1 Citation and commencement

This Order may be cited as the Building Societies Act 1986 (Substitution of Specified Amounts and Modification of the Funding Limit Calculation) Order 2007 and comes into force on 6th April 2007.

NOTES
Initial Commencement
Specified date

Specified date: 6 April 2007: see above.

2 Substitution of specified amounts

2Substitution of specified amounts

(1)    The Building Societies Act 1986 is amended as follows.

(2)    In section 61 (directors: supplementary provisions as to elections, etc)—

(a)    in paragraphs (b) and (c) of subsection (2), for “£100” substitute “£200”;

(b)    in subsection (3)(a), for “£250” substitute “£500”.

(3)    In section 64(2) (substantial property transactions involving directors and connected persons)—

(a)    in paragraph (a), for “£100,000” substitute “£200,000”;

(b)    in paragraph (b)—

(i)    for “£500,000” substitute “£1,000,000”;

(ii)    for “£1,000” substitute “£2,000”.

(4)    In section 65 (restrictions on loans, etc to directors and persons connected with them)—

(a)    in subsection (2)(a), for “£5,000” substitute “£10,000”;

(b)    in subsection (2)(c), for “£100,000” substitute “£200,000”;

(c)    in subsection (3)(a), for “£10,000” substitute “£20,000”;

(d)    in subsection (4)(a), for “£5,000” substitute “£10,000”;

(e)    in subsection (6)(b), for “£20,000” substitute “£40,000”.

(5)    In section 68 (records of loans, etc for directors falling within section 65)—

(a)    in subsection (7), for “£1,000” substitute “£2,000”;

(b)    in subsection (8), for “£5,000” substitute “£10,000”.

(6)    In section 69(12) (disclosure and record of income of related businesses), for “£5,000” substitute “£10,000”.

(7)    In paragraph 20A(7) of Schedule 2 (establishment, incorporation and constitution of building societies), for “£25” substitute “£50”.

NOTES
Initial Commencement
Specified date

Specified date: 6 April 2007: see art 1.

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3 Modification of the funding limit calculation

3Modification of the funding limit calculation

(1)    Subsections (2) and (3) of section 7 of the Building Societies Act 1986 (the funding limit) are modified as follows in their application to the liabilities of EEA subsidiary undertakings of a building society.

(2)    For the purposes of section 7(2), there shall be disregarded so much of the aggregate of the principal value of, and interest accrued on, sums deposited with any EEA subsidiary undertaking of the society by individuals acting otherwise than as bare trustees for bodies corporate or for persons who include bodies corporate as does not exceed the limit in paragraph (3).

(3)    In respect of any day by reference to which the value of X falls to be calculated for the purposes of section 7(1) in relation to the society, that limit is 10 per cent of the amount which would, apart from the modification required by this article, be the value of X on that day.

(4)    Where an individual declares that he is depositing a sum with an EEA subsidiary undertaking of a building society otherwise than as a bare trustee for a body corporate or for persons who include a body corporate, he shall, unless the contrary is shown, be conclusively presumed for the purposes of section 7 to have deposited the sum otherwise than as such a trustee.

(5)    In this article, “EEA subsidiary undertaking” means a subsidiary undertaking that is incorporated or otherwise established in another EEA State, the Channel Islands, the Isle of Man or Gibraltar.

NOTES
Initial Commencement
Specified date

Specified date: 6 April 2007: see art 1.

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Signature

Frank Roy

Claire Ward

Two of the Lords Commissioners of Her Majesty's Treasury

15th March 2007

EXPLANATORY NOTE

EXPLANATORY NOTE (This note is not part of the Order)

This Order amends, and modifies the application of, provisions of the Building Societies Act 1986 (c 53).

Article 2 amends various financial amounts that are specified in the Building Societies Act 1986. The changes affect the rules concerning the election of a building society's directors, arrangements between a building society and the society's director or a connected person, loans by a building society to a director of the society, disclosure and records of certain business entered into by a building society's director and the deposit required for requisitioning a special meeting of a building society.

Under section 7 of the Building Societies Act 1986 at least 50 per cent of a building society's liabilities must be shares owned by individuals. Article 3 requires deposits made by individuals with a building society's subsidiaries in another EEA State, the Channel Islands, the Isle of Man or Gibraltar, to be disregarded for the purpose of calculating that percentage. The maximum amount of such deposits which is to be excluded is ten per cent of what would have been the value of the building society's liabilities but for the exclusion.

A full regulatory impact assessment of the effect that this instrument will have on the costs of business may be obtained from the General Insurance, Mutuals and Inclusion Team, HM Treasury, 1 Horse Guards Road, London SW1A 2HQ or from HM Treasury's website (www.hm-treasury.gov.uk) and is annexed to the Explanatory Memorandum which is available alongside the instrument on the OPSI website (www.opsi.gov.uk).

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