the decision a statement setting out the effect of the order to the persons mentioned in sub-paragraph (4)(b) above; and
(b) if not, either send a copy of the written representations made under sub-paragraph (4) above to those persons or cause the representations to be read out at the meeting.
(9A) Sub-paragraphs (9B) and (9C) apply where—
(a) a copy of representations is required to be sent under sub-paragraph (4)(b) or (9)(b); or
(b) a statement is required to be sent under sub-paragraph (9)(a).
(9B) Where a copy of representations or a statement is required to be sent to a member—
(a) it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but
(b) the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (9C) are satisfied.
(9C) The conditions of this sub-paragraph are satisfied in the case of a copy of representations or a statement if—
(a) the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the representations or statement in question;
(c) the member is notified... of—
(i) the publication of the copy of the representations or the statement on a web site,
(ii) the address of that web site,
(iii) the place on that web site where the representations or statement may be accessed, and how it may be accessed,
and where the notification concerns the publication of a statement required to be sent by sub-paragraph (9)(a), the member is notified within the period specified in that paragraph; and
(d) the copy of the representations or the statement is published continuously on that web site throughout the period beginning with the date on which notification is given in accordance with paragraph (c) and ending with the conclusion of the meeting.
(10) If default is made in complying with sub-paragraph (4) or (9) above the building society shall be liable—
(a) on conviction on indictment to a fine; or
(b) on summary confiction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding one tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues;
and so shall any officer who is also guilty of the offence.
(10A) Where, in a case in which sub-paragraph (9A)(b) is relied on for compliance with a requirement of sub-paragraph (4) or (9)—
(a) a copy of representations or a statement is published on a web site for a part, but not all, of the period mentioned in sub-paragraph (9C)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
no offence is committed under sub-paragraph (10) by reason of that failure.
Qualification and disqualification of auditors
5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Tenure
5A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Maximum engagement period: transitional arrangements
5B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Removal of auditors
6 (1) A building society may by resolution in general meeting remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him.
(2) Where a resolution removing an auditor is passed at a general meeting of a building society, the society shall within 14 days give notice of that fact to the FCA and, if the society is a PRA-authorised person, the PRA .
(3) If a building society fails to give the notice required by s ub-paragraph (2) above the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and, in the case of a continuing offence, to an additional fine not exceeding £40 for every day during which the offence continues and so shall every officer who is also guilty of the offence.
(4) Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages that may be payable to him in respect of the termination of his appointment as auditor.
(5) An auditor may not be removed from office before the expiration of that auditor's term of office except—
(a) by resolution under this paragraph, or
(b) in accordance with paragraph 6ZA.
Application to court to remove auditor from office
6ZA (1) The competent authority may apply to the High Court for an order removing an auditor of a building society from office if the authority considers that there are proper grounds for removing the auditor from office.
(2) The members of a building society may apply to the High Court for an order removing an auditor of the building society from office if the applicant or applicants consider that there are proper grounds for removing the auditor from office.
(3) If the court is satisfied, on hearing an application under sub-paragraph (1), that there are proper grounds for removing the auditor from office, it may make an order removing the auditor from office.
(4) If the court is satisfied, on hearing an application under sub-paragraph (2), that—
(a) the applicants represent in total—
(i) not less than 5% of the voting rights of all the members having a right to vote at a general meeting of the building society, or
(ii) not less than 5% in nominal value of the amount standing to the credit of shares in a building society as shown by the latest balance sheet, and
(b) there are proper grounds for removing the auditor from office,
the court may make an order removing the auditor from office.
(5) For the purposes of this paragraph, divergence of opinions on accounting treatments or audit procedures are not to be taken to be proper grounds for removing an auditor from office.
Removal of auditor on improper grounds
6A. (1) Where an auditor of a building society is removed from office , other than by order of the High Court made under paragraph 6ZA, an application may be made to the High Court under this paragraph.
(2) The persons who may make such an application are—
(a) any member of the society who was also a member at the time of the removal;
(b) the FCA; and
(c) if the society is a PRA-authorised person, the PRA.
(3) If the court is satisfied that the removal was—
(a) on grounds of divergence of opinion on accounting treatments or audit procedures, or
(b) on any other improper grounds,
it may make such order as it thinks fit for giving relief in respect of the removal.
(4) The court may, in particular—
(a) declare that any resolution of the society removing an auditor, or appointing a new auditor in his place, is void;
(b) require the directors of the society to re-appoint the auditor until the next general meeting of the society;
(c) give directions as to the conduct of the society’s affairs in the future.
Resignation of auditors
7 (1) An auditor of a building society may resign his office by depositing a notice to that effect at the principal office of the society; and any such notice operates to bring his term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.
(2) An auditor’s notice of resignation shall not be effective unless it contains either—
(a) a statement to the effect that there are no circumstances connected with his resignation which he considers should be brought to the notice of the members of, or depositors with, the society, or
(b) a statement of any such circumstances as are mentioned above.
(3) Where a notice under this paragraph is deposited at the principal office of a building society it shall within fourteen days send a copy of that notice—
(a) to the FCA and, if the society is a PRA-authorised person, the PRA , and
(b) if the notice contains a statement under sub-paragraph (2)(b) above, to every person who under section 76(8) is entitled to receive a copy of the summary financial statement.
(4) The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of a notice containing a statement under sub-paragraph (2)(b), apply in accordance with sub-paragraph (5) or (6) below to—
(a) the High Court; or
(b) the appropriate authority ,
for an order that copies of the notice need not or, as the case may be, shall not be sent out.
(5) An application under this sub-paragraph is an application to the High Court on the ground that the auditor is using the notice to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is using the notice for that purpose it may by order direct that copies of it need not be sent out; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.
(6) An application under this sub-paragraph is an application to the appropriate authority on the ground that the sending out of the notice would be likely to diminish substantially the confidence in the society of investing members of the public; and if the appropriate authority is satisfied that the sending out of the notice would be likely to have that effect it shall by order direct that copies of it shall not be sent out.
(7) The building society shall, within fourteen days of the decision of the High Court or of the appropriate authority , send to the persons mentioned in sub-paragraph (3)—
(a) if the court makes an order under sub-paragraph (5) above or the appropriate authority makes an order under sub-paragraph (6), a statement setting out the effect of the order; and
(b) if not, a copy of the notice containing the statement under sub-paragraph (2)(b).
(7A) Sub-paragraphs (7B) and (7C) apply where—
(a) the reference to a notice containing a statement under sub-paragraph (2)(b) is required to be sent to a person under sub-paragraph (3)(b) or sub-paragraph (7)(b); or
(b) a statement is required to be sent under sub-paragraph (7)(a).
(7B) Where a notice or a statement is required to be sent to a person, the notice or statement may be sent to him electronically only if—
(a) in a case where a person mentioned in sub-paragraph (3)(b) has notified the society of an electronic address for the purpose of this paragraph, it is sent to that address; or
(b) in a case where no electronic address has been notified for the purpose of this paragraph, it is sent to an electronic address notified by him for the purpose of subsection (8B) of section 76 (electronic address for the reception of summary financial statement for members and depositors).
(7C) The requirement to send a notice or a statement shall also be treated as satisfied if—
(a) the society and a person mentioned in sub-paragraph (3)(b) have agreed that information that is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the notice or statement in question;
(c) the person is notified of—
(i) the publication of the notice or statement on a web site,
(ii) the address of that web site, and
(iii) the place on that web site where the notice or statement may be accessed, and how it may be accessed; and
(d) the notice or statement is published on the web site throughout a period of at least 14 days, beginning with the day on which the person is notified in accordance with paragraph (c).
(8) If default is made in complying with sub-paragraph (3) or sub-paragraph (7) the building society shall be liable—
(a) on conviction on indictment to a fine; or
(b) on summary conviction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding one tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues;
and so shall any officer who is also guilty of the offence.
(8A) Where, in a case in which sub-paragraph (7C) is relied on for compliance with a requirement under sub-paragraph (3) or (7)—
(a) a notice or a statement is published for a part, but not all, of the period mentioned in sub-paragraph (7C)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
no offence is committed under sub-paragraph (8) by reason of that failure.
8 (1) Where an auditor’s notice of resignation contains a statement under paragraph 7(2)(b) above he may also deposit at the principal office of the society a requisition signed by him calling on the directors of the society forthwith duly to convene a special general meeting of the society for the purpose of receiving and considering such explanation of the circumstances connected with this resignation as he may wish to place before the meeting.
(2) Where an auditor’s notice of resignation contains such a statement the auditor may request the society to send to its members—
(a) before the general meeting at which his term of office would otherwise expire or expires, as the case may be; or
(b) before any general meeting at which it is proposed to fill the vacancy caused by his resignation,
a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.
(3) The society shall in that case (unless the statement is received by it too late for it to comply)—
(a) in any notice of the meeting given to members state the fact of the statement having been made, and
(b) send a copy of the statement to every member to whom notice of the meeting is or has been sent.
(3A) Where a copy of a statement is required to be sent to a member under sub-paragraph (3)(b)—
(a) it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but
(b) the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (3B) are satisfied.
(3B) The conditions of this sub-paragraph are satisfied in the case of a copy of a statement if—
(a) the society and the member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the statement in question;
(c) that member is notified ... of—
(i) the publication of the statement on a web site,
(ii) the address of that web site, and
(iii) the place on that web site where the notice may be accessed, and how it may be accessed; and
(d) the statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the conclusion of the meeting.
(3C) Where, in a case in which sub-paragraph (3A)(b) is relied on for compliance with a requirement under sub-paragraph (3)(b)—
(a) a statement is published for a part, but not all, of the period mentioned in subparagraph (3B)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
that failure shall not invalidate the proceedings of the meeting.
(4) If the directors of the society do not within 21 days from the date of the deposit of a requisition under this paragraph proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every director who failed to take all reasonable steps to secure that a meeting was so convened shall be liable—
(a) on conviction on indictment to a fine; or
(b) on summary conviction to a fine not exceeding the statutory maximum.
(5) If a copy of the statement mentioned in sub-paragraph (2) is not sent out as required by sub-paragraph (3) because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting.
(6) Copies of a statement need not be sent out and the statement need not be read out at the meeting if—
(a) on an application made to the High Court by the society or a person aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; or
(b) on an application to the PRA by the society or a person aggrieved, the PRA is satisfied that the circulating or reading out of the statement would be likely to diminish substantially the confidence in the society of investing members of the public.
(7) If the High Court makes an order under sub-paragraph (6)(a) above it may also order the society’s costs of the application to be paid by the auditor notwithstanding that he is not a party to the application.
(8) An auditor who has resigned his office is entitled to attend any such meeting as is mentioned in sub-paragraph (2)(a) or (b) and to receive all notices of, and other communications relating to, any such meeting which any member of the society is entitled to receive, and to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as former auditor of the society.
Duty of auditor to notify appropriate audit authority
8A. (1) Where an auditor of a building society ceases for any reason to hold office, he must notify the appropriate audit authority.
(2) The notice must—
(a) inform the appropriate audit authority that he has ceased to hold office, and
(b) if the auditor resigns, be accompanied by a copy of the auditor’s notice of resignation.
(3) The notice required by this paragraph must also be accompanied by a statement of the reasons for his ceasing to hold office unless—
(a) the auditor resigns, and
(b) the notice of resignation contains a statement under paragraph 7(2)(b).
(4) The auditor must comply with this paragraph—
(a) if the auditor resigns, at the same time as he deposits his notice of resignation at the principal office of the building society;
(b) in any other case, not later than the end of the period of fourteen days beginning with the date on which he ceases to hold office.
(5) A person ceasing to hold office as auditor who fails to comply with this paragraph commits an offence.
(6) If that person is a firm an offence is committed by—
(a) the firm, and
(b) every officer of the firm who is in default.
(7) A person guilty of an offence under this paragraph is liable—
(a) on conviction on indictment, to a fine;
(b) on summary conviction, to a fine not exceeding the statutory maximum.
Duty of building society to notify appropriate audit authority
8B. (1) Where an auditor ceases to hold office before the end of his term of office, the building society must notify the appropriate audit authority.
(2) The notice must—
(a) inform the appropriate audit authority that the auditor has ceased to hold office, and
(b) be accompanied by—
(i) a statement by the society of the reasons for his ceasing to hold office, or
(ii) if the auditor resigns, and his notice of resignation contains a statement under paragraph 7(2)(b), a copy of that statement.
(3) The society must give notice under this paragraph—
(a) if the auditor resigns, not later than the end of the period of fourteen days beginning with the date on which the auditor’s notice of resignation is deposited at the society’s principal office;
(b) in any other case, not later than the end of the period of fourteen days beginning with the date on which the auditor ceases to hold office.
(4) If a building society fails to comply with this paragraph, an offence is committed by—
(a) the society, and
(b) every officer of the society who is in default.
(5) A person guilty of an offence under this paragraph is liable—
(a) on conviction on indictment, to a fine, and
(b) on summary conviction, to a fine not exceeding the statutory maximum.
Interpretation
8C. (1) In this Schedule—
“appropriate audit authority” means—
the Secretary of State, or
if the Secretary of State has delegated functions under section 1252 of the Companies Act 2006 to a body whose functions include receiving the equivalent notice under section 522 or 523 of that Act, that body;
“audit committee” means a body which performs—
the functions referred to in—
rule 7.1.3 of the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority under the Financial Services and Markets Act 2000; or
rule 2.4 of the Audit Committee Part of the Rulebook made by the Prudential Regulation Authority under that Act; or
equivalent functions;
“Audit Regulation” means Regulation 537/2014 of the European Parliament and of the Council on specific requirements regarding statutory audit of public interest entities and repealing Commission Decision 2005/989/EC; and
“competent authority” means the Financial Reporting Council Limited .
(1A) For the purposes of the definition of “audit committee”, references to rules made by the Prudential Regulation Authority or the Financial Conduct Authority are to those rules as they have effect on IP completion day.
(2) For the purposes of this Schedule, a person is auditor of a building society in respect of a financial year if the auditor is required to report on the accounts of the society for that financial year.
9 In the application of this Schedule to Scotland, references to the High Court shall be read as references to the Court of Session.
Part I Matters to be Provided for in Schemes
The matters for which provision is, subject to Part III of this Schedule, to be made are the following:
Administration
1 The establishment and functioning of an independent body (whether corporate or unincorporate) which is to administer the scheme.
2 The identity of the members.
3 The manner in which the expenses of the scheme are to be met by the members.
The adjudicator
4 The appointment of an independent adjudicator to conduct investigations under the scheme and his tenure of office and remuneration.
Scope of scheme
5 The matters action in relation to which is to be subject to investigation under the scheme and the grounds for making it subject to investigation.
Functions of adjudicator
6 The duty of the adjudicator to investigate, and make determinations on, actions duly referred for investigation.
7 The powers of, and procedure to be followed in the conduct of investigations by, the adjudicator.
8 The powers of the adjudicator on the making of determinations.
Determinations and their effects
9 The extent to which determinations are binding.
10 The manner in which determinations are to be communicated and published.
Reports by investigators to administering body
11 The making to the body administering the scheme of regular reports by the adjudicator as to the discharge of his functions, and their publication.
Amendment or revocation of scheme
12 The manner of amending or revoking the scheme.
Accession to membership
13 Accession to membership of other societies.
Withdrawal from membership
14 Withdrawal from membership.
Part II Requirements for Recognised Schemes:Matters of Complaint
Share accounts
1 The operation or termination of a share account and the grant or refusal to grant a shareholder other facilities normally available to shareholders of his description.
Note: The operation or termination of a share account includes any aspect of the relationship or termination of the relationship between the society and a shareholder as such and in particular the operation or termination of any services incidental to such accounts.
Note: The grant of facilities includes the terms on which they are granted.
Deposit accounts
2 The operation or termination of a deposit account and the grant or refusal to grant a depositor other facilities normally available to depositors of his description.
Note: The operation or termination of a deposit account includes any aspect of the relationship or the termination of the relationship between the society and a depositor as such, including in particular the operation or termination of any services incidental to such accounts.
Note: The grant of facilities includes the terms on which they are granted.
Borrowing members: class 1 or class 2 advances
3 The operation or termination of the account of a member borrowing on a class 1 or class 2 advance and the grant or refusal to grant a borrowing member of that description other or further class 1, or as the case may be, class 2 advances secured on the same or different land or other facilities normally available to borrowing members of his description.
Note: The operation or termination of the account of a borrowing member includes any aspect of the relationship or the termination of the relationship between the society and a borrowing member as such, including in particular the exercise of the right of foreclosure or any other power over the land by virtue of the mortgage.
Note: The grant of advances includes the terms on which they are granted.
Borrowers: mobile home loans
4 The operation or termination of the account of a borrower under section 15 and the grant or refusal to grant a borrower under that section other facilities normally available to borrowers of his description.
Note: The operation or termination of the account of a borrower under section 15 includes any aspect of the relationship or the termination of the relationship between the lender and such a borrower, including in particular the exercise of any power over the security.
Note: The grant of facilities includes the terms on which they are granted.
Borrowers: other loans
5 The operation or termination of the account of a borrower under section 16 and the grant or refusal to grant a borrower under that section other facilities normally available to borrowers of his description.
Note: The operation or termination of the account of a borrower under section 16 includes any aspect of the relationship or the termination of the relationship between the lender and such a borrower including in particular, in the case of a secured loan, the exercise of any power over the security.
Note: The grant of facilities includes the terms on which they are granted.
Money transmission services
6 The terms on which are provided, the operation of, or the withdrawal of money transmission services.
Note: “Money transmission services” means the services of that description provided in accordance with Schedule 8 to this Act.
Foreign exchange facilities
7 The terms on which are provided, the operation of, or the withdrawal of foreign exchange services.
Note: “Foreign exchange services” means services of that description provided in accordance with Schedule 8 to this Act.
Agency payments and receipts
8 The terms on which payments are made or received as agents or the operation or withdrawal of the service.
Note: The payments made or received as agents are those made or received in accordance with Schedule 8 to this Act.
Provision of credit
9 The operation or termination of the account of a borrower with the person providing the credit.
Note: The credit provided is credit provided under arrangements for the provision of credit in accordance with Schedule 8 to this Act.
Part III Minimum Requirements for Recognised Schemes: Other Provisions
Grounds of complaint
1 (1) The grounds for making action by a building society or connected undertaking subject to investigation under the scheme must be that the action constitutes—
(a) in the case of a building society, a breach of the society’s obligations under this Act, its rules or any contract, or
(b) in the case of a connected undertaking, a breach of the undertaking’s obligations under its rules (if any) or any contract, or
(c) unfair treatment, or
(d) maladministration, or
(e) a decision to which sub-paragraph (2) below applies, or action consequential on such a decision,
in relation to the complainant and has caused him pecuniary loss or expense or inconvenience.
(2) This sub-paragraph applies to any decision in connection with the provision of a relevant service which is made otherwise than in the legitimate exercise of commercial judgment.
Permissible exclusions from investigation
2 A scheme must not exclude action from investigation on any other than the following grounds, that is to say—
(a) that the complaint is frivolous or vexatious;
(b) that the action is the subject of proceedings in a court of law or was the subject of such proceedings in which a judgment on the merits was given;
(bb) that the action is the subject of an investigation by another adjudicator (by whatever name called) operating under a comparable scheme (whether or not a recognised scheme), or was the subject of such an investigation in which a decision on the merits was made;
(c) that, where the society or connected undertaking has a procedure for the resolution of complaints by it (an “internal procedure"), the procedure has not been invoked or has not been exhausted;
(d) that there has been undue delay in having the matter investigated under the scheme , or in furnishing evidence in support of the complaint; or
(e) that the action in question occurred outside the United Kingdom.
Note: An international procedure for resolution of complaints is not to be treated as having been invoked unless the complainant has made his complaint to the principal office of the society or, as the case may be, of the connected undertaking and is not to be treated as having been exhausted unless more than three months has elapsed since the complainant invoked it without any decision on his complaint having been communicated to him.
Note: Delay in having a matter investigated under the scheme is not “undue delay" unless at least six months (disregarding the period for exhausting the society’s or connected undertaking’s internal procedure) has expired since the matter came to the knowledge of the complainant; and a person is not, for this purpose, to be presumed to have knowledge of the contents of a document which contains or relates to the terms or proposed terms of any transaction between him and the society.
Note: Delay in furnishing evidence in support of the complaint is not “undue delay" unless at least six months have elapsed since the adjudicator acknowledged receipt of the complaint.
Functions of adjudicator
3 A scheme must, as regards the duties and powers attached to the investigation of complaints under the scheme—
(a) impose on the adjudicator a duty, subject to the provision made in pursuance of sub-paragraph (c) below, to investigate and determine any complaint duly made;
(b) impose on the adjudicator a duty to afford the complainant and the society or connected undertaking an opportunity to make representations (whether orally or in writing) in relation to the action complained of;
(c) confer power on the adjudicator to advise, mediate or act as conciliator before proceeding further with an investigation;
(d) confer power on the adjudicator to extend the scope of his investigation to other matters related to the action complained of; and
(e) confer on an adjudicator such powers to require information and documents relevant to the matter to be furnished to him as are necessary for the purposes of the investigation.
4 (1) Subject to any provision made in pursuance of sub-paragraph (3) below, a scheme must authorise the adjudicator, in reaching his decision, to have regard to, but not to be bound by, any matter (whether or not of obligation) relevant to the action complained of and to question any decision.
(2) A scheme must impose on the adjudicator a duty, in reaching his decision, to have regard to—
(a) the rules (if any) of the society or connected undertaking;
(b) the provisions of any deed or contract binding the society and the complainant or, as the case may be, the connected undertaking and the complainant;
(c) the provisions of any code of conduct applicable to the conduct by the society or connected undertaking of its affairs or business;
(d) any advertisement issued by the society or connected undertaking in connection with any aspect of its activities and any communication with the complainant.
(3) Subject to sub-paragraph (4) below, a scheme may preclude the adjudicator, in his determination, from questioning the merits of any decision taken by the society or connected undertaking with reference to—
(a) the taking or conduct of legal proceedings to enforce any right of the society or connected undertaking; or
(b) the creditworthiness, for the purposes of any advance or other service or facility, of the complainant;
but not otherwise.
(4) Where investigation of a complaint on the ground of maladministration involves consideration by the adjudicator of any decision taken with reference to the creditworthiness of the complainant the scheme must confer power on the adjudicator to direct the society or associated body to take its decision again and reach it by proper procedures.
5 (1) Subject to sub-paragraph (2) below, a scheme must confer power on the adjudicator, by his determination, to do either or both of the following, that is to say—
(a) direct the society or connected undertaking whose action is complained of to take or desist from taking such steps as are specified in the determination;
(b) order the society or connected undertaking whose action is complained of to pay the complainant a sum by way of compensation for the loss, expense or inconvenience caused by the action.
(2) A scheme may impose a limit on the amount of compensation that a society or connected undertaking may be ordered to pay a complainant, but the limit must not be less than £100,000.
Effect of determinations and their communication
6 (1) Subject to any provision made in pursuance of sub-paragraph (2) or (3) below, a scheme must provide that, if the complainant, by notice to the adjudicator within the period specified in the scheme, accepts his determination the society or connected undertaking is under an obligation to take the steps it is directed to take or pay the compensation awarded or both.
(2) A scheme may relieve a society of the obligation imposed by a determination if, but only if, the society undertakes an obligation to give notice to its members of the reasons for its non-fulfilment of the obligations imposed by the determination in the next directors’ report under section 75 and to give notice of those reasons to the public in such manner as the adjudicator requires.
(3) A scheme may relieve a connected undertaking of the obligations imposed by a determination if, but only if, each of the building societies of which it is a connected undertaking undertakes an obligation to give notice to its members of the reasons for the non-fulfilment of the obligations imposed by the determination in the next directors’ report under section 75 and to give notice of those reasons to the public in such manner as the adjudicator requires.
7 A scheme must impose on the adjudicator an obligation not to disclose, whether in his determination or otherwise, any information or opinion furnished in confidence to the society or, as the case may be, to the connected undertaking for the purpose of any action on its part.
Reports by adjudicator to administering body
8 A scheme must require reports by the adjudicator as to the discharge of his functions to be made to the body administering the scheme not less frequently than once in every year.
Publication
9 (1) A scheme must permit the body administering the scheme to publish the whole or any parts of the reports made to them by the adjudicator.
(2) A scheme, if it makes the provision authorised by paragraph 6(2) or (3) above, must require the body administering the scheme to send to the Commission, not less frequently than once in every year, particulars of the cases in which building societies have undertaken the alternative obligation authorised by either or both of those sub-paragraphs.
Preliminary
1 For the purposes of this Schedule, a scheme—
“qualifies for recognition” if it makes provision for the matters specified in Part I of Schedule 12 and the services action in relation to which is subject to investigation under the scheme consist of or include one or more relevant services; and
“conforms to the relevant requirements” if, in relation to a relevant service, it makes action in relation to that service subject to investigation in accordance with Part III of that Schedule;
and any reference to a scheme qualifying for recognition, or being recognised, to any “extent" indicates recognition of it for the purpose of investigations of action in relation to one or more relevant services.
2 (1) The function of the Commission of granting recognition of schemes is exercisable, in accordance with paragraph 4 or 5 below, on the Commission’s own motion or on a submission for its approval made by or on behalf of any building societies.
(2) In this Schedule, in relation to a scheme recognised by the Commission to any extent, a “direction for its recognition” means a direction that the scheme is, to the extent specified in the direction, a scheme recognised by the Commission.
The register of recognised schemes
3 (1) The central office shall maintain a register of recognised schemes for the investigation of complaints (“the register"), and the register shall—
(a) contain a copy of every scheme and the direction for its recognition a copy of which is directed to be kept in it by any provision of this Part of this Schedule; and
(b) be available for inspection on reasonable notice by members of the public on payment of the prescribed fee.
(2) Any member of the public shall be entitled, on payment of the prescribed fee, to be furnished with a copy of any scheme and the direction for its recognition kept in the register.
Procedure for recognition: Commission’s initiative
4 (1) If it appears to the Commission, from its own enquiries or from information made available to it, that a scheme has been made or is in operation which qualifies for recognition the Commission shall consider the scheme and the extent to which it qualifies for recognition.
(2) If, on consideration of a scheme, the Commission is satisfied that the scheme qualifies for recognition and conforms to the relevant requirements in relation to one or more relevant services, the Commission shall approve the scheme as a recognised scheme to such extent as it considers appropriate.
(3) The Commission shall, on approving a scheme under this paragraph, give a direction for its recognition.
(4) On giving a direction for the recognition of a scheme, the Commission shall send a copy of the scheme and of the direction to the central office; and the central office shall keep the copy of the scheme and of the direction in the register.
Procedure for recognition: submission by societies
5 (1) Submission by or on behalf of building societies of a scheme for approval by the Commission as a recognised scheme shall be made by an application for recognition which shall be—
(a) made in such manner as the Commission specifies, either generally or in any particular case; and
(b) accompanied by such information as the Commission may reasonably require, either generally or in any particular case, in order to make its decision on the application;
and in this paragraph “the applicants” means those societies or the person acting on their behalf for the purposes of the application.
(2) Where an application is made to the Commission for recognition of a scheme then—
(a) if it appears to the Commission that the scheme qualifies for recognition and conforms to the relevant requirements in respect of one or more relevant services, the Commission shall approve the scheme as a recognised scheme to such extent as it considers appropriate;
(b) if it appears to the Commission that the scheme, with modifications, will, in addition to qualifying for recognition, conform to the relevant requirements in respect of one or more relevant services, and the applicants agree on appropriate modifications within the period of 21 days from the date on which the Commission notifies the applicants of the modifications it proposes for their agreement, the Commission shall approve the scheme as modified as a recognised scheme to such extent as it considers appropriate;
but otherwise it shall withold its approval.
(3) The Commission shall, on approving a scheme, give a direction for its recognition and send copies of the direction to the applicants.
(4) On giving a direction for the recognition of a scheme, the Commission shall also send a copy of the scheme and of the direction to the central office; and the central office shall keep the copy of the scheme and of the direction in the register.
Procedure on accession to schemes
6 (1) A building society or connected undertaking of a building societywhich accedes to a recognised scheme or has acceded to a scheme which becomes a recognised scheme shall, within the period of 21 days beginning with the date of its accession or on which it receives a copy of the direction for its recognition, as the case may be, send a notice of that fact to the central office and to the Commission.
(2) A notice by a society or undertakingunder sub-paragraph (1) above shall specify the relevant services action in relation to which by the society or undertakingis subject to investigation under the scheme.
(3) The central office, on receiving such a notice from a society, shall, if satisfied that the scheme is a recognised scheme to the extent required to enable the society to comply with its duty under section 83(3) in relation to the relevant services specified in the notice record the accession of the society to the scheme in the public file of the society.
(3A) The central office, on receiving such a notice from a connected undertaking of a society, shall, if satisfied that the scheme is a recognised scheme to the extent required to enable the society to comply with its duty under section 83(4) in relation to the relevant services specified in the notice record the accession of the undertaking to the scheme in the public file of the society.
(4) If a building society or connected undertakingfails to comply with sub-paragraph (1) above, the society or undertakingshall be liable on summary conviction—
(a) to a fine not exceeding level 4 on the standard scale; and
(b) in the case of a continuing offence, to an additional fine not exceeding £100 for every day during which the offence continuesX;
and so shall any director of the society or undertakingwho is also guilty of the offence.
Withdrawal of recognition
7 (1) The Commission may withdraw its recognition of a scheme if it appears to the Commission that—
(a) the scheme does not conform to the relevant requirements; or
(b) the scheme is so operated as not to conform to those requirements.
(2) Withdrawal of recognition of a scheme under this paragraph may operate in relation to the scheme as a whole or to the extent to which the scheme makes one or more relevant services subject to investigation under it.
8 (1) If the Commission proposes at any time to withdraw recognition of a scheme to any extent, it shall serve on each member, on the body administering the scheme and on the adjudicator under the scheme, a notice stating—
(a) that the Commission proposes to withdraw recognition and to what extent;
(b) the grounds for the proposed withdrawal of recognition; and
(c) that the person receiving the notice may make representations with respect to the proposed withdrawal within such period of not less than 14 days as may be specified in the notice.
(2) The Commission shall, before reaching a decision on whether to withdraw recognition, consider any representations made to it in accordance with sub-paragraph (1) above and shall serve on every person on whom it served a notice under that sub-paragraph a notice stating its decision and the grounds for it.
9 Withdrawal of recognition by the Commission shall take effect as from such date as is specified in the notice of its decision, being a date not less than one year nor more than two years after the date of the notice.
Withdrawal from membership
10 (1) A building society or connected undertaking of a building societywishing to withdraw from membership of a recognised scheme shall send notice of its proposed withdrawal to the central office and to the Commission.
(2) A notice by a society or undertakingunder sub-paragraph (1) above shall specify the relevant servicesaction in relation to which by the society or undertakingis subject to investigation under the scheme and the recognised scheme or recognised schemes of which it is or, on its withdrawal, will become a member under which, as regards each of the relevant services specified in the notice, action by the society or undertakingis or will be subject to investigation.
(3) The central office, on receiving such a notice from a society, if satisfied that its withdrawal from the scheme will not result in a failure by it to comply with the duty imposed on it by section 83(3), shall confirm the withdrawal of the society from the scheme; but, if the central office is not so satisfied, the central office shall withold its confirmation.
(3A) The central office, on receiving such a notice from a connected undertaking of a society, if satisfied that its withdrawal from the scheme will not result in a failure by the society to comply with the duty imposed on it by section 83(4), shall confirm the withdrawal of the undertaking from the scheme; but, if the central office is not so satisfied, the central office shall withhold its confirmation.
(4) If the central office withholds its confirmation of a society’s or undertaking’swithdrawal from a scheme, the society or undertakingshall continue to a member of the scheme and bound and entitled under the scheme accordingly.
(5) On confirming the withdrawal of a society or connected undertaking of a societyfrom a scheme the central office shall send to the society or undertakingand to the Commission notice of its decision and the central office shall record the decision in the public file of the society.
Section 85.
Part I Proceedings in Court
Jurisdiction of the court
1 (1) No court other than the High Court or, in the case of a building society whose principal office is in Scotland the Court of Session, shall have jurisdiction to hear and determine disputes to which this paragraph applies; and, in this Part of this Schedule, “the court” means the High Court or, as the case may be, the Court of Session.
(2) This paragraph applies to any dispute—
(a) between a building society and a member of the society in his capacity as a member, or
(b) between a building society and a representative of such a member in that capacity,
in respect of any rights or obligations arising from the rules of the society or any provision of this Act or any statutory instrument under it.
(3) Except in the cases referred to in sub-paragraph (5) below, no disputes to which this paragraph applies may be referred to arbitration.
(4) The court shall not hear and determine any dispute arising out of section 61(8)(a) or paragraph 20A(10)(a) or 31(4)(a) of Schedule 2 to this Act.
(5) The court shall not hear and determine any dispute which is required to be referred to arbitration under paragraph 4 below or which is referred to the FCA under paragraph 6 or to an adjudicator under paragraph 7 below except as provided in paragraph 2 below.
2 The court may hear and determine a dispute falling within paragraph 1(5) above in any case where, on the application of any person concerned, it appears to the court—
(a) that application has been made by either party to the dispute to the other party for the purpose of having the dispute settled by arbitration, and
(b) that either arbitrators have not been appointed within 40 days of that application or the arbitrators have refused, or have neglected for a period of 21 days, to proceed with the reference or make an award.
Right of FCA and PRA to be heard
3 (1) Any person who institutes proceedings in the court in relation to a dispute to which paragraph 1 above applies shall give notice of the fact and of the matter in dispute to the FCA and, if the society is a PRA-authorised person, the PRA .
(2) The court shall not proceed to hear a dispute to which paragraph 1 applies until the court is satisfied that the notice required by sub-paragraph (1) above has been given.
(3) The FCA and, if the society is a PRA-authorised person, the PRA shall be entitled, with the leave of the court, to attend and to be heard at any hearing of a dispute to which paragraph 1 applies.
Part II Arbitration
Circulation of election addresses, resolutions and statements
4 (1) If the rules of the society so provide, any dispute in respect of a refusal by a building society to send to its members—
(a) copies of an election address or a revised election address, in accordance with section 61(7), or
(b) any document required to be sent under paragraph 20A(1)(b) or 31(1) of Schedule 2 to this Act,
shall, unless the refusal is on one of the grounds specified in sub-paragraph (2) below, be referred to arbitration.
(2) Those grounds are—
(a) that publicity for the document in question would be likely to diminish substantially the confidence in the society of investing members of the public, or
(b) that the rights conferred by section 61(7) or paragraph 20A(1)(b) or 31(1) are being abused to seek needless publicity for defamatory matter.
Calling of special meeting
4A If the rules of the society so provide, any dispute in respect of a refusal by a building society to call a special meeting required to be called under paragraph 20A(1)(a) of Schedule 2 to this Act shall be referred to arbitration.
Procedure on a reference to arbitration
5 (1) This paragraph has effect in relation to an arbitration under paragraph 4(1) above.
(2) One or more arbitrators shall be appointed in the manner provided for by the rules of the building society; and so shall another arbitrator if an appointed arbitrator dies or refuses to act.
(3) No arbitrator acting on a reference shall be beneficially interested (whether directly or indirectly) in the funds of the society.
(4) The rules of the society may provide for the procedure to be followed on a reference to arbitration.
(5) An award made by arbitrators, or the majority of them, shall be final and binding.
(6) For the purposes of Part I of the Arbitration Act 1996 the rules of the society shall be treated as an arbitration agreement.
(7) In relation to Scotland, sub-paragraph (6) above shall be omitted.
Access to register of members
6 (1) Any dispute as to the rights of a member of a building society under paragraph 15 of Schedule 2 to this Act shall be referred to the FCA .
(2) The reference of a dispute to the FCA under this paragraph shall be treated as a reference to arbitration; and its award shall have the same effect as that of an arbitrator acting in a reference under paragraph 4(1) above.
(3) The FCA must consult the PRA before making any such award.
Disputes cognizable under a scheme
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General
8 In this Part of this Schedule, in relation to an arbitration in Scotland, references to an arbitrator shall be read as references to an arbiter.
SCHEDULE 15 Application of Companies Winding Up Legislation to Building Societies
Section 90.
Part I General Mode of Application
1 The enactments which comprise the companies winding up legislation (referred to in this Schedule as “the enactments”) are the provisions of—
(a) Parts IV, VI, VII , XII and XIII of the Insolvency Act 1986, or
(b) Articles 5 to 8 of Part I and Parts V, VII and XI of the Insolvency (Northern Ireland) Order 1989; or
and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or Articles 2(6) and 373 of, and Schedule 7 to, the Insolvency (Northern Ireland) Order 1989.
1A. In this Schedule—
“deposit” means rights of the kind described in—
paragraph 22 of Schedule 2 to the Financial Services and Markets Act 2000 (deposits); or
section 1(2)(b) of the Dormant Bank and Building Society Accounts Act 2008 (balances transferred under that Act to authorised reclaim fund); and
“relevant deposit” means—
an “eligible deposit” within the meaning given by paragraph 15C(1) of Schedule 6 to the Insolvency Act 1986 (categories of preferential debts) or a deposit of the kind mentioned in paragraph 15BB of that Schedule; or
an “eligible deposit” within the meaning given by paragraph 21(1) of Schedule 4 to the Insolvency (Northern Ireland) Order 1989 (categories of preferential debts) or a deposit of the kind mentioned in paragraph 20 of that Schedule.
2 Subject to the following provisions of this Schedule, the enactments apply to the winding up of building societies as they apply to the winding up of companies limited by shares and registered under the Companies Act 2006 in England and Wales or Scotland or (as the case may be) in Northern Ireland.
3 (1) The enactments shall, in their application to building societies, have effect with the substitution—
(a) for “company” of “ building society ” (except as otherwise specified in paragraphs 33B and 55G below) ;
(b) for “the registrar of companies” or “the registrar” of “ Financial Conduct Authority ”;
(c) for “the articles” of “ the rules ”; and
(d) for “registered office” of “ principal office ”.
(2) In the application of the enactments to building societies—
(aa) every reference to a company registered in Scotland shall have effect as a reference to a building society whose principal office is situated in Scotland;
(aa) every reference to a company registered in Scotland shall have effect as a reference to a building society whose registered office is situated in Scotland;
(ab) a reference to the debts of a company includes a reference to sums due to shareholding members of a building society in respect of deposits;
(a) every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and
(b) every reference to an administrative receiver shall be omitted.
4 (1) Where any of the enactments as applied to building societies requires a notice or other document to be sent to the FCA , it shall have effect as if it required the FCA to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.
(2) Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.
5 Any enactment which specifies a money sum altered by order under section 416 of the Insolvency Act 1986, or, as the case may be, Article 362 of the Insolvency (Northern Ireland) Order 1989, (powers to alter monetary limits) applies with the effect of the alteration.
Part II Modified Application of Insolvency Act 1986
Parts IV , 6, 7, 12 and 13 and Schedule 10
Preliminary
6 In this Part of this Schedule, Part IV of the Insolvency Act 1986 is referred to as “Part IV”; and that"Act is referred to as “the Act”.
6ZA. Parts 4, 6, 7 and 12 of, and Schedule 10 to, the Act, in their application to building societies, have effect without the amendments of those Parts and that Schedule made by—
(a) section 122 of the Small Business, Enterprise and Employment Act 2015 (abolition of requirements to hold meetings: company insolvency);
(b) section 124 of that Act (ability for creditors to opt not to receive certain notices: company insolvency); and
(c) Part 1 of Schedule 9 to that Act (sections 122 to 125: further amendments).
6A. In the following provisions of the Act a reference to the creditors, general creditors or unsecured creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit—
(a) subsection (1) of section 143 (general functions of liquidator in winding up by the court);
(b) subsection (3) of section 149 (debts due from contributory to company);
(c) subsection (4) of section 168 (supplementary powers (England and Wales));
(d) subsection (2)(b) of section 175 (preferential debts (general provision));
(e) subsection (1) of section 176ZA (payment of expenses of winding up (England and Wales)); ...
(f) subsections (3)(b) and (5)(a) of section 176A (share of assets for unsecured creditors);
(g) subsection (1)(e) of section 391O (direct sanctions orders);
(h) subsection (5) of section 391Q (direct sanctions order: conditions); and
(i) subsection (3)(e) of section 391R (direct sanctions direction instead of order).
Members of a building society as contributories in winding up
7 (1) Section 74 (liability of members) of the Act is modified as follows.
(2) In subsection (1), the reference to any past member shall be omitted.
(3) Paragraphs (a) to (d) of subsection (2) shall be omitted; and so shall subsection (3).
(3A) In paragraph (f) of subsection (2) the reference to a sum due to a member of the company by way of dividends, profits or otherwise does not include a sum due to a shareholding member of a building society in respect of a deposit.
(4) The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.
8 Sections 75 to 78 and 83 in Chapter I of Part IV (miscellaneous provisions not relevant to building societies) do not apply.
9 (1) Section 79 (meaning of “contributory”) of the Act does not apply.
(2) In the enactments as applied to a building society, “contributory”—
(a) means every person liable to contribute to the assets of the society in the event of its being wound up, and
(b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
(c) includes persons who are liable to pay or contribute to the payment of—
(i) any debt or liability of the building society being wound up, or
(ii) any sum for the adjustment of rights of members among themselves, or
(iii) the expenses of the winding up;
but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.
Voluntary winding up
10 (1) Section 84 of the Act does not apply.
(2) In the enactments as applied to a building society, the expression “resolution for voluntary winding up” means a resolution passed under section 88(1) of this Act.
11 In subsection (1) of section 101 (appointment of liquidation committee) of the Act, the reference to functions conferred on a liquidation committee by or under that Act shall have effect as a reference to its functions by or under that Act as applied to building societies.
12 (1) Section 107 (distribution of property) of the Act does not apply; and the following applies in its place.
(2) Subject to the provisions of Part IV relating to preferential payments, a building society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors . . . pari passu and, subject to that application, in accordance with the rules of the society.
(3) In sub-paragraph (2) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.
13 Sections 110 and 111 (liquidator accepting shares, etc. as consideration for sale of company property) of the Act do not apply.
14 Section 116 (saving for certain rights) of the Act shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.
Winding up by the court
15 In sections 117 (High Court and county court jurisdiction) and 120 (Court of Session and sheriff court jurisdiction) of the Act, each reference to a company’s share capital paid up or credited as paid up shall have effect as a reference to the amount standing to the credit of shares in a building society as shown by the latest balance sheet.
16 (1) Section 122 (circumstances in which company may be wound up by the court) of the Act does not apply in relation to a building society whose principal office is situated in England and Wales.
(2) Section 122 has effect in relation to a building society whose principal office is situated in Scotland as if subsection (1) were omitted.
17 Section 124 (application for winding up) of the Act does not apply.
18 (1) In section 125 (powers of court on hearing of petition) of the Act, subsection (1) applies with the omission of the words from “but the court” to the end of the subsection.
(2) The conditions which the court may impose under section 125 of the Act include conditions for securing—
(a) that the building society be dissolved by consent of its members under section 87, or
(b) that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or
(c) that the society transfers its business to a company under section 97,
and may also include conditions for securing that any default which occasioned the petition be made good and that the costs, or in Scotland the expenses, of the proceedings on that petition be defrayed by the person or persons responsible for the default.
19 Section 126 (power of court, between petition and winding up order, to stay or restrain proceedings against company) of the Act has effect with the omission of subsection (2).
20 If, before the presentation of a petition for the winding up by the court of a building society, an instrument of dissolution under section 87 is placed in the society’s public file, section 129(1) (commencement of winding up by the court) of the Act shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.
21 (1) Section 130 of the Act (consequences of winding-up order) shall have effect with the following modifications.
(2) Subsections (1) and (3) shall be omitted.
(3) A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the FCA and, if the society is a PRA-authorised person, the PRA ; and the FCA must keep the notice in the public file of the society.
(4) If a building society fails to comply with sub-paragraph (3) above, it shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and so shall any officer who is also guilty of the offence.
22 Section 140 (appointment of liquidator by court in certain circumstances) of the Act does not apply.
23 In the application of sections 141(1) and 142(1) (liquidation committees), of the Act to building societies, the references to functions conferred on a liquidation committee by or under that Act shall have effect as references to its functions by or under that Act as so applied.
23A. Section 143 (general functions of liquidator in winding up by the court) of the Act has effect as if after subsection (1) there were inserted—
(1A) Subject to the provisions of Part 4 relating to preferential payments, a building society’s property in the winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society.
(1B) In subsection (1A) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.
24 The conditions which the court may impose under section 147 (power to stay or sist winding up) of the Act shall include those specified in paragraph 18(2) above.
25 Section 154 (adjustment of rights of contributories) of the Act shall have the effect with the modification that any surplus is to be distributed in accordance with the rules of the society.
26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Winding up: general
27 Section 187 (power to make over assets to employees) of the Act does not apply.
28 (1) In section 201 (dissolution: voluntary winding up) of the Act, subsection (2) applies without the words from “and on the expiration” to the end of the subsection and, in subsection (3), the word “However” shall be omitted.
(2) Sections 202 to 204 (early dissolution) of the Act do not apply.
29 In section 205 (dissolution: winding up by the court) of the Act, subsection (2) applies with the omission of the words from “and, subject” to the end of the subsection; and in subsections (3) and (4) references to the Secretary of State shall have effect as references to the appropriate authority .
Penal provisions
30 Sections 216 and 217 of the Act (restriction on re-use of name) do not apply.
31 (1) Sections 218 and 219 (prosecution of delinquent officers) of the Act do not apply in relation to offences committed by members of a building society acting in that capacity.
(2) Sections 218(5) of the Act and subsections (1) and (2) of section 219 of the Act do not apply.
(3) The references in subsections (3) and (4) of section 219 of the Act to the Secretary of State shall have effect as references to the FCA ; and the reference in subsection (3) to subsection 218 of the Act shall have effect as a reference to that section as supplemented by paragraph 32 below.
32 (1) Where a report is made to the prosecuting authority (within the meaning of section 218) under section 218(4) of the Act, in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the FCA for further enquiry.
(2) On such a reference to it the FCA shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on the matter.
(3) An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.
Protection of supplies
32A Section 233B of the Act (protection of supplies of goods and services) does not apply.
Preferential debts
33 Section 387 (meaning in Schedule 6 of “the relevant date”) of the Act applies with the omission of subsections (2) and (4) to (6).
Insolvency practitioners: their qualification and regulation
33A. Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—
(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.
.
33B. (1) In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies has effect without the modification in paragraph 3(1)(a) above—
(a) sections 390A and 390B(1) and (3) (authorisation of insolvency practitioners); and
(b) sections 391O(1)(b) and 391R(3)(b) (court sanction of insolvency practitioners in public interest cases).
(2) In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 3(1)(a) above.
Part III Modified application of Insolvency (Northern Ireland) Order 1989
Parts V , 11 and 12
Preliminary
34 In this Part of this Schedule, Part V of the Insolvency (Northern Ireland) Order 1989 is referred to as “Part V”, that Order is referred to as “the Order” and references to “Articles” are references to Articles of that Order.
34A. In the following provisions a reference to the creditors, general creditors or unsecured creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit—
(a) paragraph (1) of Article 121 (general functions of liquidator in winding up by the High Court);
(b) paragraph (3) of Article 127 (debts due from contributory to company);
(c) paragraph (4) of Article 143 (supplementary powers);
(d) paragraph (2)(b) of Article 149 (preferential debts (general provision));
(e) paragraph (1) of Article 150ZA (payment of expenses of winding up); ...
(f) paragraphs (3)(b) and (5)(a) of Article 150A (share of assets for unsecured creditors);
(g) paragraph (1)(e) of Article 350O (direct sanctions orders);
(h) paragraph (5) of Article 350Q (direct sanctions order: conditions); and
(i) paragraph (3)(e) of Article 350R (direct sanctions direction instead of order).
Members of a building society as contributories in winding up
35 (1) Article 61 (liability of members) is modified as follows.
(2) In paragraph (1), the reference to any past member shall be omitted.
(3) Sub-paragraphs (a) to (d) of paragraph (2) shall be omitted; and so shall paragraph (3).
(3A) In sub-paragraph (f) of paragraph (2) the reference to a sum due to a member of the company by way of dividends, profits or otherwise does not include a sum due to a shareholding member of a building society in respect of a deposit.
(4) The extent of the liability of a member of a building society in a winding up shall not exceed the extent of his liability under paragraph 6 of Schedule 2 to this Act.
36 Articles 62 to 65 and 69 in Chapter I of Part V (miscellaneous provisions not relevant to building societies) do not apply.
37 In the enactments as applied to a building society, “contributory”—
(a) means every person liable to contribute to the assets of the society in the event of its being wound up, and
(b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
(c) includes persons who are liable to pay or contribute to the payment of—
(i) any debt or liability of the building society being wound up, or
(ii) any sum for the adjustment of rights of members among themselves, or
(iii) the expenses of the winding up;
but does not include persons liable to contribute by virtue of a declaration by the Court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading).
Voluntary winding up
38 (1) Article 70 does not apply.
(2) In the enactments as applied to a building society, the expression “resolution for voluntary winding up” means a resolution passed under section 88(1) of this Act.
39 In paragraph (1) of Article 87 (appointment of liquidation committee), the reference to functions conferred on a liquidation committee by or under the Order shall have effect as a reference to its functions by or under the Order as applied to building societies.
40 (1) Article 93 (distribution of property) does not apply; and the following applies in its place.
(2) Subject to the provisions of Part V relating to preferential payments, a building society’s property in a voluntary winding up shall be applied in satisfaction of the society’s liabilities to creditors (including any liability resulting from the variation to the liquidator’s duty effected by section 28 or 31 of this Act) pari passu and, subject to that application, in accordance with the rules of the society.
(3) In sub-paragraph (2) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.
41 Articles 96 and 97 (liquidator accepting shares, etc, as consideration for sale of company property) do not apply.
42 Article 101 (saving for certain rights) shall also apply in relation to the dissolution by consent of a building society as it applies in relation to its voluntary winding up.
Winding up by the High Court
43 Article 102 (circumstances in which company may be wound up by the High Court) does not apply.
44 Article 104 (application for winding up) does not apply.
45 (1) In Article 105 (powers of High Court on hearing of petition), paragraph (1) applies with the omission of the words from “but the Court” to the end of the paragraph.
(2) The conditions which the High Court may impose under Article 105 include conditions for securing—
(a) that the building society be dissolved by consent of its members under section 87, or
(b) that the society amalgamates with, or transfers its engagements to, another building society under section 93 or 94, or
(c) that the society transfers its business to a company under section 97,
and may also include conditions for securing that any default which occasioned the petition be made good and that the costs of the proceedings on that petition be defrayed by the person or persons responsible for the default.
46 Article 106 (power of High Court, between petition and winding-up order, to stay or restrain proceedings against company) has effect with the omission of paragraph (2).
47 If, before the presentation of a petition for the winding up by the High Court of a building society, an instrument of dissolution under section 87 is placed in the society’s public file, Article 109(1) (commencement of winding up by the High Court) shall also apply in relation to the date on which the instrument is so placed and to any proceedings in the course of the dissolution as it applies to the commencement date for, and proceedings in, a voluntary winding up.
48 (1) Article 110 (consequences of winding-up order) shall have effect with the following modifications.
(2) Paragraphs (1) and (3) shall be omitted.
(3) A building society shall, within 15 days of a winding-up order being made in respect of it, give notice of the order to the FCA and, if the society is a PRA-authorised person, the PRA ; and the FCA must keep the notice in the public file of the society.
(4) If a building society fails to comply with sub-paragraph (3) above, it shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale; and so shall any officer who is also guilty of the offence.
49 Article 119 (appointment of liquidator by High Court in certain circumstances) does not apply.
50 In the application of Article 120(1) (liquidation committee) to building societies, the references to functions conferred on a liquidation committee by or under the Order shall have effect as references to its function by or under the Order as so applied.
50A. Article 121 (general functions of liquidator in winding up by the High Court) of the Order has effect as if after paragraph (1) there were inserted—
(1A) Subject to the provisions of Part V relating to preferential payments, a building society’s property in the winding up shall be applied in satisfaction of the society’s liabilities to creditors pari passu and, subject to that application, in accordance with the rules of the society.
(1B) In paragraph (1A) the reference to the society’s liabilities to creditors includes a reference to the society’s liabilities to shareholding members of the society in respect of deposits which are not relevant deposits.
51 The conditions which the High Court may impose under Article 125 (power to stay winding up) shall include those specified in paragraph 45(2) above.
52 Article 132 (adjustment of rights of contributories) shall have effect with the modification that any surplus is to be distributed in accordance with the rules of the society.
53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Winding up: general
54 Article 158 (power to make over assets to employees) does not apply.
55 (1) In Article 166 (dissolution: voluntary winding up), paragraph (2) applies without the words from “and on the expiration” to the end of the paragraph and, in paragraph (3), the word “However” shall be omitted.
(2) Articles 167 and 168 (early dissolution) do not apply.
55A In Article 169 (dissolution: winding up by the High Court) paragraph (1) applies with the omission of the words from “and, subject” to the end of the paragraph; and in paragraphs (2) and (3) references to the Department shall have effect as references to the appropriate authority .
Penal provisions
55B Articles 180 and 181 (restriction on re-use of name) do not apply.
55C (1) Articles 182 and 183 (prosecution of delinquent officers) do not apply in relation to offences committed by members of a building society acting in that capacity.
(2) Article 182(4) and paragraphs (1) and (2) of Article 183 do not apply.
(3) The references in paragraphs (3) and (5) of Article 183 to the Department shall have effect as references to the FCA ; and the reference in paragraph (3) to Article 182 shall have effect as a reference to that Article as supplemented by paragraph 55D below.
55D (1) Where a report is made to the prosecuting authority (within the meaning of Article 182) under Article 182(3), in relation to an officer of a building society, he may, if he thinks fit, refer the matter to the FCA for further enquiry.
(2) On such a reference to it the FCA shall exercise its power under section 55(1) of this Act to appoint one or more investigators to investigate and report on the matter.
(3) An answer given by a person to a question put to him in exercise of the powers conferred by section 55 on a person so appointed may be used in evidence against the person giving it.
Protection of supplies
55DA Article 197B (protection of supplies of goods and services) does not apply.
Preferential debts
55E Article 347 (meaning in Schedule 4 of “the relevant date”) applies with the omission of paragraphs (2) and (4) to (6).
Insolvency practitioners: their qualification and regulation
55F. Article 349 (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—
(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.
.
55G. (1) In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies, the reference to companies has effect without the modification in paragraph 3(1)(a) above—
(a) Articles 349A and 349B(1) and (3) (authorisation of insolvency practitioners); and
(b) Articles 350O(1)(b) and 350R(3)(b) (court sanction of insolvency practitioners in public interest cases).
(2) In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) the reference to a company has effect without the modification in paragraph 3(1)(a) above.
Part IV Dissolution of Building Society wound up (England and Wales, Scotland and Northern Ireland)
56 (1) Where a building society has been wound up voluntarily, it is dissolved as from 3 months from the date of the placing in the public file of the society of the return of the final meetings of the society and its creditors made by the liquidator under—
(a) section 94 or (as the case may be) 106 of the Insolvency Act 1986 (as applied to building societies), or on such other date as is determined in accordance with section 201 of that Act, or
(b) Article 80 or (as the case may be) 92 of the Insolvency (Northern Ireland) Order 1989(as so applied), or on such other date as is determined in accordance with that Article,
as the case may be.
(2) Where a building society has been wound up by the court, it is dissolved as from 3 months from the date of the placing in the public file of the society of—
(a) the liquidator’s notice under section 172(8) of the Insolvency Act 1986 (as applied to building societies) or, as the case may be, Article 146(7) of the Insolvency (Northern Ireland) Order 1989 (as applied to building societies), or
(b) the notice of the completion of the winding up from the official receiver or the official receiver for Northern Ireland,
or on such other date as is determined in accordance with section 205 of that Act or Article 169 of that Order, as the case may be.
57 (1) Sections 1012 to 1023 and 1034 of the Companies Act 2006 (property of dissolved company) apply in relation to the property of a dissolved building society (whether dissolved under section 87 or following its winding up) as they apply in relation to the property of a dissolved company.
(2) Paragraph 3(1) above shall apply to those sections for the purpose of their application to building societies.
(3) Any reference in those sections to restoration to the register shall be read as a reference to the effect of an order under section 91 of this Act.
Insolvency rules and fees: England and Wales and Scotland
58 (1) Rules may be made under section 411 of the Insolvency Act for the purpose of giving effect, in relation to building societies, to the provisions of the applicable winding up legislation.
(2) An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the applicable winding up legislation and the performance by the official receiver or the Secretary of State of functions under it.
Insolvency rules and fees: Northern Ireland
59 (1) Rules may be made under Article 359 of the Insolvency (Northern Ireland) Order 1989 for the purpose of giving effect in relation to building societies, to the provisions of the applicable winding up legislation.
(2) An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the applicable winding-up legislation and the performance by the official receiver for Northern Ireland or that Department of functions under it.
SCHEDULE 15A Application of other companies insolvency legislation to building societies
Part I General mode of application
1 (1) Subject to the provisions of this Schedule, the enactments specified in sub-paragraph (2) below (referred to in this Schedule as “the enactments”) apply in relation to building societies as they apply in relation to companies limited by shares and registered under the Companies Act 2006 in England and Wales or Scotland or (as the case may be) in Northern Ireland.
(2) The enactments referred to in sub-paragraph (1) above are—
(a) Parts I ..., II, and 3, section 176ZB (in Part 4), and VI, VII, XII and XIII, section 434 and Part XVIII of the Insolvency Act 1986, or
(b) Part I, Part II ..., Parts III, IV, VII, XI and XII and Article 378 of the Insolvency (Northern Ireland) Order 1989,
and, in so far as they relate to offences under any such enactment, sections 430 and 432 of, and Schedule 10 to, the Insolvency Act 1986 or Article 2(6) and 373 of, and Schedule 7 to, the Insolvency (Northern Ireland) Order 1989.
2 (1) The enactments shall, in their application to building societies, have effect with the substitution—
(aa) every reference to a company registered in Scotland shall have effect as a reference to a building society whose principal office is situated in Scotland;
(aa) every reference to a company registered in Scotland shall have effect as a reference to a building society whose registered office is situated in Scotland;
(a) for “company” of “ building society ” (except as otherwise specified in paragraphs 27H and 54 below) ;
(b) for “the registrar of companies” or “the registrar” of “ Financial Conduct Authority ”;
(c) for “the articles” of “ the rules ”; and
(d) for “registered office” of “ principal office ”.
(2) In the application of the enactments to building societies—
(a) every reference to the officers, or to a particular officer, of a company shall have effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer; and
(b) every reference to an administrative receiver , other than a reference in section 29(2), 72A or 251 of the Insolvency Act 1986 or in Article 5(1) or 59A of the Insolvency (Northern Ireland) Order 1989, shall be omitted.
3 (1) Where any of the enactments as applied to building societies requires a notice or other document to be sent to the FCA , it shall have effect as if it required the FCA to keep the notice or document in the public file of the society concerned and to record in that file the date on which the notice or document is placed in it.
(2) Where any of the enactments, as so applied, refers to the registration, or to the date of registration, of such a notice or document, that enactment shall have effect as if it referred to the placing of the notice or document in the public file or (as the case may be) to the date on which it was placed there.
(3) Any reference in any of the enactments, as so applied, to the register shall have effect as a reference to the public file.
4 (1) Rules may be made under section 411 of the Insolvency Act 1986 or, as the case may be, Article 359 of the Insolvency (Northern Ireland) Order 1989 for the purpose of giving effect, in relation to building societies, to the provisions of the enactments.
(2) An order made by the competent authority under section 414 of the Insolvency Act 1986 may make provision for fees to be payable under that section in respect of proceedings under the enactments and the performance by the official receiver or the Secretary of State of functions under them.
(3) An order made by the Department of Economic Development under Article 361 of the Insolvency (Northern Ireland) Order 1989 may make provision for fees to be payable under that Article in respect of proceedings under the enactments and the performance by the official receiver or that Department of functions under them.
5 Any enactment which specifies a money sum altered by order under section 416 of the Insolvency Act 1986, or, as the case may be, Article 362 of the Insolvency (Northern Ireland) Order 1989, (powers to alter monetary limits) applies with the effect of the alteration.
5A In this Schedule—
“deposit” and “relevant deposit” have the meaning given by paragraph 1A of Schedule 15; and
“scheme manager” has the same meaning as in the Financial Services and Markets Act 2000.
Part II Modified Application of Parts I to III , 6, 7, 12 and 13 of Insolvency Act 1986
Preliminary
6 In this Part of this Schedule, the Insolvency Act 1986 is referred to as “the Act”.
6A. Parts 1, 3, 6, 7 and 12 of the Act, in their application to building societies, have effect without the amendments of those Parts made by—
(a) section 122 of the Small Business, Enterprise and Employment Act 2015 (abolition of requirements to hold meetings: company insolvency);
(b) section 124 of that Act (ability for creditors to opt not to receive certain notices: company insolvency); and
(c) Part 1 of Schedule 9 to that Act (sections 122 to 125: further amendments).
Voluntary arrangements
7 Section 1 of the Act (proposals for voluntary arrangements) has effect as if—
(a) it required any proposal under Part I of the Act to be so framed as to enable a building society to comply with the requirements of this Act; and
(b) any reference to debts included a reference to liabilities owed to the holders of shares in a building society.
8 In section 2 (procedure where nominee is not liquidator or administrator) and section 3 (summoning of meetings) of the Act as applied to a building society, any reference to a meeting of the society is a reference to—
(a) a meeting of both shareholding and borrowing members of the society; and
(b) a meeting of shareholding members alone.
and subsection (1) of section 2 shall have effect with the omission of the words from “and the directors” to the end.
8A In subsection (2) of section 4A of the Act (approval of arrangement) as applied to a building society, paragraph (b) and the word “or” immediately preceding that paragraph are omitted.
9 In section 6 of the Act (challenge of decisions) as applied to a building society, “contributory”—
(a) means every person liable to contribute to the assets of the society in the event of its being wound up, and
(b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
(c) includes persons who are liable to pay or contribute to the payment of—
(i) any debt or liability of the building society being wound up, or
(ii) any sum for the adjustment of rights of members among themselves, or
(iii) the expenses of the winding up;
but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or section 214 (wrongful trading) of the Act.
9A In section 7A of the Act (prosecution of delinquent officers) as applied to a building society—
(a) in subsection (2), for paragraphs (i) and (ii) there is substituted “ the FCA ”,
(b) subsections (3) to (7) are omitted,
(c) in subsection (8), for “Secretary of State” there is substituted “ FCA ”.
Administration orders
10 (1) Section 8 of the Act (power of court to make administration order) has effect as if it included provision that, where—
(a) an application for an administration order to be made in relation to a building society is made by the FCA or the PRA (with or without other parties); and
(b) the society has defaulted in an obligation to pay any sum due and payable in respect of any deposit or share,
the society shall be deemed for the purposes of subsection (1) to be unable to pay its debts.
(2) In subsection (3) of that section, paragraph (c) and, in subsection (4) of that section, the words from “nor where” to the end are omitted.
11 (1) Subsection (1) of section 9 of the Act (application for administration order) as applied to a building society has effect as if—
(a) it enabled an application to the court for an administration order to be by petition presented, with or without other parties, by the FCA or the PRA or by a shareholding member entitled under section 89(3) of this Act to petition for the winding up of the society; and
(b) the words from “or by the clerk” to “on companies)” were omitted.
(2) In subsection (2)(a) of that section as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the Commission (unless it is a petitioner).
(3) Subsection (3) of that section, and in subsection (4) of that section, the words “Subject to subsection (3),” are omitted.
12 In section 10 of the Act (effect of application for administration order), the following are omitted, namely—
(a) in subsection (2), paragraphs (b) and (c); and
(b) subsection (3).
13 In section 11 of the Act (effect of administration order), the following are omitted, namely—
(a) in subsection (1), paragraph (b) and the word “and” immediately preceding that paragraph;
(b) in subsection (3), paragraph (b);
(c) in subsection (4), the words “an administrative receiver of the company has vacated office under subsection (1)(b), or”; and
(d) subsection (5).
14 In subsection (1) of section 12 of the Act (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
15 Subsection (3) of section 13 of the Act (appointment of administrator) has effect as if it enabled an application for an order under subsection (2) of that section to be made by the FCA or the PRA .
16 (1) Subject to sub-paragraph (2) below, section 14 of the Act (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that section—
(a) to ensure compliance with the provisions of this Act; and
(b) not to appoint to be a director any person who is not a fit and proper person to hold that position.
(2) Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act . . ..
(3) In subsection (4) of that section as applied to a building society, the reference to any power conferred by the Act or the Companies Acts or by the company’s articles is a reference to any power conferred by this Act or by the society’s memorandum or rules.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
17 (1) Subject to sub-paragraph (3) below, paragraph 16 of Schedule 1 to the Act (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society.
(2) No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act.
(3) No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the court, or by meetings summoned under section 23(1) or 25(2) of the Act (as modified by paragraph 21 or 23 below).
18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
19 (1) Section 17 of the Act (general duties of administrator) has effect as if, instead of the requirement imposed by subsection (3), it required the administrator of a building society to summon a meeting of the society’s creditors if—
(a) he is requested, in accordance with the rules, to do so by 500 of the society’s creditors, or by one-tenth, in number or value, of those creditors, or
(b) he is directed to do so by the court.
(2) That section also has effect as if it required the administrator of a building society to summon a meeting of the society’s shareholding members if—
(a) he is requested, in accordance with the rules, to do so by 500 of the society’s shareholding members, or by one-tenth, in number, of those members, or
(b) he is directed to do so by the court.
20 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
21 (1) Subsection (1) of section 23 of the Act (statement of proposals) as applied to a building society has effect as if—
(a) the reference to the Financial Conduct Authority included a reference to the scheme manager;
(b) the reference to all creditors included a reference to all holders of shares in the society; and
(c) the reference to a meeting of the society’s creditors included a reference to a meeting of holders of shares in the society.
(2) In subsection (2) of that section as so applied, references to members of the society do not include references to holders of shares in the society.
22 Section 24 of the Act (consideration of proposals by creditors’ meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.
23 (1) Section 25 of the Act (approval of substantial revisions) as applied to a building society has effect as if—
(a) subsection (2) required the administrator to send a statement in the prescribed form of his proposed revisions to the FCA, to the PRA and to the scheme manager; and
(b) the reference in that subsection to a meeting of creditors included a reference to a meeting of holders of shares in the society.
(2) In subsection (3) of that section as so applied, references to members of the society do not include references to holders of shares in the society.
24 Subsection (1) of section 27 of the Act (protection of interests of creditors and members) has effect—
(a) as if it enabled the FCA, the PRA or the scheme manager to apply to the court by petition for an order under that section; and
(b) in relation to an application by the FCA, the PRA or the scheme manager, as if the words “(including at least himself)” were omitted.
Receivers and managers
25 In section 38 of the Act (receivership accounts), “prescribed” means prescribed by regulations made by statutory instrument by the Treasury.
26 In subsection (1) of section 39 of the Act (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
27 Subsection (3) of section 40 of the Act (payment of debts out of assets subject to floating charge), as applied to a building society, has effect as if the reference to general creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.
27A. Sections 42 to 49 of the Act (administrative receivers) are omitted.
27B. Subsection (1) of section 51 of the Act (power to appoint receiver), as applied to a building society, has effect as if for the words “an incorporated company (whether a company registered under the Companies Act 2006 or not)” there were substituted “a building society”.
27C. Subsection (3) of section 59 of the Act (priority of debts), as applied to a building society, has effect as if the reference to ordinary creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.
27D. Subsection (1) of section 67 of the Act (report by receiver), as applied to a building society, has effect as if—
(a) the reference to the Financial Conduct Authority included a reference to the scheme manager; and
(b) in paragraph (d) the reference to other creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.
27E. Subsection (1) of section 70 of the Act (interpretation for Chapter 2), as applied to a building society, has effect as if—
(a) in the definition of “company” for the words “an incorporated company (whether or not a company registered under the Companies Act 2006)” there were substituted “a building society”; and
(b) the definition of “the register” were omitted.
27F. Chapter 4 of Part 3 of the Act (prohibition of appointment of administrative receiver), as applied to a building society, has effect as if—
(a) in section 72A (floating charge holder not to appoint administrative receiver)—
(i) in subsections (1) and (2) the word “qualifying” and in subsection (3) the definition of “holder of a qualifying floating charge in respect of a company’s property” were omitted; and
(ii) subsections (4)(a), (5) and (6) were omitted; and
(b) sections 72B to 72H (exceptions to prohibition) were omitted.
Protection of supplies
27FA Section 233B of the Act (protection of supplies of goods and services) is omitted.
Insolvency practitioners: their qualification and regulation
27G. Section 390 of the Act (persons not qualified to act as insolvency practitioners) has effect as if for subsection (2) there were substituted—
(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.
.
27H. (1) In the following provisions of the Act, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 2(1)(a) above—
(a) sections 390A and 390B(1) and (3) (authorisation of insolvency practitioners); and
(b) sections 391O(1)(b) and 391R(3)(b) (court sanction of insolvency practitioners in public interest cases).
(2) In sections 391Q(2)(b) (direct sanctions order: conditions) and 391S(3)(e) (power for Secretary of State to obtain information) of the Act the reference to a company has effect without the modification in paragraph 2(1)(a) above.
27I. In sections 391O, 391Q and 391R of the Act a reference to the creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit.
Part III Modified Application of Parts II, III , 4 and 12 of Insolvency (Northern Ireland) Order 1989
Preliminary
28 In this Part of this Schedule, the Insolvency (Northern Ireland) Order 1989 is referred to as “the Order”.
Voluntary arrangements
29 Article 14 of the Order (proposals for voluntary arrangements) has effect as if—
(a) it required any proposal under Part II of the Order to be so framed as to enable a building society to comply with the requirements of this Act; and
(b) any reference to debts included a reference to liabilities owed to the holders of shares in a building society.
30 In Article 15 (procedure where nominee is not liquidator or administrator) and Article 16 (summoning of meetings) of the Order as applied to a building society, any reference to meetings of the society is a reference to—
(a) a meeting of both shareholding and borrowing members of the society; and
(b) a meeting of shareholding members alone.
and paragraph (1) of Article 15 shall have effect with the omission of the words from “and the directors” to the end.
30A In paragraph (2) of Article 17A of the Order (approval of arrangement) as applied to a building society, sub-paragraph (b) and the word “or” immediately preceding that sub-paragraph are omitted.
31 In Article 19 of the Order (challenge of decisions) as applied to a building society, “contributory”—
(a) means every person liable to contribute to the assets of the society in the event of its being wound up, and
(b) for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are to be deemed contributories, includes any person alleged to be a contributory, and
(c) includes persons who are liable to pay or contribute to the payment of—
(i) any debt or liability of the building society being wound up, or
(ii) any sum for the adjustment of rights of members among themselves, or
(iii) the expenses of the winding up;
but does not include persons liable to contribute by virtue of a declaration by the High Court under Article 177 (imputed responsibility for fraudulent trading) or Article 178 (wrongful trading) of the Order.
31A In Article 20A of the Order (prosecution of delinquent officers) as applied to a building society—
(a) in paragraph (2) for the words “the Department”, in each place where they occur, there are substituted the words “ each of the Financial Conduct Authority and the Prudential Regulation Authority ”,
(b) paragraphs (3) to (7) are omitted,
(c) in paragraph (8)—
(i) after the words “Northern Ireland” there are inserted the words “or the Financial Conduct Authority or the Prudential Regulation Authority ”, and
(ii) after the words “Northern Ireland” and the words “the Director”, in the second place where they occur, there are inserted the words “or the Financial Conduct Authority or the Prudential Regulation Authority ”,
(d) in paragraph (9) after the words “for Northern Ireland” there are inserted the words “or the Financial Conduct Authority or the Prudential Regulation Authority ”.
Administration orders
32 (1) Article 21 of the Order (power of High Court to make administration order) has effect as if it included provision that, where—
(a) an application for an administration order to be made in relation to a building society is made by the FCA or the PRA (with or without other parties); and
(b) the society has defaulted in an obligation to pay any sum due and payable in respect of any deposit or share,
the society shall be deemed for the purposes of paragraph (1) to be unable to pay its debts.
(2) In paragraph (3) of that Article, sub-paragraph (c) and, in paragraph (4) of that Article, the words from “nor where” to the end are omitted.
33 (1) Paragraph (1) of Article 22 of the Order (application for administration order) as applied to a building society has effect as if—
(a) it enabled an application to the High Court for an administration order to be by petition presented, with or without other parties, by the FCA, by the PRA or by a shareholding member entitled under section 89(3) of this Act to petition for the winding up of the society; and
(b) the words from “or by the chief clerk” to “on companies)”, in the second place where they occur, were omitted.
(2) In paragraph (2)(a) of that Article as so applied, the reference to any person who has appointed, or is or may be entitled to appoint, an administrative receiver of the society is a reference to the FCA or, as the case may be, the PRA (unless it is a petitioner).
(3) Paragraph (3) of that Article, and in paragraph (4) of that Article, the words “Subject to paragraph (3),” are omitted.
34 In Article 23 of the Order (effect of application for administration order), the following are omitted, namely—
(a) in paragraph (2), sub-paragraphs (b) and (c); and
(b) paragraph (3).
35 In Article 24 of the Order (effect of administration order), the following are omitted, namely—
(a) in paragraph (1), sub-paragraph (b) and the word “and” immediately preceding that sub-paragraph;
(b) in paragraph (3), sub-paragraph (b);
(c) in paragraph (4), the words “an administrative receiver of the company has vacated office under paragraph (1)(b), or”; and
(d) paragraph (5).
36 In paragraph (1) of Article 25 of the Order (notification of administration order), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
37 Paragraph (3) of Article 26 of the Order (appointment of administrator) has effect as if it enabled an application for an order under paragraph (2) of that Article to be made by the FCA and the PRA .
38 (1) Subject to sub-paragraph (2) below, Article 27 of the Order (general powers of administrator) has effect as if it required the administrator of a building society, in exercising his powers under that Article—
(a) to ensure compliance with the provisions of this Act; and
(b) not to appoint to be a director any person who is not a fit and proper person to hold that position.
(2) Sub-paragraph (1)(a) above does not apply in relation to section 5, 6 or 7 of this Act . . ..
(3) In paragraph (4) of that Article as applied to a building society, the reference to any power conferred by the Order or the Companies Acts or by the company’s articles is a reference to any power conferred by this Act or by the society’s memorandum or rules.
(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
39 (1) Subject to sub-paragraph (3) below, paragraph 17 of Schedule 1 to the Order (powers of administrators) as applied to a building society has effect as if it conferred power to transfer liabilities in respect of deposits with or shares in the society.
(2) No transfer under that paragraph shall be a transfer of engagements for the purposes of Part X of this Act.
(3) No transfer under that paragraph which, apart from sub-paragraph (2) above, would be a transfer of engagements for the purposes of that Part shall be made unless it is approved by the High Court, or by meetings summoned under Article 35(1) or 37(2) of the Order (as modified by paragraph 43 or 45 below).
40 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
41 (1) Article 29 of the Order (general duties of administrator) has effect as if, instead of the requirement imposed by paragraph (3), it required the administrator of a building society to summon a meeting of the society’s creditors if—
(a) he is requested, in accordance with the rules, to do so by 500 of the society’s creditors, or by one-tenth, in number or value, of those creditors, or
(b) he is directed to do so by the High Court.
(2) That Article also has effect as if it required the administrator of a building society to summon a meeting of the society’s shareholding members if—
(a) he is requested, in accordance with the rules, to do so by 500 of the society’s shareholding members, or by one-tenth, in number, of those members, or
(b) he is directed to do so by the High Court.
42 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
43 (1) Paragraph (1) of Article 35 of the Order (statement of proposals) as applied to a building society has effect as if—
(a) the reference to the Financial Conduct Authority included a reference to the scheme manager;
(b) the reference to all creditors included a reference to all holders of shares in the society; and
(c) the reference to a meeting of the society’s creditors included a reference to a meeting of holders of shares in the society.
(2) In paragraph (2) of that Article as so applied, references to members of the society do not include references to holders of shares in the society.
44 Article 36 of the Order (consideration of proposals by creditors’ meeting) as applied to a building society has effect as if any reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.
45 (1) Article 37 of the Order (approval of substantial revisions) as applied to a building society has effect as if—
(a) paragraph (2) required the administrator to send a statement in the prescribed form of his proposed revisions to the FCA, to the PRA and to the scheme manager; and
(b) the reference in that paragraph to a meeting of creditors included a reference to a meeting of holders of shares in the society.
(2) In paragraph (3) of that Article as so applied, references to members of the society do not include references to holders of shares in the society.
46 Paragraph (1) of Article 39 of the Order (protection of interests of creditors and members) has effect—
(a) as if it enabled the FCA, the PRA or the scheme manager to apply to the High Court by petition for an order under that section; and
(b) in relation to an application by the FCA, the PRA or the scheme manager, as if the words “(including at least himself)” were omitted.
Receivers and managers
47 In Article 48 of the Order (receivership accounts), “prescribed” means prescribed by regulations made by statutory instrument by the Treasury.
48 In paragraph (1) of Article 49 of the Order (notification that receiver or manager appointed), the reference to every invoice, order for goods or business letter is a reference to every statement of account, order for goods or services, business letter or advertisement.
49 Paragraph (3) of Article 50 of the Order (payment of debts out of assets subject to floating charge), as applied to a building society, has effect as if the reference to general creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.
50. Articles 52 to 59 of the Order (administrative receivers) are omitted.
51. Article 59A of the Order (floating charge holder not to appoint administrative receiver), as applied to a building society, has effect as if—
(a) in paragraph (1) the word “qualifying” were omitted; and
(b) paragraphs (2), (3)(a), (4) and (5) were omitted.
52. Articles 59B to 59J of the Order (exceptions to prohibition) are omitted.
Protection of supplies
52A Article 197B of the Order (protection of supplies of goods and services) is omitted.
Insolvency practitioners: their qualification and regulation
53. Article 349 of the Order (persons not qualified to act as insolvency practitioners) has effect as if for paragraph (2) there were substituted—
(2) A person is not qualified to act as an insolvency practitioner in relation to a building society at any time unless at that time the person is fully authorised to act as an insolvency practitioner or partially authorised to act as an insolvency practitioner only in relation to companies.
.
54. (1) In the following provisions of the Order, in a reference to authorisation or permission to act as an insolvency practitioner in relation to (or only in relation to) companies the reference to companies has effect without the modification in paragraph 2(1)(a) above—
(a) Articles 349A and 349B(1) and (3) (authorisation of insolvency practitioners); and
(b) Articles 350O(1)(b) and 350R(3)(b) (court sanction of insolvency practitioners in public interest cases).
(2) In Articles 350Q(2)(b) (direct sanctions order: conditions) and 350S(3)(e) (power for Department to obtain information) of the Order the reference to a company has effect without the modification in paragraph 2(1)(a) above.
55. In Articles 350O, 350Q and 350R of the Order a reference to the creditors of a company includes a reference to every shareholding member of the building society to whom a sum due from the society in relation to the member’s shareholding is due in respect of a deposit.
Sections 93, 94 and 95.
Part I Issue of Statements to Members
1 (1) A building society which desires—
(a) to amalgamate with one or more other building societies, or
(b) to transfer its engagements to another building society, or
(c) to undertake to fulfil the engagements of another building society,
shall, unless the appropriate authority , in the case of a society desirous of undertaking to fulfil another’s engagements, has consented under section 94(5) to its proceeding by resolution of the board of directors, send to every member entitled to notice of a meeting of the society a statement concerning the matters specified in sub-paragraph (4) below.
(2) A building society shall include the statement referred to in sub-paragraph (1) above in or with the notice to be sent to its members of the meeting of the society at which the resolutions require for the approval of the amalgamation or, as the case may be, the transfer are to be moved.
(2A) Where a statement is required to be sent to a member in or with the notice of the meeting under sub-paragraph (2)—
(a) in a case where notice of the meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the statement may be sent to him electronically only if it is sent to the same electronic address, and at the same time, as the notice;
(b) in a case where notice of the meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.
(2B) The conditions of this sub-paragraph are satisfied in the case of a statement if—
(a) the society and that member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the statement in question;
(c) at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—
(i) the publication of the statement on a web site,
(ii) the address of that web site,
(iii) the place on that web site where the statement may be accessed, and how it may be accessed; and
(d) the statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the decision of the appropriate authority whether to confirm the amalgamation or transfer of engagements pursuant to section 95.
(2C) Where, in a case in which sub-paragraph (2A)(b) above is relied on for compliance with a requirement under sub-paragraph (2)—
(a) a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
that failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 95(4)(c).
(3) No statement shall be sent unless its contents, so far as they concern the matters specified in sub-paragraph (4) below, have been approved by the appropriate authority .
(4) Those maters are the following, namely—
(a) the financial position of the building society and that of the other building society or societies participating in the amalgamation or transfer;
(b) the interest of the directors of the building society in the amalgamation or transfer of engagements;
(c) the compensation or other consideration (if any) proposed to be paid to or in respect of the directors or other officers of the building society and of the other building society or societies participating in the amalgamation or transfer;
(d) the payments (if any) to be made to members of the building society and of the other building society or societies participating in the amalgamation or transfer by way of a distribution of funds in consideration of the amalgamation or transfer;
(e) the changes (if any) to be made, in connection with the amalgamation or transfer of engagements, in the terms governing outstanding loans made by the building society which are secured on land;
(f) any other matter which the appropriate authority requires in the case of the particular amalgamation or transfer of engagements.
(4A) The PRA must consult the FCA before approving a statement under sub-paragraph (3).
(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6) Any expression used in this paragraph and in section 96 has the same meaning in this paragraph as in that section.
Part II Notification of Proposals for Merger
Preliminary
2 In this Part of this Schedule—
“merger” means an amalgamation of building societies under section 93 or a transfer of all the engagements of one building society to another under section 94; and “merger” has a corresponding meaning;
“merger proposal”, in relation to a building society, means a proposal in writing, by another building society desiring to merge with it, for the societies to merge, with or without terms for the merger; and “proposer” has a corresponding meaning;
“merger resolutions”, in relation to a building society, means the resolutions required for the approval of a merger of the society with another building society under section 93(2) or 94(2);
“merger statement” means a statement containing the requisite particulars of a merger proposal; and
“requisite particulars”, in relation to a merger proposal, means the particulars required by paragraph 3(2) below to be given in a merger statement.
Duty to notify members
3 (1) Subject to sub-paragraph (3) below, it shall be the duty of a building society receiving a merger proposal to send, in accordance with this Part of this Schedule, a merger statement in respect of the proposal to every member entitled to notice of a meeting of the society.
(2) A merger statement must contain the following particulars—
(a) the fact that a merger proposal has been made, and
(b) the identity of the proposer,
with or without other particulars regarding the proposal.
(3) Sub-paragraph (1) above does not require a merger statement to be sent to members if the proposer has requested in writing that the requisite particulars are to be treated as confidential; and, where such a request is made and is at a later date withdrawn in writing, the society receiving the proposal shall, for the purposes of this Part of this Schedule, treat the proposal as having been received on that date instead of any earlier date.
4 (1) A building society shall include in or with every notice of its annual general meeting a merger statement with respect to any merger proposal, other than a proposal of which notice has already been given under this paragraph,—
(a) received by it during the period of 12 months ending with the ninth month of the last financial year of the society before that meeting; or
(b) treated by paragraph 3(3) above as having been received by it during the last three months of that financial year;
and the society may also include, under this sub-paragraph, a merger statement with respect to any proposal received, or treated as received, by it after the end of either period.
(2) In any case where merger resolutions are to be moved at any meeting of a building society, every notice of the meeting shall have included in or with it—
(a) a merger statement with respect to any merger proposal, other than a proposal of which notice has already been given under this paragraph, received by it more than 42 days before the date of the meeting; and
(b) a transfer proposal notification with respect to any transfer proposal so received by it.
(2A) Where a merger statement or a transfer proposal notification is required to be sent to a person in or with the notice of a meeting of the society under sub-paragraph (1) or (2)—
(a) in a case where notice of a meeting is given electronically to a person in accordance with paragraph 22A of Schedule 2, the merger statement or transfer proposal notification may be sent to him electronically only if it is sent to the same electronic address and at the same time as the notice;
(b) in a case where notice of a meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send the statement or notification shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.
(2B) The conditions of this sub-paragraph are satisfied in the case of a merger statement or transfer proposal notification if—
(a) the society and that person have agreed that information that is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the merger statement or transfer proposal notification in question;
(c) at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—
(i) the publication of the merger statement or transfer proposal notification on a web site,
(ii) the address of that web site,
(iii) the place on that web site where that statement or notification may be accessed, and how it may be accessed; and
(d) the statement or notification is published continuously on that web site throughout the period beginning when the person is notified in accordance with paragraph (c) and ending with the conclusion of the meeting.
(2C) Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (1) or (2)—
(a) a statement or notification is published for a part, but not all, of the period mentioned in sub-paragraph (2B)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
that failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 95(4)(c).
(3) In this paragraph and paragraph 5 below—
“transfer proposal” has the same meaning as in Part IA of Schedule 17;
“transfer proposal notification” means a transfer proposal notification (within the meaning of that Part) required to be sent to members by paragraph 5B(1) of that Schedule.
Duty to notify appropriate authority
5 (1) Where a building society sends a merger statement or transfer proposal notification to its members under paragraph 4 above in connection with a meeting of the society, it shall send a copy of the statement or notification to the FCA and, if the society is a PRA-authorised person, the PRA at least 14 days before the date of the meeting.
(2) The FCA must keep the copy of a merger statement or transfer proposal notification received by it from a building society in the public file of that society.
Penalty
6 (1) If default is made by a building society in complying with paragraph 4(1), 4(2) or 5 above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and so shall any officer who is also guilty of the offence.
(2) Where, in a case in which paragraph 4(2A)(b) is relied on for compliance with a requirement under paragraph (a) or (b) of paragraph 4(2)—
(a) a merger statement or transfer proposal notification is published for a part, but not all, of the period mentioned in sub-paragraph (2B)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
no offence is committed under this paragraph by reason of that failure.
Part III Confirmation by appropriate authority : Procedure
7 An application for confirmation by the appropriate authority of an amalgamation or transfer of engagements shall be made in such manner as the appropriate authority may direct.
8 (1) Where a building society applies to the appropriate authority for confirmation of an amalgamation or transfer or engagements, the society shall publish notice of the application in any one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the appropriate authority directs and, if it so directs, in one or more newspapers.
(2) A notice published in pursuance of sub-paragraph (1) above shall—
(a) state that any interested party has the right to make representations to the appropriate authority with respect to the application; and
(b) specify a date determined by the appropriate authority before which any written representations or notice of a person’s intention to make oral representations must be received by the Commission; and
(c) specify a date determined by the appropriate authority as the day on which it intends to hear any oral representations.
9 (1) After the date specified in pursuance of paragraph 8(2)(b) above, the appropriate authority shall—
(a) determine the time and place at which oral representations may be made;
(b) give notice of that determination to the building societies participating in the amalgamation or transfer and any persons who have given notice of their intention to make oral representations; and
(c) send copies of the written representations received by the appropriate authority to the building societies participating in the amalgamation or transfer.
(2) The appropriate authority shall allow any building society participating in the amalgamation or transfer an opportunity to comment on the written representations, whether at a hearing or in writing before the expiration of such period as the appropriate authority specifies in a notice to the society.
SCHEDULE 17 Transfers of Business: Supplementary Provisions
Section 97 and 98.
PART I Issue of statement or summary to members
Preliminary
1 In this Part of this Schedule—
“prescribed matters” in relation to any transfer of the business of a building society to its successor, means the matters relating to the transfer, the society, its officers, members or depositors, or the successor, which are prescribed in regulations made under paragraph 5(1) below;
“transfer statement”, in relation to a transfer of business by a building society, means the statement with respect to the transfer which may be sent or handed to members of the society under paragraph 2 below;
“transfer summary”, in relation to a transfer of business by a building society, means the summary of the transfer statement which may be sent to members of the society under that paragraph.
Duty to send transfer statements or summaries to members
2 A building society which desires to transfer its business shall, in accordance with this Part of this Schedule, send a transfer statement, or a transfer summary, to every member entitled to notice of a meeting of the society.
3 (1) A transfer statement, in relation to a transfer of business by a building society, shall contain—
(a) the particulars required, in relation to the prescribed matters, by the regulations made under paragraph 5(1) below, and
(b) particulars of any other matters required by the appropriate authority in the case of the particular transfer,
with or without other particulars regarding the transfer.
(2) A transfer summary, in relation to a transfer of business by a building society, shall contain—
(a) the information required by the regulations made under paragraph 5(2) below, and
(b) any other information required by the appropriate authority in the case of the particular transfer,
with or without other particulars regarding the transfer.
4 (1) Subject to sub-paragraph (3) below, a building society shall, in relation to a transfer of business, include a transfer statement, or a transfer summary, in or with the notice to be sent to its members of the meeting of the society at which the requisite transfer resolutions are to be moved.
(1A) Where a transfer statement or transfer summary is required under sub-paragraph (1) to be sent to a member in or with the notice of the meeting of the society at which the requisite transfer resolutions are to be moved—
(a) in a case where notice of that meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the transfer statement or transfer summary may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice;
(b) in a case where notice of that meeting is given on a web site in accordance with paragraph 22B of Schedule 2, the requirement to send the statement or summary to that member shall also be treated as satisfied if the conditions set out in sub-paragraph (1B) are satisfied.
(1B) The conditions of this sub-paragraph are satisfied in the case of a transfer statement or transfer summary if—
(a) the society and that member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the statement or summary in question;
(c) at the same time and in the same manner as the society notifies that member of the publication of the notice of the meeting, it notifies him of—
(i) the publication of the statement or summary on a web site,
(ii) the address of that web site,
(iii) the place on that web site where that statement or summary may be accessed, and how it may be accessed; and
(d) the statement or summary is published continuously on that web site throughout the period beginning when the member is notified in accordance with paragraph (a) and ending with the decision of the appropriate authority whether to confirm the transfer pursuant to section 98.
(1C) Where, in a case in which sub-paragraph (1A)(b) is relied on for compliance with a requirement under sub-paragraph (1)—
(a) a statement is published for a part, but not all, of the period mentioned in subparagraph (1B)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
the failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (1B) from being treated as fulfilled in relation to section 98.
(2) Subject to sub-paragraph (3) below, where a building society sends a transfer summary, a transfer statement—
(a) shall be handed forthwith and free of charge to any member to whom the summary was sent who asks for such a statement at an office or branch of the society; and
(b) shall be sent forthwith and free of charge to any such member who asks for such a statement otherwise than at such an office or branch.
(2A) Where a transfer statement is required to be sent to a member under sub-paragraph (2)(b)—
(a) it may be sent to him electronically only if it is sent to an electronic address notified by him to the society for the purpose;
(b) the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (2B) are satisfied.
(2B) The conditions of this sub-paragraph are satisfied in the case of a transfer statement if—
(a) the society and that member have agreed information which is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the transfer statement in question;
(c) the society notifies the member forthwith, on receiving a request from him for such a statement, of—
(i) the publication of the statement on a web site,
(ii) the address of that web site,
(iii) the place on that web site where the statement may be accessed and how it may be accessed; and
(d) that statement is published continuously on that web site for the period beginning with the giving of that notification and ending with the decision of the appropriate authority whether to confirm the transfer pursuant to section 98.
(2C) Where, in a case in which sub-paragraph (2A)(b) is relied on for compliance with a requirement under sub-paragraph (2)(b)—
(a) a statement is published for a part, but not all, of the period mentioned in subparagraph (2B)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
the failure shall not invalidate the proceedings of a meeting or prevent the requirements of sub-paragraph (2B) from being treated as fulfilled in relation to section 98.
(3) No transfer statement shall be sent or handed to a member unless its contents, so far as they concern the prescribed matters or any matter of which particulars are required to be given under paragraph 3(1)(b) above, have been approved by the appropriate authority .
(4) The PRA must consult the FCA before approving a statement under sub-paragraph (3).
5 (1) The Treasury, may make regulations for the purpose of specifying, as prescribed matters, the matters of which transfer statements are to give particulars; and the regulations may also require particulars to be given of any alternatives to the particular transfer which were available to the society making the transfer.
(2) The Treasury, may make regulations for the purpose of specifying the information which transfer summaries are to give.
(3) Any power to make regulations under this paragraph is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
PART IA Notification of proposals for transfers of business
Preliminary
5A In this Part of this Schedule—
“requisite particulars”, in relation to a transfer proposal, means the particulars required by paragraph 5B(2) below to be given in a transfer proposal notification;
“transfer”, in relation to a building society, means a transfer of the whole of its business to a company under section 97;
“transfer proposal”, in relation to a building society, means a proposal in writing by a company for a transfer by the society to the company, with or without terms for the transfer; and “proposer” has a corresponding meaning;
“transfer proposal notification” means a notification containing the requisite particulars of a transfer proposal;
“transfer resolutions”, in relation to a building society, means the resolutions required for the approval of a transfer by the society under section 97.
Duty to notify members
5B (1) Subject to sub-paragraph (3) below, it shall be the duty of a building society receiving a transfer proposal to send, in accordance with this Part of this Schedule, a transfer proposal notification in respect of the proposal to every member entitled to notice of a meeting of the society.
(2) A transfer proposal notification must contain the following particulars—
(a) the fact that a transfer proposal has been made, and
(b) the identity of the proposer;
with or without other particulars regarding the proposal.
(3) Sub-paragraph (1) above does not require a transfer proposal notification to be sent to members if the proposer has requested in writing that the requisite particulars are to be treated as confidential; and, where such a request is made and is at a later date withdrawn in writing, the society receiving the proposal shall, for the purposes of this Part of this Schedule, treat the proposal as having been received on that date instead of any earlier date.
5C (1) A building society shall include in or with every notice of its annual general meeting a transfer proposal notification with respect to any transfer proposal, other than a proposal of which notice has already been given under this paragraph—
(a) received by it during the period of 12 months ending with the ninth month of the last financial year of the society before that meeting; or
(b) treated by paragraph 5B(3) above as having been received by it during the last three months of that financial year;
and the society may also include, under this paragraph, a transfer proposal notification with respect to any proposal received, or treated as received, by it after the end of either period.
(2) Where a transfer proposal notification is required under sub-paragraph (1) to be sent to a member in or with the notice of an annual general meeting of the society—
(a) in a case where notice of that meeting is given to that member electronically in accordance with paragraph 22A of Schedule 2, the transfer proposal notification may be sent to him electronically only if it is sent to the same electronic address, and at the same time as the notice.
(b) in a case where notice of that meeting is given on a website in accordance with paragraph 22B of Schedule 2, the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (3) are satisfied.
(3) The conditions of this sub-paragraph are satisfied in the case of a transfer proposal notification if—
(a) the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;
(b) the agreement applies to the transfer proposal notification in question;
(c) at the same time and in the same manner as the society notifies that person of the publication of the notice of the meeting, it notifies him of—
(i) the publication of the transfer proposal notification on a web site,
(ii) the address of that web site,
(iii) the place on that web site where that notification may be accessed, and how it may be accessed; and
(d) the notification is published continuously on that web site throughout the period beginning when the person is notified in accordance with paragraph (c) and ending with the conclusion of the meeting.
(4) Where, in a case in which sub-paragraph (2)(b) is relied on for compliance with a requirement under sub-paragraph (1)—
(a) a statement is published for a part, but not all, of the period mentioned in subparagraph (3)(d), but
(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,
the failure shall not invalidate the proceedings of a meeting.
Duty to notify appropriate authority
5D (1) Where a building society sends a transfer proposal notification to its members under paragraph 5C above in connection with a meeting of the society, it shall send a copy of the notification to the FCA and, if the society is a PRA-authorised person, the PRA at least 14 days before the date of the meeting.
(2) The FCA must keep the copy of a transfer proposal notification received by it from a building society in the public file of that society.
Penalty
5E (1) If default is made by a building society in complying with paragraph 5C or 5D above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale; and so shall any officer who is also guilty of the offence.
(2) But no offence is committed under this paragraph, in a case in which paragraph 5C(2)(b) is relied on for compliance with a requirement under paragraph 5C(1), where—
(a) a transfer proposal notification is published for a part, but not all, of the period mentioned in paragraph 5C(3)(d); and
(b) the failure to publish that notification throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid.
Part II Confirmation by appropriate authority : Procedure
6 An application by a building society for confirmation by the appropriate authority of a transfer of its business tschedule 16o a company shall be made in such manner as the appropriate authority may direct.
7 (1) Where a building society applies for confirmation of a transfer of its business, the society shall publish a notice of the application in any one or more of the London Gazette, the Edinburgh Gazette or the Belfast Gazette, as the appropriate authority directs and, if it so directs, in one or more newspapers.
(2) A notice published in pursuance of sub-paragraph (1) above shall—
(a) state that any interested party has the right to make representations to the appropriate authority with respect to the application;
(b) specify a date determined by the appropriate authority before which any written representations or notice of a person’s intention to make oral representations must be received by the appropriate authority; and
(c) specify a date determined by the appropriate authority as the day on which it intends to hear any oral representations.
8 (1) After the date specified in the notice in pursuance of paragraph 7(2)(b) above, the Commission shall—
(a) determine the time and place at which oral representations may be made;
(b) give notice of that determination to the building society making the transfer and any persons who have given notice of their intention to make oral representations; and
(c) send copies of the written representations received by the Commission to the building society making the transfer.
(2) The Commission shall allow the building society making the transfer an opportunity to comment on the written representations, whether at a hearing or in writing, before the expiration of such period as the Commission specifies in a notice to the society.
Section 120.
Part I United Kingdom
Bankers’ Books Evidence Act 1879 (c.11)
1 In section 9(1) of the Bankers’ Books Evidence Act 1879 (meaning of “bank” and “banker” for purposes of that Act), after paragraph (a) there shall be inserted the following—
(aa) a building society (within the meaning of the Building Societies Act 1986);
.
Land Registration Act 1925 (c.21)
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Payment of Wages Act 1960 (c. 37)
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Trustee Investments Act 1961 (c. 62)
4 (1) This paragraph amends the Trustee Investments Act 1961 as follows.
(2) In Part II of Schedule 1 (narrower range investments requiring advice), for paragraph 12 there shall be substituted—
12 In deposits with a building society within the meaning of the Building Societies Act 1986.
.
(3) In Part III of Schedule 1 (wider range investments), for paragraph 2 there shall be substituted—
2 In shares in a building society within the meaning of the Building Societies Act 1986.
.
Stock Transfer Act 1963 (c.18)
5 In section 1(4) of the Stock Transfer Act 1963 (simplified transfer of certain securities, not to apply to building society securities), for “1962” there shall be substituted “ 1986 ”.
Industrial and Provident Societies Act 1965 (c.12)
6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income and Corporation Taxes Act 1970 (c.10)
7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Banking and Financial Dealings Act 1971 (c.80)
8 (1) This paragraph amends the Banking and Financial Dealings Act 1971 as follows.
(2) In section 2(1) (power to suspend financial dealings on bank holidays) after paragraph (g) there shall be inserted—
; and
(h) a direction that, subject as aforesaid, no building society shall, on that day, except with permission so granted, effect in the course of its business any transaction or, according as may be specified in the order, a transaction of such kind as may be so specified.
(3) In section 2(6) after the definition of “authorised dealer in gold” there shall be inserted—
“building society” means a building society within the meaning of the Building Societies Act 1986.
.
Local Government Act 1972 (c.70)
9 In Schedule 12A (access to information: exempt information) to the Local Government Act 1972—
(a) in Part II, in paragraph 2(d) for “1962” there shall be substituted “ 1986 ”; and
(b) in Part III, in paragraph 1(1), after the definition of "protected informant’ there shall be inserted the following definition—
“registered”, in relation to information required to be registered under the Building Societies Act 1986, means recorded in the public file of any building society (within the meaning of that Act);
.
Consumer Credit Act 1974 (c. 39)
10 (1) This paragraph amends the Consumer Credit Act 1974 as follows.
(2) In section 16(1) (consumer credit agreement with certain bodies exempt from regulation) the words “or building society” shall be omitted and, after paragraph (f), there shall be inserted the words
, or
(g) a building society.
.
(3) In section 16(3) (Secretary of State’s duty to consult before making orders), after paragraph (d) there shall be inserted the words
or
(e) under subsection (1)(g) without consulting the Building Societies Commission and the Treasury.
.
(4) In section 189(1) (definitions), for the definition of “building society” there shall be substituted the following definition—
“building society” means a building society within the meaning of the Building Societies Act 1986;
.
Solicitors Act 1974 (c.47)
11 (1) This paragraph amends the Solicitors Act 1974 as follows.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(4) In section 85 (bank accounts)—
(a) after “account with a bank” there shall be inserted “ or a building society ”, and
(b) in paragraphs (a) and (b) after “bank” there shall be inserted “ or society ”.
(5) In section 87(1) (interpretation), after the definition of “bank” there shall be inserted—
“building society” means a building society within the meaning of the Building Societies Act 1986; and a reference to an account with a building society is a reference to a deposit account.
.
Home Purchase Assistance and Housing Corporation Guarantee Act 1978 (c.27)
12 In section 3(1) (building society law) of the Home Purchase Assistance and Housing Corporation Guarantee Act 1978, after “determining” there shall be added the word “ (a) ” and at the end of that subsection there shall be added the words—
(b) the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.
.
Banking Act 1979 (c.37)
13 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Charging Orders Act 1979 (c.53)
14 In section 6(1) (interpretation) of the Charging Orders Act 1979, in the definition of “building society”, for “1962” there shall be substituted “ 1986 ”.
Finance Act 1982 (c.39)
15 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Companies Act 1985 (c.6)
16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Insolvency Act 1985 (c.65)
17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Housing Act 1985 (c. 68)
18 (1) This paragraph amends the Housing Act 1985 as follows.
(2) In section 442(5) (consultations by Secretary of State regarding forms of local authority indemnity agreement) for “Chief Registrar of Friendly Societies" in paragraph (a), there shall be substituted “Building Societies Commission".
(3) In section 447 (recognised lending institutions) and in section 448 (recognised savings institutions) for “designated building societies" there shall be substituted “building societies".
(4) For section 450 (modifications of building society law) there shall be substituted the following section—
Modifications of building society law.
450 So much of an advance by a building society which is partly financed under section 445 (assistance for first-time buyers) or the corresponding Scottish or Northern Ireland provisions as is so financed shall be treated as not forming part of the advance for the purpose of determining—
(a) whether the advance, or any further advance made within two years of the date of purchase, is beyond the powers of the society, and
(b) the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.
.
(5) In section 622 (minor definitions) for the definition of “building society" there shall be substituted—
“building society” means a building society within the meaning of the Building Societies Act 1986
.
Housing Associations Act 1985 (c.69)
19 (1) This paragraph amends the Housing Associations Act 1985 as follows.
(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(3) In section 84(5) and 86(4) (consultation by Secretary of State regarding building society indemnities) for “Chief Registrar of Friendly Societies” there shall be substituted “ Building Societies Commission ”.
(4) In section 101 (minor definitions), for the definition of “building society” there shall be substituted—
“building society” means a building society within the meaning of the Building Societies Act 1986;
.
Part II Northern Ireland
Industrial and Provident Societies Act (Northern Ireland)1969 (c.24 N.I.)
20 In section 31(b) of the Industrial and Provident Societies Act (Northern Ireland) 1969 (authorised investments) for “society registered under the Building Societies Act” there shall be substituted “ building society within the meaning of the Building Societies Act 1986. ”.
Payment of Wages Act (Northern Ireland 1970
21 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Private Streets (Northern Ireland) Order 1980 (S.I. 1980/1086 (N.I.12))
22 In Article 33 (security not to be deemed prior mortgage under Building Societies Acts) of the Private Streets (Northern Ireland) Order 1980 for the words from “section 32” where they first occur onwards there shall be substituted “ section 11(2)(d) or (4)(d) of the Building Societies Act 1986 ”.
Housing (Northern Ireland) Order 1981 (S.I. 1981/156 (N.I.3))
23 (1) This paragraph amends the Housing (Northern Ireland) Order 1981 as follows.
(2) In Article 2(2) (interpretation) after the definition of “building regulations” there shall be inserted—
“building society” means a building society within the meaning of the Building Societies Act 1986
.
(3) For Article 155 (building society law) there shall be substituted the following section—
Modifications of building society law.
155 So much of an advance by a building society which is partly financed under this Part or sections 445 to 449 of the Housing Act 1985 or the Home Purchase Assistance and Housing Corporation Guarantee Act 1978 as is so financed shall be treated as not forming part of the advance for the purpose of determining—
(a) whether the advance, or any further advance made within two years of the date of purchase, is beyond the powers of the society, and
(b) the classification of the advance, or any such further advance, for the purposes of Part III of the Building Societies Act 1986.
.
(4) In Article 155A (exclusion of Restrictive Trade Practices Act 1976), after “Scottish Provisions” there shall be inserted “ (namely, sections 445 to 447 of the Housing Act 1985 or the Home Purchase Assistance and Housing Corporation Guarantee Act 1978) ”.
(5) In Article 156(5)(b) (consultations by the Department regarding forms of indemnity agreements) for “Registrar of Friendly Societies for Northern Ireland” there shall be substituted “ Building Societies Commission ”.
(6) For paragraph 1 of Schedule 10 there shall be substituted—
1 Building Societies.
.
Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983 (S.I. 1983/766 (N.I.9))
24 In Article 3(10) of the Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983, after “applies” in the definition of “mortgage” there shall be inserted “ and, subject to paragraph 2(7) of Schedule 4 to the Building Societies Act 1986, does not include a mortgage to which that paragraph 2 applies. ”.
Housing (Northern Ireland) Order 1983 (S.I. 1983/1118 (N.I.15))
25 In Article 3(4) of the Housing (Northern Ireland) Order 1983, in the definition of “building society” for the words from “1962” onwards there shall be substituted “ 1986 ”.
Companies (Northern Ireland) Order 1986
26 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Section 120.
Part I Repeals: General
Chapter | Short title | Extent of repeal
37 & 38 Vict. c. 42. | The Building Societies Act 1874. | Section 1.
Section 4.
Section 32.
57 & 58 Vict. c. 47. | The Building Societies Act 1894. | Section 8(1).
Section 29.
8 & 9 Eliz. 2 c. 64. | The Building Societies Act 1960. | Section 72.
Section 73(1).
Section 77.
In Schedule 5, the entry relating to paragraph 4 of section 32 of the Building Societies Act 1874.
9 & 10 Eliz. 2 c. 62. | The Trustee Investments Act 1961. | In Part IV of Schedule 1, paragraphs 3A and 7.
10 & 11 Eliz. 2 c. 37. | The Building Societies Act 1962.
The whole Act.
1965 c. 32. | The Administration of Estates (Small Payments) Act 1965. | In Schedules 1 and 3, the entries relating to the Building Societies Act 1962.
69 c. 46. | The Family Law Reform Act 1969. | In Schedule 1, the entry relating to the Building Societies Act 1962.
1970 c. 10. | The Income and Corporation Taxes Act 1970. | In section 343(5), the words “union or”.
1974 c. 39. | The Consumer Credit Act 1974. | In section 16, in subsection (1) the words “or building society,” and, in subsections (1)(e) and (3)(c), the word “or”.
1974 c. 46. | The Friendly Societies Act 1974. | In Schedule 10, paragraph 9.
1974 c. 47. | The Solicitors Act 1974. | In section 32, in subsections (1) and (2), the word “banks”.
1974 c. 49. | The Insurance Companies Act 1974.In Schedule 1, the entries relating to | the Building Societies Act 1962.
1978 c. 27. | The Home Purchase Assistance and Housing Corporation Guarantee Act 1978. | In section 3, subsections (2) to (4).
1979 c. 37. | The Banking Act 1979. | In paragraph 6 of Schedule 1, the words from “within” to the end.
In Schedule 6, paragraphs 6, 7, 16, and 17.
1982 c. 50. | The Insurance Companies Act 1982. | In Schedule 5, paragraphs 3 and 5.
1984 c. 28. | The County Courts Act 1984. | In Schedule 2, paragraph 26.
1985 c. 9. | The Companies Consolidation (Consequential Provisions) Act 1985. | In Schedule 2, the entries relating to the Building Societies Act 1962.
1985 c. 58. | The Trustee Savings Banks Act 1985. | In Schedule 1, paragraph 11(2)(a) and so much of that sub-paragraph as relates to the section 59 specified therein.
1985 c. 61. | The Administration of Justice Act 1985. | Section 66.
1985 c. 68. | The Housing Act 1985. | In section 458, the definition of “designated building society”.
In section 459, the entry relating to “designated buildings society”.
1985 c. 69. | The Housing Associations Act 1985. | Sections 63 to 66.
In Section 72, the definitions of “building society”, “Chief Registrar” and “officer”.
In section 73, the entries relating to “building society”, “Chief registrar” and “officer”.
1985 c. 71. | The Housing (Consequential Provisions) Act 1985. | In Schedule 2, paragraphs 5 and 6.
Part II Revocation Extending to Great Britain
Number | Title | Extent of revocation
S.I. 1981/1488. | The Building Societies (Authorisation) Regulations 1981. | The whole Regulations.
PART III Repeals and Revocations Extending Only to Northern Ireland
Chapter or number | Short title | Extent of repeal or revocation
1967 c. 5 (N.I.). | The Administration of Estates (Small Payments) Act (Northern Ireland) 1967. | In Schedule 1, the entry relating to the Building Societies Act 1874.
1967 c. 31 (N.I.). | The Building Societies Act (Northern Ireland) 1967. | The whole Act.
1969 c. 24 (N.I.). | The Industrial and Provident Societies Act (Northern Ireland) 1969. | In section 101(1), the definition of “Building Societies Acts”.
1969 c. 28 (N.I.). | The Age of Majority Act (Northern Ireland) 1969 | In Schedule 1, the entry relating to the Building Societies Act (Northern Ireland) 1967.
1969 c. 31 (N.I.). | The Age of Majority Act (Northern Ireland) 1969. | In Part I of Schedule 1, the entry relating to the Building Societies Act (Northern Ireland) 1967.
1970 c. 18 (N.I.). | The Land Registration Act (Northern Ireland) 1970. | In Schedule 12 the entry relating to the Building Societies Act (Northern Ireland) 1967.
1978 c. 23. | The Judicature (Northern Ireland) Act 1978. | In Schedule 5, in Part II the entry relating to the Building Societies Act (Northern Ireland) 1967.
S.I. 1979/1573 (N.I.12). | The Statutory Rules (Northern Ireland) Order 1979. | In Schedule 4 the entry relating to the Building Societies Act (Northern Ireland) 1967.
1980 c. 25. | The Insurance Companies Act 1980. | In Schedule 3, paragraph 3.
S.I. 1981/156 (N.I.3). | The Housing (Northern Ireland) Order 1981. | Article 156(6).
In Part II of Schedule 2, the entry relating to the Building Societies Act (Northern Ireland) 1967.
S.R. 1982/155 (N.I.). | The Building Societies (Authorisation) Regulations (Northern Ireland) 1982. | The whole Regulations.
S.I. 1983/776 (N.I.9). | The Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983. | In Article 3(10), in the definition of “mortgage” the words “section 37 of the Building Societies Act (Northern Ireland) 1967”.
S.I. 1983/1118 (N.I.15). | The Housing (Northern Ireland) Order 1983. | In Schedule 10, the entry relating to the Building Societies Act (Northern Ireland) 1967.
1985 c. 71. | The Housing (Consequential Provisions) Act 1985. | In Schedule 2, paragraphs 13, 51(2) and 51(5)(a).
S.I. 1986/1035 (N.I.9). | The Companies Consolidation (Consequential Provisions) (Northern Ireland) Order 1986. | In Part I of Schedule 1, the entry relating to the Building Societies Act (Northern Ireland) 1967.
Section 120.
Preliminary
1 In this Schedule—
“the commencement date for” any provision of this Act means the date on which that provision comes into operation;
“existing society” means a building society registered at the passing of this Act under the repealed enactments; and
“existing rules” means the rules of a society in force immediately before the commencement date for section 5.
Adoption of powers and alteration of rules
2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Default powers
4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Registration with existing authorities
5 A building society which, at the commencement date for section 5, was registered under the Building Societies Act (Northern Ireland) 1967 or registered or deemed to be registered in Northern Ireland under the enactments repealed by that Act shall be treated, for the purposes of this Act, as registered with the central office immediately before the commencement of that section.
Authorisation under existing enactments
6 (1) A building society which, at the commencement date for section 9 is authorised to raise money and accept deposits under—
(a) the Building Societies (Authorisation) Regulations 1981, or
(b) the Building Societies (Authorisation) Regulations (Northern Ireland) 1982,
shall be treated, whether or not the requirements of subsection (4) of section 9 would be fulfilled in its case, at the commencement of that section as authorised for the purposes of this Act (in particular Part VI).
(2) The central office shall record in the public file of each building society to which sub-paragraph (1) above applies the fact that, by virtue of that sub-paragraph, the society is to be treated as authorised for the purposes of this Act.
Anticipation of powers: declaratory provision
7 (1) It is hereby declared that every building society has had, as from 19th December 1985, power, for the purposes of any power conferred by this Act on building societies or building societies of its description, to do such things, subject to sub-paragraph (2) below, as are reasonably necessary to enable it—
(a) to decide whether or not, and to what extent, to exercise (and in the case of an adoptable power to adopt) the power, and
(b) if it decides to exercise the power, to exercise it as from the date when it becomes exercisable by the society.
(2) Sub-paragraph (1)(b) above does not authorise a society—
(a) to make contracts, other than conditional contracts, for the acquisition of land, the acquisition of a business or the acquisition of shares in any company if that company offers the public any service or facility within the power,
(b) to issue invitations to members of the society or the public to apply for any power to be exercised for their benefit, or
(c) to retain shares in a company which offers the public any service or facility within the power;
and, in this sub-paragraph, “conditional”, in relation to contracts with respect to the exercise of a power, means conditional on the power’s becoming exercisable by the society.
(3) The power conferred by this paragraph, and activities carried on under it, for the purposes of an adoptable power are not to be treated as included in, or in activities comprised in, that adoptable power for the purposes of paragaph 8 of this Schedule.
Unlawful anticipation of powers
8 (1) Where a building society adopts any adoptable power under paragraph 2 or 3 above—
(a) it shall, by virtue of this paragraph, assume an obligation, enforceable as provided in pararaph 9 below, not to exercise that power until the date on which the memorandum of its powers takes effect as respects that power, and
(b) it shall send to the central office, with the documents required by paragraph 2(1) or 3(1) above a declaration as respects that power made on behalf of the society which satisfies the requirements of this paragraph.
(2) The obligation assumed by virtue of this paragraph on the adoption of a power does not extend to the exercise of any power included in the adoptable power which the society has under the law in force at any time before the registration takes effect.
(3) A declaration, to satisfy the requirements of this paragraph, must be made by the chairman of the board of directors of the society, by one other director and by the chief executive of the society and it must either—
(a) state that, to the best of the knowledge and belief of the declarants, after due enquiry, the society has not, or has not with the permitted qualification, carried on any activity comprised in the power during the period which began one year before the specified date (or with 1 April 1986, if later) and expired with the date of the meeting at which the power was adopted, or
(b) state that, to the best of the knowledge and belief of the declarants, after due enquiry, the society, with specified exceptions, has not, or has not with the permitted qualification, carried on any activity comprised in the power during the period which began one year before the specified date (or with 1 April 1986, if later) and expired with the date of the meeting at which the power was adopted.
(4) The qualification of the statement so required which is permitted is that in so far as the society has, at any time during the said period, carried on any activity comprised in the power to which the statement relates, the society had the power to carry on that activity at that time under the law in force at that time.
(5) The exceptions to the statement so required must not include activities of the society which constitute significant excesses of its powers during the said period; and a declaration specifying activities as exceptions to the statement so required must also state the opinion of the declarants that the activities are believed not to constitute significant excesses of the society’s powers during the period to which the declaration relates.
Penalty for breach of undertaking
9 If, in breach of the obligation assumed by virtue of paragraph 8 above, a building society exercises any power to which the obligation extends, then—
(a) the society shall be liable on conviction on indictment or on summary conviction to a fine not exceeding, on summary conviction, the statutory maximum, and
(b) every officer of the society who is also guilty of the offence shall be liable, on summary conviction to a fine not exceeding the statutory maximum.
Penalty for false declaration
10 If the statement in a declaration made for the purposes of paragraph 8 above is false, then, any person who made the statement knowing it to be false or reckless as to whether it was true or false shall be liable—
(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both, and
(b) on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding the statutory maximum or both.
Powers of central office
11 (1) The central office, on receiving from a building society the declaration required by and the other documents referred to in paragraph 8 above, shall refer to the Commission for its determination the questi on whether or not the memorandum of the society’s powers is to be registered.
(2) On a reference to the Commission of the question whether or not the memorandum of a society’s power is to be registered—
(a) if the declaration contains the statement specified in paragraph 8(3)(a) above and the Commission has no reasonable cause to believe that the society in question has carried on any activity comprised in the power to which the obligation imposed by paragraph 8 above extends at any time during the period which begin one year before the specified date (or with 1st April 1986, if later) and expired on the date on which it considers the reference, the Commission shall direct the central office to register the memorandum, and
(b) in any other case, the Commission may, as it thinks fit, direct the central office to register, or not to register, the memorandum.
(3) The Commission, in deciding, in a case falling within sub-paragraph (2)(b) above, whether or not to direct the registration of the memorandum of a society’s powers may have regard to all the circumstances of the case.
(4) No registration of a memorandum shall be effected by the central office under paragraph 2(2) or 3(2) above before the expiry of the period of 21 days beginning with the date on which it receives the declaration required by and the other documents referred to in paragraph 8 above.
(5) If the central office, in pursuance of a direction of the Commission under sub-paragraph (2) above, refuses registration of the memorandum of a society’s powers under sub-paragraph (1) above it shall serve on the society a notice—
(a) recording its refusal,
(b) specifying the activity which is believed to constitute a breach of the society’s obligation, and
(c) directing the society to make an application to the Commission under section 38 for a determination under that section whether the activity was or was not within the powers of the society at the time specified under sub-paragraph (b) above,
and shall send a copy of the notice to the Commission.
(6) The central office shall comply with any direction as regards the registration of the memorandum of the society’s powers given to it by the Commission consequent on the Commission’s determination of the society’s powers under section 38.
(7) Nothing in the foregoing provisions of this Schedule implies that it is improper for any of the following, that is to say—
(a) the Chief Registrar or any assistant registrar of the central office,
(b) the assistant registrar of friendly societies for Scotland,
(c) the registrar of building societies for Northern Ireland, or
(d) the Commission,
to give to a building society or building societies generally an indication of the action the Commission might or might not take in exercising its functions under this paragraph; and no decision of the Commission under this paragraph shall be liable to be set aside by reason of the indication having been given.
(8) In this paragraph “the specified date” has the same meaning as in paragraph 2 or, as the case may be, 3 above.
Permissible securities for advances
12 (1) Until provision is made by an order under section 10(6) prescribing the descriptions of equitable interests in land which may be taken as security for advances secured on land, building societies may advance money on the security of an equitable interest in land in England and Wales or Northern Ireland in addition to a mortgage of the freehold or leasehold estate where the lease or a related instrument includes provision entitling the leaseholder to acquire a beneficial interest of any extent in the freehold or a greater leasehold interest and the right to acquire that interest is assigned as additional security.
(2) Until such provision is made, section 17(10) shall have effect with the substitution of a reference to an equitable interest of the description specified in sub-paragraph (1) above for the reference to an equitable interest specified in an order under section 10(6).
(3) On the making of the first order under section 10(6) this paragraph shall cease to have effect.
13 Until provision is made by an order under section 12(3) prescribing indemnities given by a local authority as a description of additional security for the purposes of section 11(4)(c), an indemnity given under section 442 of the Housing Act 1985, under section 31 of the Tenants’ Rights, Etc. (Scotland) Act 1980 or under Article 156 of the Housing (Northern Ireland) Order 1981 shall be such a security; and on the making of the first order under section 12(3) this paragraph shall cease to have effect.
Existing business names
14 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Directors in office
15 (1) Except as provided in this paragraph, an existing director shall be treated for the purposes of sections 60 and 61 as having been duly elected a director on the date of his appointment as a director or, as the case may be, of his most recent re-appointment to that office before the commencement date.
(2) An existing director who holds office as director by virtue of holding some other position in the society shall, except in a case within sub-paragraph (4) below, be treated for the purposes of sections 60 and 61 as having been duly elected a director at the commencement date.
(3) If the term of office of an existing director would, in accordance with the terms on which he holds office, expire on an earlier date than is provided for by sub-paragraph (1) above, he shall vacate office on that earlier date.
(4) An existing director who has attained the normal retirement age, or the compulsory retirement age (if any), as the case may be, before the commencement date shall retire from office at the first annual general meeting of the society after the commencement date.
(5) If, at the commencement date, an existing director, other than a director falling within sub-paragraph (2) above, has held office since the date of his appointment or most recent re-appointment for a period longer than is provided for in section 60(11)(a), he shall retire from office at the first annual general meeting of the society after the commencement date.
(6) In this paragraph—
“the commencement date” means the commencement date for sections 60 and 61;
“existing director” means any director of a building society in office immediately before the commencement date; and
“the compulsory retirement age” and “the normal retirement age” have the meanings given in section 60(8).
Existing financial years
16 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Qualifying assets
17 For the purposes of the application of section 118 by reference to the annual accounts of a building society prepared before the first financial year for which accounts under Part VIII of this Act are prepared, the reference to the total commercial assets of a society shall have effect as a reference to the amount in the last balance sheet prepared under the Building Societies Act 1962 which represents the total assets constituted by mortgage debts outstanding to the society.
Provision of conveyancing services for building societies
18 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .