Building Societies Act 1986

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.

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:

• (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).

Application to court to remove auditor from office

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

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.

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

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).

Protection of supplies

32A

Section 233B of the Act (protection of supplies of goods and services) does not apply.

Protection of supplies

55DA

Article 197B (protection of supplies of goods and services) does not apply.

Protection of supplies

27FA

Section 233B of the Act (protection of supplies of goods and services) is omitted.

Protection of supplies

52A

Article 197B of the Order (protection of supplies of goods and services) is omitted.

Restriction on creation of floating charges.

Advances secured on land.

Class 1 and class 2 advances: supplementary provisions.

Power to make prohibition orders.

Powers to petition for winding up etc.

Power to determine building society’s powers.

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Rights of appeal.

Determination of appeals.

Prohibition of tax-free payments to directors.

Building society insolvency as alternative order

Amalgamations.

Maximum engagement period: transitional arrangements

The matters for which provision is, subject to Part III of this Schedule, to be made are the following:

Maximum engagement period: transitional arrangements

34A

• (1) Nothing in this Part of this Schedule is to be taken to preclude the holding and conducting of a meeting of a building society in such a way that persons who are not present together at the same place may by electronic means attend, speak and vote at it.

• (2) The use of electronic means for the purpose of enabling participation in such a meeting may be made subject only to such requirements and restrictions as are—

• (a) necessary to ensure the identification of those attending and the security of the electronic communication, and

• (b) proportionate to the achievement of those objectives.

Directors: supplementary provisions as to elections, etc.

Amalgamations.

Transfer of engagements.

Protection of interests of beneficiaries in the case of trustee account holders.

Limited power to anticipate future statutory instrument powers.

Maximum engagement period: transitional arrangements

The matters for which provision is, subject to Part III of this Schedule, to be made are the following: