Building Societies Act 1997 (c. 32)

(The document as of February, 2008)

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(a) after the words "other than" there shall be inserted the words "a shareholding members' resolution or"; and

(b) for the words "100 words" there shall be substituted the words "500 words".

(14) In sub-paragraph (1) of paragraph 33 (postal ballots), after the words "resolution of the society", in the first place where they occur, there shall be inserted the words "(other than a shareholding members' resolution or a borrowing members' resolution)".

(15) For sub-paragraph (5) of that paragraph there shall be substituted the following sub-paragraph--

" (5) Notice of the postal ballot shall, subject to those provisions, be given also to every person--

(a) who becomes a shareholding or borrowing member of the society after the date of the notice under sub-paragraph (4) above and before the voting day; or

(b) who, being such a member at the date of that notice, attains the age of 18 after that date and on or before the voting day,

and who would (in either case) be eligible to vote in the election or on the resolution if he remained such a member until that day. "

(16) For sub-paragraph (2) of paragraph 34 (declarations to be made in proxy and ballot forms) there shall be substituted the following sub-paragraph--

" (2) A person making a declaration in pursuance of sub-paragraph (1) above shall--

(a) declare that he has attained the age of 18 years or will have attained that age on or before the voting date or, where he is voting by proxy, on or before the date of the meeting;

(b) where the vote is to be cast on a shareholding members' resolution, declare--

(i) that on the voting date he is or, so far as he can reasonably foresee, will be a shareholder of the society; and

(ii) where the person is not entitled to vote unless he had a qualifying shareholding on the qualifying shareholding date, that he had or, so far as he can reasonably foresee, will have such a shareholding on that date;

(c) where the vote is to be cast on a borrowing members' resolution, declare that on the voting date he is or, so far as he can reasonably foresee, will be a borrowing member of the society; and

(d) where the vote is to be cast on an ordinary or special resolution, declare either as mentioned in paragraph (b) above, or as mentioned in paragraph (c) above, or both. "

The Building Societies Investor Protection Board

58 After paragraph 5 of Schedule 5 to the 1986 Act (the Building Societies Investor Protection Board) there shall be inserted the following paragraph--

" Performance of functions

5A The Board may authorise--

(a) any member or members of the Board,

(b) any committee or sub-committee of the Board, or

to perform on behalf of the Board such of the Board's functions (including the power conferred by this paragraph) as are specified in the authorisation. "

Directors: requisite particulars of restricted transactions

59 In paragraph 2(2)(c) of Schedule 9 to the 1986 Act (directors: requisite particulars of restricted transactions), for the words "an advance or other loan" there shall be substituted the words "a loan".

Requisite particulars of income of related business

60 (1) In paragraphs 1 to 8 of Schedule 10 to the 1986 Act (requisite particulars of income of related business), for the words "management services", in each place where they occur, there shall be substituted the words "administrative services".

(2) In paragraphs 1, 2, 5 and 6 of that Schedule--

(a) for the words "an advance", in each place where they occur, there shall be substituted the words "a loan"; and

(b) the words "under section 6, 10, 17 or 19" shall cease to have effect.

(3) In paragraphs 4 and 8 of that Schedule, for the word "advances" there shall be substituted the word "loans".

Auditors: appointment, tenure and qualifications

61 In paragraph 5 of Schedule 11 to the 1986 Act (auditors: appointment, tenure and qualifications)--

(a) in sub-paragraph (2)(c), for the word "subsidiary" there shall be substituted the words "subsidiary undertaking"; and

(b) in sub-paragraph (4), for the words "sub-paragraph (1)(f)" there shall be substituted the words "sub-paragraph (1)(b)".

Schemes for investigation of complaints

62 (1) In Part I of Schedule 12 to the 1986 Act (schemes for investigation of complaints), for the words "Parts II and III of this Schedule" there shall be substituted the words "Part III of this Schedule".

(2) Part II of that Schedule (matters of complaint) shall cease to have effect.

(3) In paragraph 2 of Part III of that Schedule (other requirements)--

(a) after paragraph (b) there shall be inserted the following paragraph--

" (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; " ;

(b) in paragraph (c), for the words "associated body" there shall be substituted the words "connected undertaking";

(c) in the first note, for the words "the registered office of the associated body" there shall be substituted the words "of the connected undertaking"; and

(d) in the second note, for the words "associated body's" there shall be substituted the words "connected undertaking's".

(4) In paragraphs 3 to 5, 6(1) and 7 of that Part of that Schedule, for the words "associated body", in each place where they occur, there shall be substituted the words "connected undertaking".

(5) In paragraph 6(3) of that Part of that Schedule--

(a) for the words "an associated body" there shall be substituted the words "a connected undertaking"; and

(b) for the words "with which it is associated" there shall be substituted the words "of which it is a connected undertaking".

Recognition etc. of schemes for investigation of complaints

63 (1) Schedule 13 to the 1986 Act (recognition etc. of schemes for investigation of complaints) shall be amended as follows.

(2) In paragraph 1 (preliminary)--

(a) in the definition of "qualifies for recognition", for the words "the matters", in the second place where those words occur, there shall be substituted the words "the services" and for the words "of the prescribed matters of complaint" there shall be substituted the words "relevant services";

(b) in the definition of "conforms to the relevant requirements", for the words "prescribed matter of complaint" there shall be substituted the words "relevant service" and for the words "that matter" there shall be substituted the words "that service"; and

(c) for the words "prescribed matters of complaint", in the second place where they occur, there shall be substituted the words "relevant services".

(3) In paragraph 4(2) (procedure for recognition: Commission's initiative), for the words "prescribed matters of complaint" there shall be substituted the words "relevant services".

(4) In paragraph 5(2) (procedure for recognition: submission by societies), for the words "of the prescribed matters of complaint", in both places where they occur, there shall be substituted the words "relevant services".

(5) In sub-paragraph (1) of paragraph 6 (procedure on accession to schemes), after the words "building society" there shall be inserted the words "or connected undertaking of a building society".

(6) In sub-paragraph (2) of that paragraph--

(a) after the word "society", in both places where it occurs, there shall be inserted the words "or undertaking"; and

(b) for the words "the prescribed matters of complaint" there shall be substituted the words "the relevant services".

(7) In sub-paragraph (3) of that paragraph, for the words "the prescribed matters of complaint" there shall be substituted the words "the relevant services".

(8) After that sub-paragraph there shall be inserted the following sub-paragraph--

" (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. "

(9) In sub-paragraph (4) of that paragraph--

(a) after the words "building society" there shall be inserted the words "or connected undertaking"; and

(b) after the word "society", in the second and third places where it occurs, there shall be inserted the words "or undertaking".

(10) In paragraph 7(2) (withdrawal of recognition), for the words "prescribed matters of complaint" there shall be substituted the words "relevant services".

(11) In sub-paragraph (1) of paragraph 10 (withdrawal from membership), after the words "building society" there shall be inserted the words "or connected undertaking of a building society".

(12) In sub-paragraph (2) of that paragraph--

(a) after the word "society", in each place where it occurs, there shall be inserted the words "or undertaking"; and

(b) for the words "the prescribed matters of complaint", in both places where they occur, there shall be substituted the words "the relevant services".

(13) After sub-paragraph (3) of that paragraph there shall be inserted the following sub-paragraph--

" (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. "

(14) In sub-paragraph (4) of that paragraph--

(a) after the word "society's" there shall be inserted the words "or undertaking's"; and

(b) after the word "society" there shall be inserted the words "or undertaking".

(15) In sub-paragraph (5) of that paragraph--

(a) after the word "society", in the first place where it occurs, there shall be inserted the words "or connected undertaking of a society"; and

(b) after the word "society", in the second place where it occurs, there shall be inserted the words "or undertaking".

Settlement of disputes

64 (1) In paragraph 1(4) of Schedule 14 to the 1986 Act (settlement of disputes), for the words "paragraph 31(4)(a)" there shall be substituted the words "paragraph 20A(10)(a) or 31(4)(a)".

(2) In sub-paragraph (1) of paragraph 4 of that Schedule--

(a) after the words "an election address" there shall be inserted the words "or a revised election address"; and

(b) for the words "paragraph 31(1)" there shall be substituted the words "paragraph 20A(1)(b) or 31(1)".

(3) In sub-paragraph (2) of that paragraph, for the words "paragraph 31(1)" there shall be substituted the words "paragraph 20A(1)(b) or 31(1)".

(4) After that paragraph there shall be inserted the following paragraph--

" 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. "

(5) In paragraph 7(1) of that Schedule--

(a) for the words "prescribed matter of complaint" there shall be substituted the words "relevant service"; and

(b) for the words "associated body" there shall be substituted the words "connected undertaking".

Application of companies winding up legislation to building societies

65 In paragraph 3(2) of Schedule 15 to the 1986 Act (application of companies winding up legislation to building societies), for paragraph (b) there shall be substituted the following paragraph--

" (b) every reference to an administrative receiver shall be omitted. "

Mergers: supplementary provisions

66 (1) In paragraph 1 of Schedule 16 to the 1986 Act (mergers: supplementary provisions)--

(a) in sub-paragraph (4)(e), for the words "class 1 or 2 advances made by the building society" there shall be substituted the words "loans made by the building society which are secured on land"; and

(b) sub-paragraph (5) shall cease to have effect.

(2) For sub-paragraph (2) of paragraph 4 of that Schedule there shall be substituted the following sub-paragraphs--

" (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.

(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. "

(3) In sub-paragraph (1) of paragraph 5 of that Schedule--

(a) after the words "merger statement" there shall be inserted the words "or transfer proposal notification"; and

(b) after the words "the statement" there shall be inserted the words "or notification".

(4) In sub-paragraph (2) of that paragraph, after the words "merger statement" there shall be inserted the words "or transfer proposal notification".

Transitional and saving provisions

67 In Schedule 20 to the 1986 Act (transitional and saving provisions), the following shall cease to have effect, namely--

(a) in paragraph 1, the definitions of "existing society" and "existing rules"; and

(b) paragraphs 2 to 4, 7 to 15 and 17 and 18.

Section 46(1).

SCHEDULE 8 Transitional provisions and savings

Alterations of purpose, powers and rules

1 (1) At any time during the period beginning two months after the passing of this Act and ending with the commencement of sections 1 and 2 of this Act, a building society may, for the purposes of the transition to the 1986 Act as amended by those sections--

(a) by special resolution, alter its purpose or principal purpose, alter its powers and alter its rules; and

(b) send to the central office four copies of a record of the alterations accompanied by a statutory declaration by the secretary that the alterations were effected by a resolution passed as a special resolution and that the record is a true record of the resolution.

(2) On altering its purpose or principal purpose, its powers and its rules under this paragraph, the building society shall determine the date on which the society intends the alterations to take effect and the record of the alterations sent to the central office shall specify that date (in this paragraph referred to as "the specified date").

(3) Subject to sub-paragraph (4) below, the central office, if satisfied that the alterations are in conformity with the 1986 Act as amended by sections 1 and 2 of this Act, shall--

(a) retain and register one copy of the record of the alterations;

(b) return another copy to the secretary of the society, together with a certificate of registration; and

(4) No registration of a record of alterations shall be effected by the central office under sub-paragraph (3) above before the end of the period of 21 days beginning with the date on which it receives copies of the record under sub-paragraph (1) above.

(5) A record of alterations registered under this paragraph shall take effect on the specified date or, if registration of the record is not effected until a later date, that later date.

2 (1) Before the end of the transitional period each existing building society shall--

(a) by special resolution, alter its purpose or principal purpose, alter its powers and alter its rules, so as (in each case) to secure conformity with the 1986 Act as amended by sections 1 and 2 of this Act; and

(3) No date shall be specified under sub-paragraph (2) above which falls more than six months after the date of the meeting at which the special resolution was agreed.

(4) Subject to sub-paragraph (5) below, the central office, if satisfied that the alterations are in conformity with the 1986 Act as amended by sections 1 and 2 of this Act, shall--

(a) retain and register one copy of the record of the alterations;

(b) return another copy to the secretary of the society, together with a certificate of registration; and

(5) No registration of a record of alterations shall be effected by the central office under sub-paragraph (4) above before the end of the period of 21 days beginning with the date on which it receives copies of the record under sub-paragraph (1) above.

(6) A record of alterations registered under this paragraph shall take effect on the specified date or, if registration of the record is not effected until a later date, that later date.

(7) In this paragraph--

"existing building society" means a building society registered under the 1986 Act immediately before the commencement of sections 1 and 2 of this Act;
"the transitional period" means the period beginning with that commencement and expiring with such day as the Commission, with the consent of the Treasury, prescribes by order made by a statutory instrument.

Default powers

3 (1) If the central office has not, before the end of the transitional period, received from an existing building society copies of a record of alterations in accordance with paragraph 1 or 2 above, the society shall be treated as having, by special resolution--

(a) altered its purpose or principal purpose to that required by section 5(1) of the 1986 Act as amended by section 1(1) of this Act;

(b) so altered its powers as to include all powers which were exercisable by it immediately before the commencement of sections 1 and 2 of this Act; and

(c) made such alteration of its rules as, in conformity with model rules made under this paragraph, the central office directs.

(2) The Commission may, by order made by a statutory instrument made with the consent of the Treasury, prescribe model rules for building societies for the purposes of this paragraph.

(3) Where, under this paragraph, a society is treated as having by special resolution, altered its purpose or principal purpose, its powers and its rules, the central office shall prepare three copies of a record of the alterations and shall--

(a) retain and register one copy;

(b) return another to the secretary of the society, together with a certificate of registration; and

(4) A record of alterations so registered shall have effect for all purposes of the society's memorandum and rules until further alterations are made under paragraph 4 of Schedule 2 to the 1986 Act.

(5) Such fee as is prescribed shall be due from the society to the Chief Registrar for the registration of a record of alterations under this paragraph.

(6) In this paragraph--

"existing building society" means a building society registered under the 1986 Act immediately before the commencement of sections 1 and 2 of this Act;
"prescribed"--
(a)
except in sub-paragraph (5) above, means prescribed by the Commission, with the consent of the Treasury, by order made by statutory instrument; and
(b)
in that sub-paragraph, means prescribed by the Chief Registrar, with the consent of the Treasury, by order so made;
"the transitional period" means the period beginning with that commencement and expiring with such day as is prescribed.

Existing members to whom advances have been made

4 (1) Nothing in section 2 of this Act shall affect the operation of sub-paragraph (2) of paragraph 6 of Schedule 2 to the 1986 Act in relation to any person who, immediately before the commencement of that section, is the holder of a share on which an advance has been made.

(2) Nothing in that section shall affect the operation of sub-paragraph (3) of that paragraph in relation to any person who, immediately before the commencement of that section, is a member of a building society to whom an advance has been made under rules made in pursuance of paragraph 5(1) or (2) of that Schedule.

Existing borrowing members which are corporations

5 Nothing in section 2 of this Act shall affect the operation of Schedule 2 to the 1986 Act in relation to any body corporate which, immediately before the commencement of that section, is a borrowing member of a building society within the meaning given by paragraph 5(2) of that Schedule (as substituted by that section).

Existing fully secured loans

6 (1) Subject to subsection (7) of section 6B of the 1986 Act--

(a) any advance which immediately before the commencement of that section was or was treated as a class 1 advance shall be treated as a loan falling within paragraph (a) of subsection (4) of that section;

(b) any advance which immediately before that commencement was or was treated as a class 2 advance shall be treated as a loan falling within that paragraph if the building society concerned determines that, on the assumption mentioned in sub-paragraph (2) below, it would have been a class 1 advance;

(c) any advance not falling within paragraph (b) above which immediately before that commencement was or was treated as a class 2 advance shall be treated as a loan falling within paragraph (b) of that subsection; and

(d) any advance which immediately before that commencement neither was nor was treated as a class 1 or a class 2 advance shall be treated as a loan falling within paragraph (c) of that subsection.

(2) The assumption is that section 11 of the 1986 Act had effect at all material times--

(a) with the substitution for paragraph (b) of subsection (2) of the following paragraph--

" (b) the land is for residential use; " ; and

(b) with the omission from subsection (3) of the words "by the borrower or a dependant of his of a prescribed description".

Existing shareholders

7 Unless the contrary is shown, a building society may assume that any shares in the society which are held by an individual at the commencement of section 8 of this Act are held otherwise than as a bare trustee (or, in Scotland, a simple trustee) for a body corporate, or for persons who include a body corporate.

Existing depositors and shareholders

8 (1) Nothing in section 9 of this Act shall affect the operation of the 1986 Act in relation to--

(a) any deposit accepted by a building society from an individual before the commencement of that section;

(b) any deposit accepted by a building society from an individual to whom sub-paragraph (2) below applies which is to be credited to a deposit account opened before that commencement;

(c) any deposit accepted by a building society from an individual which is to be credited to a tax-exempt special savings account opened before that commencement; or

(d) any share issued by a building society to a body corporate before that commencement.

(2) This sub-paragraph applies to an individual if--

(a) a deposit of his is held in a deposit account opened before the commencement of section 9 of this Act;

(b) he has been notified by the building society that he may transfer the deposit without penalty into an account which, at the date of the notice, was an equivalent share account; and

(3) In this paragraph--

"access period", in relation to a deposit or share account, means the period of notice required for making withdrawals from the account;
"equivalent share account", in relation to a deposit account, means a share account--
(a)
whose access period is no longer than that of the deposit account; and
(b)
whose rate of interest is not less than that of each other share account with the society which has the same access period or, where there is no such account, that of any one share account with the society which has a longer access period;
"tax-exempt special savings account" has the meaning given by section 326A(2) of the [1988 c. 1.] Income and Corporation Taxes Act 1988.

(4) In relation to anything which, after the commencement of section 9 of this Act, is done by a building society under paragraph (d) of section 8(2) of the 1986 Act, sub-paragraphs (1) and (2) above shall have effect as if any reference to that commencement were a reference to the expiry of the period mentioned in that paragraph.

Existing transfer statements referring to the abolition of priority liquidation distribution rights

9 (1) Where before the commencement of section 40 of this Act, a building society issued a transfer statement which satisfies the requirements of sub-paragraph (2) below and either--

(a) the transfer of the society's business to the company which is to be its successor is effected after that commencement; or

(b) that transfer was effected after the relevant date and before that commencement and the company is not being wound up at that commencement,

section 100 of the 1986 Act shall be deemed to have had effect in relation to the transfer as if section 40 of this Act had come into force on that date.

(2) The requirements of this sub-paragraph are that the statement--

(a) referred to the possibility of provision being made to the like effect as section 40 of this Act; and

(b) stated that, if such provision were made, either no rights to priority liquidation distributions would be conferred on qualifying members of the society or, if such rights had been so conferred, they would be withdrawn.

(3) In this paragraph--

"the relevant date" means 6th November 1996;
"transfer statement" has the same meaning as in Part I of Schedule 17 to the 1986 Act.

Existing specially formed successor companies

10 (1) This paragraph applies where before the passing of this Act a company has been specially formed by a building society to be its successor.

(2) Nothing in section 101 of the 1986 Act as substituted by section 41 of this Act shall be taken--

(a) to impose any requirement which would not be imposed, or to render void any provision, allotment or registration which would not be rendered void, if that section of this Act had not been enacted; or

(b) to prevent any alterations in the provisions of the company's articles of association which are such as to secure that the company does not contravene, or that those provisions are consistent with, subsection (1) of section 101 of that Act as so substituted.

Section 46(2).

SCHEDULE 9 Repeals and revocations

Reference	Short title or title	Extent of repeal or revocation
1974 c. 47.	Solicitors Act 1974.	Section 86.
1978 c. 27.	Home Purchase Assistance and Housing Corporation Guarantee Act 1978.	Section 3(1)(b).
S.I. 1981/156 (N.I.3).	Housing (Northern Ireland) Order 1981.	Article 155.
1985 c. 68.	Housing Act 1985.	Section 450.
1986 c. 53.	Building Societies Act 1986.	Section 4(2).
		In section 9(3), paragraph (d) and the word "or" immediately preceding that paragraph.In section 28(1), the words "as in respect of a contractual debt incurred immediately before the institution began to be wound up".
		Section 33.
		Sections 38 to 40.
		In section 41, subsections (14) to (16).
		Section 51.
		Section 52(3).
		In section 60(17), the definition of "ordinary resolution".
		In section 65(10), the word "and" immediately following the definition of "provision of funds".
		Section 71(10A).
		Section 79(5).
		In section 82, in subsection (2), paragraph (c) and the word "and" immediately preceding that paragraph and, in subsection (3), paragraph (d).
		Section 84(1).
		In section 95, subsections (7) to (9).
		In section 97(3), the words from "and for the purposes" to the end.
		In section 100, in subsection (2), paragraph (c) and the word "and" immediately before that paragraph, and subsections (5) and (6).
		Section 105.
		Section 108.
		Section 118.
		In section 119, in subsection (1), the definitions of "adopt", "adopted", "adoptable powers", "advance secured on land", "advance fully secured on land", "advance secured on third party land", "mobile home loan", "qualifying asset holding", "subsidiary" and "total commercial assets" and, in subsection (3)(a), the words "by him" and "to him".
		In section 122(1), the words "section 15,".
		In Schedule 2, paragraph 2(5), in paragraph 4(4), the words "subject to paragraph 19 below" and, in paragraph 30(3), the words "has been duly given".
		In Schedule 10, in paragraphs 1, 2, 5 and 6, the words "under section 6, 10, 17 or 19".
		In Schedule 12, Part II.
		In Schedule 16, paragraph 1(5).
		In Schedule 18, paragraphs 18(4) and 23(3).
		In Schedule 20, in paragraph 1, the definitions of "existing society" and "existing rules", and paragraphs 2 to 4, 7 to 15 and 17 and 18.
1987 c. 22.	Banking Act 1987.	In Schedule 6, in paragraph 26, sub-paragraphs (1) and (8).
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