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[AS AMENDED IN PUBLIC BILL
COMMITTEE] |
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Make
provision in relation to funding limits in respect of building
societies; to |
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provide consequential rights
to building society members; and to make |
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provision in connection
with the transfer of the business of certain mutual |
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Be
it enacted by the Queen’s most Excellent Majesty,
by and with the advice and |
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consent of the Lords Spiritual
and Temporal, and Commons, in this present |
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Parliament assembled,
and by the authority of the same, as follows:— |
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1 |
Funding
limit for building societies |
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(1) |
In section 7 of the Building
Societies Act 1986 (c. 53) (funding limit)— |
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(a) |
after subsection (6) insert— |
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“(6A) |
The Treasury may, by order— |
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(a) |
provide for subsection (1)
to have effect as if the |
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reference
to 50 per cent were a reference to such greater |
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percentage
(not exceeding 75) as they think appropriate; |
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(b) |
prohibit a society from
applying the increased |
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percentage
unless a resolution of the society of such |
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description
as the Treasury think appropriate is passed |
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in
favour of applying the increased percentage. |
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(6B) |
An order under subsection
(6A) is of no effect at any time |
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unless,
at the same time, there is also in force an order under |
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section
90B (power to alter priorities on dissolution and |
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(6C) |
An order under subsection
(6A)(a)— |
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(a) |
may not be amended so
as to reduce the percentage |
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(b) |
may not be revoked, unless
it is replaced by another |
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such
order specifying the same or a greater percentage.”; |
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(b) |
in
subsection (8), after “subsection” insert “(6A)
or”; |
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(c) |
after subsection (8) insert— |
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“(8A) |
The power to make an
order under subsection (6A) is |
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exercisable
by statutory instrument but no such order may be |
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made
unless a draft of it has been laid before and approved by |
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a
resolution of each House of Parliament.”. |
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(2) |
In section 5 of that Act
(establishment, constitution and powers), after |
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“(11) |
The Treasury may by order
amend subsection (1)(a) so as to alter the |
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extent
to which the making of loans is required to be funded by a |
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(12) |
An order under this section
may make such consequential, saving, |
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supplementary
or transitional provision as the Treasury think |
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(13) |
The consequential provision
that may be made by virtue of subsection |
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(12)
includes, in particular, provision amending any the following
so |
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far
as relating to funding by the members of a society— |
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(a) |
section 1(1)(a) (functions
of the Financial Services Authority in |
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relation
to building societies); |
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(b) |
section 93(2)(a) (amalgamations); |
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(c) |
paragraph 2 of Schedule
2 to this Act (memorandum). |
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(14) |
The power to make an
order under this section is exercisable by |
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statutory
instrument, but no such order may be made unless a draft of
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it
has been laid before and approved by a resolution of each House
of |
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25 |
2 |
Power
to alter priorities on dissolution and winding up |
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After section 90A of the
Building Societies Act 1986
(c. 53) insert— |
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“90B |
Power
to alter priorities on dissolution and winding up |
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(1) |
The Treasury may by order
make provision for the purpose of ensuring |
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that,
on the winding up, or dissolution by consent, of a building
society, |
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any
assets available for satisfying the society’s liabilities
to creditors or |
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to
shareholders are applied in satisfying those liabilities pari
passu. |
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(2) |
Liabilities to creditors
do not include— |
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(a) |
liabilities in respect
of subordinated deposits; |
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(b) |
liabilities in respect
of preferential debts; |
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(c) |
any other category of
liability which the Treasury specifies in |
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the
order for the purposes of this paragraph. |
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(3) |
Liabilities to shareholders
do not include liabilities in respect of |
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(4) |
A preferential debt is
a debt which constitutes a preferential debt for the |
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purposes
of any of the enactments specified in paragraph 1 of Schedule
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15
to this Act (or which would constitute such a debt if the society
were |
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(5) |
An order under this section
may— |
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(a) |
make
amendments of this Act; |
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(b) |
make different provision
for different purposes; |
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(c) |
make such consequential,
supplementary, transitional and |
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saving
provision as appears to the Treasury to be necessary or |
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(6) |
The power to make an
order under this section is exercisable by |
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statutory
instrument but no such order may be made unless a draft of |
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it
has been laid before and approved by a resolution of each House
of |
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3 |
Transfers
to subsidiaries of other mutuals |
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(1) |
The Treasury may, by order,
make such modifications of the transfer |
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provisions as it thinks
appropriate to facilitate, or in consequence of, the |
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transfer of the whole of
the business of a mutual society (the transferor) to a |
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subsidiary of a mutual
society (whether or not of the same type) (the |
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(2) |
An order under this section
may make provision as to the rights (including |
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rights of and pertaining
to membership) in relation to the mutual society of |
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which the transferee is
a subsidiary— |
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(a) |
of the members of the transferor; |
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(b) |
of persons who, after the
transfer, become customers of the transferee. |
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(3) |
An order under this section
may confer such functions on the Financial |
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Services Authority as the
Treasury think appropriate. |
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(4) |
An order under this section— |
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(a) |
may make such consequential,
saving, supplementary or transitional |
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provision as the Treasury
think appropriate; |
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(b) |
may make different provision
for different purposes. |
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(5) |
The power to make an order
under this section is exercisable by statutory |
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(a) |
makes modifications of
a provision mentioned in paragraph (a), (b) or |
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(c) of subsection (10),
or |
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(b) |
amends paragraph (a) or
(b) of subsection (11), |
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(whether
or not it contains any other provision) must not be made unless
a |
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draft of it has been laid
before and approved by resolution of each House of |
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(7) |
Otherwise, an order is
subject to annulment in pursuance of a resolution of |
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either House of Parliament. |
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(8) |
Modifications include omissions,
additions and alterations. |
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(a) |
a building society incorporated
or deemed to be incorporated under the |
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Building
Societies Act 1986 (c. 53); |
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(b) |
a friendly society within
the meaning of the Friendly Societies
Act 1992 |
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(c) |
an industrial and provident
society registered or deemed to be |
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registered under the Industrial
and Provident Societies Act 1965 (c. 12). |
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(10) |
The
transfer provisions are— |
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(a) |
sections 97 to 102D of
the Building Societies Act 1986
(c. 53), paragraph |
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30 of Schedule 2 to that
Act and Schedule 17 to that Act; |
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(b) |
sections 86 and 88 of and
Schedule 15 to the Friendly Societies
Act 1992 |
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(c) |
section 52 of the Industrial
and Provident Societies Act 1965 (c. 12); |
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(d) |
provision contained in
subordinate legislation (within the meaning of |
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the Interpretation Act 1978)
made under any provision mentioned in |
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paragraph (a), (b) or (c). |
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(11) |
A subsidiary of a mutual
society is a company (within the meaning of the |
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Companies
Act 2006 (c. 46) (or, before the commencement of
Part 1 of that Act, |
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the Companies
Act 1985 (c. 6)) or the Companies (Northern Ireland)
Order |
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1986 (S.I. 1986/1032
(N.I. 6)))— |
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(a) |
in which the society holds
a majority of the voting rights or of which the |
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society is a member and
alone controls, pursuant to an agreement with |
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other shareholders or members,
a majority of the voting rights, and |
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(b) |
in relation to which the
society has the right to appoint or remove a |
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majority of the company’s
board of directors, |
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but
the Treasury may, by order, amend paragraphs (a) and (b) to
make the |
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degree of control required
more or less onerous. |
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4 |
Transfers
to subsidiaries: distribution of funds |
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(1) |
An order under section
3
may provide for this section to have effect. |
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(2) |
Subsection (3) applies
if the terms of a transfer to which the order applies |
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include provision for part
of the funds of the transferor or the mutual society |
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of which the transferee
is a subsidiary (the holding mutual) to be distributed in |
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consideration of the transfer
among the members of— |
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(b) |
the holding mutual, or |
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(c) |
both the transferor and
the holding mutual. |
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(3) |
The provision for the distribution
must be authorised as follows— |
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(a) |
it must not exceed the
limits prescribed by order under subsection (4), |
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and the distribution must
be approved (in the case of the transferor) by |
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the transfer resolution
or (in the case of the holding mutual) by a |
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resolution of such description
as the Treasury specifies by order; |
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(b) |
if the provision for a
distribution exceeds the prescribed limits, it must |
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be approved by each of the
resolutions mentioned in paragraph (a). |
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(4) |
The Treasury must by order
authorise distributions of funds to members by |
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mutual societies participating
(directly or through a subsidiary) in transfers to |
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which an order mentioned
in subsection (1) applies, subject to limits specified |
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by or determined in accordance
with the order. |
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(5) |
A transfer resolution is— |
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(a) |
in relation to a building
society, each of the resolutions required |
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pursuant to paragraph 30
of Schedule 2 to the Building Societies
Act |
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(b) |
in relation to a friendly
society, the resolution required by section |
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86(2)(b) of the Friendly
Societies Act 1992; |
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(c) |
in
relation to an industrial and provident society, the resolution
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required by section 52 of
the Industrial and Provident Societies
Act |
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(6) |
Expressions used in this
section and in section 3
have the same meaning as in |
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(7) |
Subsections (4) to (7)
of that section apply to an order under this section as they
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apply to an order under
that section. |
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5 |
Short
title, commencement and extent |
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(1) |
This Act may be cited
as the Building Societies (Funding) and Mutual Societies |
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10 |
(2) |
The preceding sections
of this Act shall come into force on such day as the |
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Treasury may by order made
by statutory instrument appoint, and different |
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days may be appointed for
different purposes. |
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(3) |
This Act extends to the
whole of the United Kingdom. |
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