(2) The function conferred by subsection (1) is to be carried out with a
view to (among other things) ensuring that the FCA has sufficient
information to take informed decisions and to carry out its other
functions effectively.

234O 5Exclusion of general duties

(1) Section 1B (the FCA’s general duties) does not apply in relation to
anything done by the FCA in the carrying out of its functions by
virtue of sections 234J to 234M.

(2) But in the carrying out of any functions by virtue of sections 234J to
10234M, the FCA may have regard to any of the matters in respect of
which a duty is imposed by section 1B if it is a matter to which the
CMA is entitled to have regard in the carrying out of those functions.

234P Supplementary provision

(1) If any question arises as to whether, by virtue of section 234J or 234K,
15any functions fall to be, or are capable of being, carried out by the
FCA in relation to any particular case, that question is to be referred
to, and determined by, the Treasury.

(2) No objection is to be taken to anything done under the Competition
Act 1998 or Part 4 of the Enterprise Act 2002 by or in relation to the
20FCA on the ground that it should have been done by or in relation to
the CMA.”

4 In section 3I of FSMA 2000 (power of PRA to require FCA to refrain from
specified action), in subsection (3)(a), after “55I” insert “, a power conferred
on it by sections 234J to 234N”.

5 25In section 354A of FSMA 2000 (FCA’s duty to co-operate with others), after
subsection (2) insert—

“(2A) Subsection (1) does not apply in relation to the Competition and
Markets Authority in a case where the FCA has made a reference
under section 131 of the Enterprise Act 2002 as a result of section 234J
30(but see section 234M).”

6 (1) Schedule 1ZA to FSMA 2000 (the Financial Conduct Authority) is amended
as follows.

(2) In paragraph 8 (arrangements for discharging functions), after sub-
paragraph (4) insert—

“(5) 35In respect of the exercise of a function under Part 1 of the
Competition Act 1998, the power in sub-paragraph (1) is subject to
provision in rules made under section 51 of that Act by virtue of
paragraph 1A of Schedule 9 to that Act.”

(3) In paragraph 23 (fees), after sub-paragraph (2) insert—

“(2A) 40The functions referred to in sub-paragraph (1)(a) include functions
of the FCA under the Competition Act 1998 or the Enterprise Act
2002 as a result of Part 16A of this Act.”

Part 2 Amendments of other legislation

Company Directors Disqualification Act 1986

7 In section 9E of the Company Directors Disqualification Act 1986
5(interpretation of sections 9A to 9D), in subsection (2), after paragraph (g)
insert—

“(h) the Financial Conduct Authority.”

Competition Act 1998

8 In section 54 of the Competition Act 1998 (regulators), in subsection (1), after
10paragraph (i) insert—

“(j) the Financial Conduct Authority.”

Enterprise Act 2002

9 (1) Section 136 of the Enterprise Act 2002 (investigations and reports on market
investigation references) is amended as follows.

(2) 15In subsection (7), after paragraph (e) insert—

“(ea) in relation to the Financial Conduct Authority, section 234J of
the Financial Services and Markets Act 2000;”.

(3) In subsection (8), after “the Office of Rail Regulation,” insert “the Financial
Conduct Authority,”.

20Enterprise and Regulatory Reform Act 2013

10 In section 52(4) of the Enterprise and Regulatory Reform Act 2013 (power to
remove concurrent competition functions of sectoral regulators), after
paragraph (g) insert—

“(h) the Financial Conduct Authority.”

11 25In Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (the
Competition and Markets Authority), in paragraph 16 (concurrency report),
at the end of sub-paragraph (7) insert—

“(i) the Financial Conduct Authority.”

Section 120

SCHEDULE 9 30Building societies

Introductory

1 The Building Societies Act 1986 is amended as follows.

Exclusion of small business deposits from funding limit

2 (1) Section 7 (the funding limit) is amended as follows.

(2) 35In subsection (3), omit the “and” at the end of paragraph (a) and after that

paragraph insert—

“(aa) subject to subsection (3A), the principal of, and interest
accrued on, sums deposited with the society or any
subsidiary undertaking of the society by a small business (see
5subsection (10));”.

(3) After subsection (3) insert—

“(3A) In respect of any day by reference to which the value of X falls to be
calculated for the purposes of subsection (1) in relation to the society,
the total amount to be disregarded under subsection (3)(aa) may not
10exceed 10% of the amount that would, in the absence of subsection
(3)(aa), be the value of X on that day.”

(4) After subsection (6) insert—

“(6ZA) Where a person declares that the person is a small business, the
person shall, unless the contrary is shown, be conclusively presumed
15for the purposes of this section to be a small business.”

(5) After subsection (9) insert—

“(10) In this section “small business” means any person (other than an
individual acting as a sole trader) carrying on a business which had
a turnover in the relevant financial year of less than £1,000,000.

(11) 20For the purposes of subsection (10)—

(a) the “relevant financial year”, in relation to any day by
reference to which the value of X falls to be calculated for the
purposes of subsection (1) in relation to a building society,
means the last financial year ending before that day;

(b) 25“turnover”, in relation to a small business, means the amount
derived from the provision of goods and services falling
within the business’s ordinary activities, after deduction of
trade discounts, value added tax and any other taxes based
on the amounts so derived;

(c) 30in respect of any relevant financial year, the reference to
£1,000,000 includes the equivalent amount in any other
currency, calculated as at the last day of that year.

(12) The Treasury may, by order made by statutory instrument, amend
the figure for the time being specified in subsections (10) and (11)(c).

(13) 35A statutory instrument containing an order under subsection (12) is
subject to annulment in pursuance of a resolution of either House of
Parliament.”

3 (1) In article 3 of the Building Societies Act 1986 (Substitution of Specified
Amounts and Modification of the Funding Limits Calculation) Order 2007
40(S.I. 2007/860S.I. 2007/860), in paragraph 3, for “the modification required by this article”
substitute “the modifications required by this article and by section
7(3)(aa)”.

(2) The amendment by this paragraph of a provision contained in subordinate
legislation is without prejudice to any power to amend that provision by
45subordinate legislation.

Ability to create floating charges

4 (1) Omit section 9B (restriction on creation of floating charges).

(2) In Schedule 15A (application of other companies insolvency legislation to
building societies), omit the following paragraphs—

(a) 5paragraph 18 (which modifies section 15 of the Insolvency Act 1986);

(b) paragraph 20 (which modifies section 19 of that Act);

(c) paragraph 40 (which modifies Article 28 of the Insolvency (Northern
Ireland) Order 1989);

(d) paragraph 42 (which modifies Article 31 of that Order).

(3) 10In consequence of the amendment made by sub-paragraph (1)—

(a) in section 1(1A)(b), for “, 9A and 9B” substitute “and 9A”;

(b) in the Building Societies Act 1997, omit section 11;

(c) in section 11(3) of the Banking (Special Provisions) Act 2008, for
paragraph (c) substitute—

“(c) 15sections 8 and 9A of the Building Societies Act 1986
(restrictions on raising funds and borrowing and on
transactions involving derivative instruments etc);”;

(d) in section 251 of the Banking Act 2009, omit subsection (7);

(e) in the Financial Services Act 2012, omit section 55.

20Annual business statements

5 (1) Section 74 (duty of directors to prepare annual business statement) is
amended as follows.

(2) In subsection (4), omit the words from “and other officers” to “them”.

(3) In subsection (8), omit “or other officer”.

25Summary financial statements

6 (1) Section 76 (summary financial statement for members and depositors) is
amended as follows.

(2) After subsection (8A) insert—

“(8AA) The society shall also—

(a) 30publish the summary financial statement and (where
applicable) the auditor’s report on a web site, and

(b) ensure that the statement and (where applicable) the report
may be accessed on the web site until the publication of the
next summary financial statement.”

(3) 35After subsection (8D) insert—

“(8E) If, at any time during the period beginning with the publication of
the summary financial statement and ending with the publication of
the next summary financial statement, an individual for the first time
subscribes for shares in the society, the society shall at that time
40notify the individual of the information in subsection (8C)(c)(i) to
(iii).

(8F) In a case where subsection (8E) applies, the society is not required
under section 115B (right to hard copy version) to send the
individual a version of the summary financial statement or (where
applicable) the auditor’s report in hard copy form (within the
5meaning of that section).”

(4) Omit subsections (9) to (9E).

(5) In subsection (11), for “subsection (9)” substitute “subsection (8AA) or (8E)”.

7 In consequence of the amendments made by paragraph 6—

(a) in section 78(6), for “subsections (8) and (9) of section 76 extend”
10substitute “subsection (8) of section 76 extends”;

(b) in paragraphs 7(3) and 8(3) of Schedule 2, omit “the summary
financial statement,”.

Transfers of business: distributions and share rights

8 (1) Section 100 (regulated terms etc: distributions and share rights) is amended
15as follows.

(2) For subsection (8) substitute—

“(8) The terms of a transfer of a society’s business may confer a right to
acquire shares in the successor on a member of the society only if the
member—

(a) 20held shares in the society throughout the period of two years
ending with the qualifying day, or

(b) on that day, holds deferred shares in the society that are of a
class described in the transfer agreement;

and it is unlawful for any right in relation to shares to be conferred
25in contravention of this subsection.”

(3) In subsection (9), for the words from “who” to “and” substitute “who—

(a) held shares in the society throughout the period of two years
ending with the qualifying day, or

(b) on that day, hold deferred shares in the society that are of a
30class described in the transfer agreement;

and”.

Methods of communicating with members etc

9 After section 115 insert—

“115A Deemed agreement to use of web site

(1) 35For the purposes of this Act, a person is to be taken to have agreed
with a building society to access a document, information or facility
on a web site if—

(a) the person has been asked individually by the society to
agree to access documents, information or facilities generally,
40or documents, information or facilities of the description in
question, on a web site, and

(b) the society has not received a response within the period of
28 days beginning with the date on which the society’s
request was received.

This is subject to subsections (2) to (4).

(2) A person is not to be taken to have so agreed if the society’s request—

(a) did not state clearly what the effect of a failure to respond
would be, or

(b) 5was sent less than 12 months after a previous request made to
the person for the purposes of this section in respect of the
same or a similar description of document, information or
facility.

(3) A person who is taken to have made an agreement by virtue of
10subsection (1) may revoke the agreement.

(4) Subsection (1) does not apply in relation to the following
documents—

(a) a statement required to be sent to members by paragraph 1(1)
of Schedule 16 (statements in connection with proposed
15mergers);

(b) a merger statement (within the meaning of Part 2 of that
Schedule) required to be sent to members by paragraph 3 of
that Schedule;

(c) a transfer statement or transfer summary (within the
20meaning of Part 1 of Schedule 17) required to be sent to
members by paragraph 4(1) or (2) of that Schedule;

(d) a transfer proposal notification (within the meaning of Part
1A of Schedule 17) required to be sent to members by
paragraph 5B(1) of that Schedule.

115B 25Right to hard copy version

(1) Where a person has received a document or information from a
building society otherwise than in hard copy form, the person is
entitled to require the society to send the person a version of the
document or information in hard copy form.

(2) 30The society must send the document or information in hard copy
form within 21 days of receipt of the request from the person.

(3) The society may not make a charge for providing the document or
information in that form.

(4) Subsection (1) does not apply if the recipient of the document or
35information is the FCA or the PRA.

(5) A building society that fails to comply with this section is to be
treated as having contravened rules made under section 137A of the
Financial Services and Markets Act 2000.

(6) For the purposes of this section a person is treated as receiving a
40document or information from a building society if—

(a) the society is required by this Act to send the document or
information to the person, and

(b) the requirement to send it is treated as satisfied.

(7) For the purposes of this section—

(a) a document or information is sent or supplied in hard copy
form if it is sent or supplied in a paper copy or similar form
capable of being read, and

(b) a document or information can be read only if it can be read
5with the naked eye, or (to the extent that it consists of images)
it can be seen with the naked eye.

115C Other agreed forms of communication

(1) A document or information that is sent or supplied by a building
society otherwise than in hard copy form or electronically or by
10means of a web site is validly sent or supplied if it is sent or supplied
in a form or manner that has been agreed by the intended recipient.

(2) For the purposes of this section “hard copy form” is to be read in
accordance with section 115B(7).”

10 In the following provisions, omit “, in a manner agreed between him and the
15society,”—

(none) section 60(7B)(c),

(none) section 61(7D)(c),

(none) section 68(6B)(c),

(none) section 69(15B)(c),

(none) 20section 76(8C)(c).

11 In section 81(3B)(c), omit “, in a manner agreed for the purpose between him
and the society,”.

12 (1) Schedule 2 is amended as follows.

(2) In paragraph 20A(1B)(c), omit “, in a manner agreed between him and the
25society,”.

(3) In paragraphs 22B(2)(c) and 33(5C)(c), omit “, in a manner agreed between
him and the society for that purpose,”.

(4) In paragraph 24(1B)(b), omit “in a manner agreed between the society and
that member,”.

(5) 30In paragraph 32(2D)(c), omit “, in a manner agreed between the society and
the member,”.

(6) In paragraph 33A(9)(c), omit “, in a manner agreed for the purpose between
him and the society”.

13 In paragraphs 3(2B)(c) and 9(2B)(c) of Schedule 8A, omit “in a manner
35agreed between the society and that person,”.

14 (1) Schedule 11 is amended as follows.

(2) In paragraph 4(9C)(c), omit “, in a manner agreed between him and the
society,”.

(3) In paragraph 7(7C)(c), for “in a manner agreed between the society and that
40person, he” substitute “the person”.

(4) In paragraph 8(3B)(c), omit “, in a manner agreed between him and the
society for the purpose,”.

Financial year

15 (1) Section 117 (financial year of building societies) is amended as follows.

(2) For subsection (1) substitute—

“(1) A building society’s financial years (apart from its final financial
5year) are determined according to its year-end date in each calendar
year.

For provision about a building society’s final financial year, see
subsection (1G).

(1A) The year-end date of a building society established before 25th
10August 1894 is—

(a) the date up to which, as at 1st January 1987, the accounts of
the society were annually made up, or

(b) if the society has, at any time before the day on which
subsection (1) comes into force (“the relevant day”), altered
15its financial year in exercise of a power within subsection
(1B), 31st December.

(1B) The powers referred to in subsection (1A)(b) are—

(a) the power conferred by section 70(2) of the Building Societies
Act 1960,

(b) 20the power conferred by section 128(2) of the Building
Societies Act 1962, and

(c) the power conferred by subsection (3) of this section (as it had
effect immediately before the relevant day).

(1C) The year-end date of a building society established on or after 25th
25August 1894 and before the relevant day is 31st December.

(1D) The year-end date of a building society established on or after the
relevant day is the last day of the month in which the anniversary of
its establishment falls.

(1E) The financial year of a building society established before the
30relevant day is the period of 12 months ending with the year-end
date of the society (but see subsection (1G)).

(1F) In the case of a building society established on or after the relevant
day—

(a) the initial financial year of the society shall be the period of
35more than 6 months, but not more than 18 months, beginning
with the date of its establishment and ending with its year-
end date, and

(b) its subsequent financial years are successive periods of 12
months beginning immediately after the end of the previous
40financial year and ending with its year-end date (but see
subsection (1G)).

(1G) The final financial year of a building society is a period of less than
12 months that begins immediately after the end of the previous
financial year and ends with the date as at which the society makes
45up its final accounts.

(1H) This section has effect subject to section 117A (alteration of financial
year).”

(3) Omit subsections (2) and (3).

16 After section 117 insert—

“117A 5 Alteration of financial year

(1) A building society may by notice given to the FCA specify a new
year-end date.

(2) A notice given under subsection (1) has effect in relation to—

(a) the financial year in which the notice is given (“the current
10financial year”), and

(b) subsequent financial years.

(3) The notice must state whether the current financial year—

(a) is to be shortened, so as to come to an end on the first occasion
on which the new year-end date falls or fell after the
15beginning of the current financial year, or

(b) is to be extended, so as to come to an end on the second
occasion on which that date falls or fell after the beginning of
the current financial year.

(4) A notice extending a building society’s financial year is not effective
20if given less than 5 years after the end of an earlier financial year of
the society that was extended under this section.

(5) A financial year of a building society may not be extended so as to
exceed 18 months and a notice under subsection (1) is ineffective if
the current financial year as extended in accordance with the notice
25would exceed that limit.”

17 In Schedule 20 (transitional and saving provisions), omit paragraph 16
(existing financial years).

18 The amendments made by paragraphs 15 to 17 have effect in relation to
financial years beginning on or after the day on which those amendments
30come into force.

Section 121

SCHEDULE 10 Minor amendments

Companies Act 1985

1 In Schedule 15D to the Companies Act 1985 (disclosures), omit paragraph
3529.

Financial Services and Markets Act 2000

2 In section 376 of FSMA 2000 (continuation of contracts of long-term
insurance where insurer in liquidation), in subsection (11B), for “PRA-
authorised” substitute “PRA-regulated”.

3 (1) Part 25 of FSMA 2000 (injunctions and restitution) is amended as follows.

(2) In section 380 (injunctions), in subsection (6)(a), omit the “or” at the end of
sub-paragraph (i) and after sub-paragraph (ii) insert “or

(iii) which is imposed by Part 7 of the Financial Services
5Act 2012 (offences relating to financial services) and
whose contravention constitutes an offence under
that Part;”.

(3) In section 382 (restitution orders), in subsection (9)(a), omit the “or” at the
end of sub-paragraph (i) and after sub-paragraph (ii) insert “or

(iii) 10which is imposed by Part 7 of the Financial Services
Act 2012 (offences relating to financial services) and
whose contravention constitutes an offence under
that Part;”.

(4) In section 384 (power of FCA or PRA to require restitution), in subsection (7),
15omit the “and” at the end of paragraph (a) and after paragraph (b) insert “or

(c) a requirement which is imposed by Part 7 of the Financial
Services Act 2012 (offences relating to financial services) and
whose contravention constitutes an offence under that Part.”

4 (1) In Schedule 1ZA to FSMA 2000 (the Financial Conduct Authority),
20paragraph 20 (penalties) is amended as follows.

(2) In sub-paragraph (3)(b), after “this Act” insert “or under a provision
mentioned in sub-paragraph (4A)”.

(3) In sub-paragraph (4), after paragraph (c) insert—

“(ca) its powers under the relevant competition provisions (as
25applied by Part 16A of this Act),”.

(4) After sub-paragraph (4) insert—

“(4A) The relevant competition provisions” are—

(a) section 31E of the Competition Act 1998 (enforcement of
commitments);

(b) 30section 34 of that Act (enforcement of directions);

(c) section 36 of that Act (penalties);

(d) section 40A of that Act (penalties: failure to comply with
requirements);

(e) section 174A of the Enterprise Act 2002 (penalties).”

(5) 35In sub-paragraph (5)—

(a) in paragraph (a), for “FSMA 2000” substitute “this Act”,

(b) in paragraph (b), for “that Act” substitute “this Act”,

(c) in paragraph (c), omit “of that Act”, and

(d) after paragraph (c) insert—

“(ca) 40offences under Part 1 of the Competition Act 1998,

(cb) offences under Part 4 of the Enterprise Act 2002,”.

5 In Schedule 17A to FSMA 2000 (further provision in relation to exercise of
Part 18 functions by Bank of England), in paragraph 10(1)(j), for “subsections
(1) and (3)” substitute “subsection (1)”.