Legalize / United Kingdom / Public General Act

Building Societies Act 1986

Type Public General Act

Publication 1986-07-25

Last updated 2025-01-06

State In force

Department Statute Law Database

Source legislation.gov.uk

articles 16

Reform history JSON API

fails to make a declaration in accordance with sub-paragraph (2) below in the ... appointment or, as the case may be, on the voting paper, the appointment made or, as the case may be, the vote cast by him is invalid.

(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.

(2A) Where an appointment of a proxy is returned in an electronic communication in accordance with paragraph 24(1D), the requirements of sub-paragraph (2) above are satisfied only if—

(a) the appointment incorporates the terms of the declaration required by that subparagraph; and

(b) the authenticity and integrity of the appointment is established (whether by an electronic signature or otherwise) in such manner as may have been agreed between the member and the society.

(2B) Where a member voting in a postal ballot returns a completed voting paper electronically as mentioned in sub-paragraph (6E)(b) of paragraph 33 above, the requirements of sub-paragraph (2) above are satisfied only if—

(a) the voting paper incorporates the terms of the declaration required by that subparagraph; and

(b) the authenticity and integrity of the completed paper is established (whether by electronic signature or otherwise) in such manner as may have been agreed between the member and the society.

(2C) Where a member registers a vote on a web site in accordance with sub-paragraph (8)(b) of paragraph 33A above, the requirements of sub-paragraph (2) above are satisfied only if—

(a) at the place on the web site where the voting facility is accessed, the member has confirmed the terms of the declaration specified by that sub-paragraph; and

(b) the authenticity and integrity of the member’s vote is established (whether by electronic signature or otherwise) in such a manner as may have been agreed between the member and the society.

(3) A building society shall secure that every document issued by it for use as a voting paper and every appointment of a proxy incorporates a form of declaration under this paragraph for completion by the member using it.

(3A) A building society shall ensure that—

(a) every voting paper sent by it to a member by means of an electronic communication incorporates a declaration in accordance with sub-paragraph (2) above, and

(b) every voting facility provided by it on a web site is accompanied by such a declaration,

for completion or confirmation by the member purporting to exercise his right to vote.

(4) If a building society fails to comply with the requirements of sub-paragraph (3) above, the society shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale and so shall any officer who is also guilty of the offence.

(5) In this paragraph—

“authenticity” and “integrity”, with reference to an electronic communication, must be construed in accordance with section 15(2) of the Electronic Communications Act 2000;

“electronic signature” has the same meaning as in section 7(2) of that Act;

“qualifying shareholding” shall be construed in accordance with paragraph 23(5) above;

“qualifying shareholding date” has the same meaning as it has for the purposes of paragraph 23 above; and

“voting date” has the meaning given by paragraph 23(6) above.

Advertising requirements in lieu of notice of meetings, etc.

35

(1) The advertising requirements referred to in paragraph 14 above, in relation to notices of meetings or postal or electronic ballots of building societies, are as follows.

(2) Notice of the holding of the meeting or of the postal ballot must be given either—

(a) by displaying a notice in a prominent position in every branch office, or

(b) by advertisement in one or more newspapers circulating in the areas in which the members of the society reside,

according as the rules of the society provide.

(3) The notice must be given not later than 21 days before the date of the proposed meeting or, as the case may be, the final date for the receipt of completed ballot papers or for the registration of votes in an electronic ballot (as the case may be).

(4) The notice shall state where members may obtain copies of the resolutions and any statements with respect to the matter referred to in a resolution, forms relating to voting by proxy and, in the case of a postal ballot, the ballot papers, or, in the case of an electronic ballot, how members may access electronic voting facilities.

The prescribed amount

36

(1) For the purposes of this Part of this Schedule, the “prescribed amount” is £100 or such other amount as the Treasury by order specify for the time being.

(2) The power to make an order under sub-paragraph (1) above shall be exercisable by statutory instrument subject to annulment in pursuance of a resolution of either House of Parliament.

(3) An order under sub-paragraph (1) above may contain transitional, consequential or supplementary provision.

SCHEDULE 3

Part I — Preliminary

1

In this Schedule—

“authorisation” means authorisation under section 9 or on renewal under section 41 or reauthorisation under section 44;

“conditions” means conditions to be complied with by a building society and imposed on the grant of authorisation under section 9, on the renewal of authorisation under section 41, on reauthorisation under section 44 or under section 42;

“revocation", with reference to authorisation, means revocation under section 43.

Part II — Authorisation

Procedure for authorization

2

(1) An application for authorisation—

(a) shall be made in such manner as the Commission may specify, either generally or in any particular case; and

(b) shall be accompanied by such information as the Commission may reasonably require, either generally or in any particular case, in order to decide whether or not to grant authorisation and whether with or without conditions.

(2) If required to do so by notice from the Commission given at any time after an application for authorisation has been made and before a decision has been reached on the application, the applicant shall furnish to the Commission such additional information as it may reasonably require in order to reach a decision on the application.

(3) If on an application for authorisation the Commission proposes to impose conditions the provisions of Part III of this Schedule shall apply.

(4) If the Commission proposes to refuse to grant authorisation it shall serve a notice on the applicant stating—

(a) that it proposes to refuse to grant authorisation;

(b) the grounds for the proposed refusal; and

(c) that the applicant may make representations with respect to the proposed refusal within such period of not less than 28 days as may be specified in the notice and that, if the applicant so requests, the Commission will afford to it an opportunity of being heard by the Commission within that period.

(5) If the grounds for the proposed refusal include the ground that any officer of the society is not a fit and proper person to hold office in the society the Commission shall also serve the notice specified in sub-paragraph (4) above on the officer concerned giving him the like right to make representations and to be heard with respect to his fitness and propriety for office.

(6) The Commission shall, before reaching a decision on the application, consider any representations made to it in accordance with sub-paragraph (4) or (5) above.

(7) If, on an application for authorisation, the Commission refuses to grant authorisation it shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society, and every other person on whom a notice was served under sub-paragraph (5) above, a notice stating the Commission’s decision and the grounds for it and, subject to sub-paragraph (8) below, shall do so before the expiry of the period of 6 months beginning with the date on which the application was received.

(8) In any case where, under sub-paragraph (2) above, the Commission requires additional information with respect to an application, the latest time for the giving of a notice under sub-paragraph (7) above with respect to the application shall be the expiry of whichever of the following periods first expires, namely—

(a) the period of 6 months beginning with the date on which the additional information is furnished to the Commission; and

(b) the period of 12 months beginning with the date on which the application was received by the Commission.

(9) In the application of this paragraph to an application for the renewal of authorisation under section 41—

(a) sub-paragraph (7) shall have effect with the substitution of 3 for 6 months; and

(b) sub-paragraph (8) shall have effect with the substitution of 3 for 6 months and of 6 for 12 months respectively.

Offences in connection with application

3

(1) Any building society which furnishes any information or makes any statement which is false or misleading in a material particular in connection with an application for authorisation shall be liable, on conviction on indictment or on summary conviction, to a fine which, on summary conviction, shall not exceed the statutory maximum.

(2) Any person who knowingly or recklessly furnishes any information or makes any statement which is false or misleading in a material particular in connection with an application for authorisation shall be liable—

(a) on conviction on indictment, to imprisonment for a term not exceeding two years or to a fine or both; or

(b) on summary conviction, to a fine not exceeding the statutory maximum.

Part III — Imposition of Conditions

4

(1) If the Commission proposes to impose conditions it shall serve on the society and, subject to paragraph 10 below, on every director of the society and its chief executive a notice stating—

(a) that the Commission proposes to impose conditions;

(b) what the conditions will be;

(d) that the society may make representations with respect to the proposed imposition of the conditions within such period of not less than 14 days as may be specified in the notice and that, if the society so requests, the Commission will afford to it an opportunity of being heard by the Commission within that period.

(2) If any condition proposed to be imposed on the society includes a requirement for the removal from office of any officer of the society the Commission shall also serve the notice specified in sub-paragraph (1) above on the officer whose removal is proposed giving him the like right to make representations and to be heard with respect to his proposed removal from office.

(3) The Commission shall, before reaching a decision on whether to impose conditions and, if so, what conditions, consider any representations made in accordance with sub-paragraph (1) or (2) above and, except where paragraph 5 below applies, the Commission shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (2) above, a notice stating its decision.

(4) If the Commission decides to impose conditions the notice under sub-paragraph (3) above shall—

(a) specify the conditions, and

(b) state the grounds for its decision to impose them.

(5) The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (1) above.

5

(1) This paragraph applies where the Commission has decided to impose conditions but proposes to impose conditions different from and more onerous than those stated in the notice served by the Commission under paragraph 4(1) above.

(2) The Commission shall serve on the society and, subject to paragraph 10 below, on every director of the society and its chief executive, a notice stating—

(a) what conditions the Commission proposes to impose;

(b) the grounds for the imposition of those conditions instead of the conditions stated in the notice under paragraph 4(1) above; and

(c) that the society may make representations with respect to the conditions the Commission proposes to impose within such period of not less than seven days as may be specified in the notice and that, if the society so requests, the Commission will afford to it an opportunity of being heard by the Commission within that period.

(3) If any condition proposed to be imposed on the society includes a requirement for the removal from office of any officer of the society the Commission shall also serve the notice specified in sub-paragraph (2) above on the officer whose removal is proposed giving him the like right to make representations and to be heard with respect to his proposed removal from office.

(4) The Commission shall, before reaching a decision on whether to impose conditions different from those stated in the notice served under paragraph 4(1) above and, if so, what conditions, consider any representations made in accordance with sub-paragraph (2) or (3) above and shall serve on the society and subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (3) above, a notice stating its decision.

(5) If the Commission decides to impose conditions the notice under sub-paragraph (4) above shall—

(a) specify the conditions, and

(b) state the grounds for their imposition.

(6) The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (2) above.

Part IV — Revocation of Authorisation

Procedure for revocation

6

(1) If the Commission proposes to revoke a society’s authorisation it shall serve on the society and, subject to paragraph 10 below, on every director and its chief executive a notice stating—

(a) that the Commission proposes to revoke the authorisation

(b) the grounds for the proposed revocation; and

(c) that the society may make representations with respect to the proposed revocation within such period of not less than 14 days as may be specified in the notice and that, if the society so requests, it will be afforded an opportunity of being heard by the Commission within that period.

(2) If the grounds for the proposed revocation include the ground that any officer of the society is not a fit and proper person to hold office in the society the Commission shall also serve the notice specified in sub-paragraph (1) above on the officer concerned giving him the like right to make representations and to be heard with respect to his fitness and propriety for office.

(3) The Commission shall, before reaching a decision on whether to revoke the authorisation, consider any representations made to it in accordance with sub-paragraph (1) or (2) above and, except where paragraph 7 below applies the Commission shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (2) above, a notice stating its decision.

(4) If the Commission decides to revoke a society’s authorisation, the notice under sub-paragraph (3) above shall state the grounds for the decision.

(5) The Commission may not revoke a society’s authorisation on grounds other than those stated, or grounds included in those stated, in the notice served under sub-paragraph (1) above.

7

(1) This paragraph applies where the Commission proposes, instead of revoking a society’s authorisation, to impose conditions.

(2) The Commission shall serve on the society and, subject to paragraph 10 below, on every director of the society and its chief executive a notice stating—

(a) that it proposes to impose conditions instead of revoking the society’s authorisation;

(b) what conditions it proposes to impose;

(d) that the society may make representations with respect to the conditions the Commission proposes to impose within such period of not less than seven days as may be specified in the notice and that, if the society so requests, it will be afforded an opportunity of being heard by the Commission within that period.

(3) If any condition proposed to be imposed on the society includes a requirement for the removal from office of any officer of the society, the Commission shall also serve the notice specified in sub-paragraph (2) above on the officer whose removal is proposed giving him a like right to make representations and to be heard with respect to his proposed removal from office.

(4) The Commission shall, before reaching a decision on whether to impose conditions and, if so, what conditions, consider any representations made in accordance with sub-paragraph (2) or (3) above and, except where paragraph 8 below applies, the Commission shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (3) above, a notice stating its decision.

(5) If the Commission decides to impose conditions the notice under sub-paragraph (4) above shall—

(a) specify the conditions, and

(b) state the grounds for their imposition.

(6) The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by the Commission under sub-paragraph (2) above.

8

(1) This paragraph applies where the Commission has decided, instead of revoking a society’s authorisation, to impose conditions but proposes to impose conditions different from and more onerous than those stated in the notice served by the Commission under paragraph 7(2) above.

(2) The Commission shall serve on the society and, subject to paragraph 10 below, on every director of the society and its chief executive, a notice stating—

(a) what conditions it proposes to impose;

(b) the grounds for the imposition of those conditions instead of the conditions stated in the notice under paragraph 7(2) above; and

(c) that the society may make representations with respect to the conditions the Commission proposes to impose within such period of not less than seven days as may be specified in the notice and that, if the society so requests, the Commission will afford to it an opportunity of being heard by the Commission within that period.

(3) If any condition proposed to be imposed on the society includes a requirement for the removal from office of any officer of the society the Commission shall also serve the notice specified in sub-paragraph (2) above on the officer whose removal is proposed giving him the like right to make representations and to be heard with respect to his proposed removal from office.

(4) The Commission shall, before reaching a decision on whether to impose conditions different from those stated in the notice served under paragraph 7(2) above and, if so, what conditions, consider any representations made in accordance with sub-paragraph (2) or (3) above and shall serve on the society and, subject to paragraph 10 below, on every director of and the chief executive of the society and every other person on whom a notice was served under sub-paragraph (3) above, a notice stating its decision.

(5) If the Commission decides to impose conditions the notice under sub-paragraph (4) above shall—

(a) specify the conditions, and

(b) state the grounds for their imposition.

(6) The Commission may not impose conditions on grounds other than those stated, or grounds included in those stated, in the notice served by it under sub-paragraph (2) above.

Part V — Supplementary

Imposition of conditions on appeal

9

(1) The modifications of the provisions of Part III of this Schedule in their application to the imposition of conditions by the Commission in pursuance of a direction of an appeal tribunal under section 47(6) or (7) are as follows.

(2) The notice under paragraph 4(1) shall be served on the society and the other persons there specified within the period of 14 days beginning with the date on which the Commission received notice of the tribunal’s decision under subsection (10) of that section; and a copy shall also be sent within that period to the tribunal.

(3) The notice under paragraph 4(1) may specify, as the period within which representations may be made, a period of not less than 7 days.

(4) If the Commission serves a notice under paragraph 5(2) on the society and the other persons there specified it shall send a copy of the notice to the tribunal.

Notice to directors and chief executives

10

Where any provision of this Schedule requires notice of any matter to be served on every director of a building society that requirement is satisfied by serving notice on each director whose appointment has been officially notified and the non-receipt of a notice of a matter by a director or the chief executive does not affect the validity of any action on the part of the Commission.

SCHEDULE 4

Provisions as to sale of mortgaged property

1

(1) Where any land has been mortgaged to a building society as security for an advance and a person sells the land in the exercise of a power (whether statutory or express) exercisable by virtue of the mortgage, it shall be his duty—

(a) in exercising that power, to take reasonable care to ensure that the price at which the land is sold is the best price that can reasonably be obtained, and

(b) within 28 days from the completion of the sale, to send to the mortgagor at his last-known address by the recorded delivery service a notice containing the prescribed particulars of the sale.

(1A) Sub-paragraph (1)(b) above shall not apply where the person selling the land has reasonable cause to believe that communications sent to the mortgagor at his last-known address are unlikely to be received by him.

(2) In so far as any agreement relieves, or may have the effect of relieving, a building society or any other person from the obligation imposed by sub-paragraph (1)(a) above, the agreement shall be void.

(3) Breach by a building society or any other person of the duty imposed by sub-paragraph (1)(b) above, if without reasonable excuse, shall be an offence.

(4) Any person guilty of an offence under sub-paragraph (3) above shall be liable on summary conviction—

(a) to a fine not exceeding level 2 on the standard scale and

(b) to an additional fine for each week during which the offence continues not exceeding £10,

and, in relation to such an offence on the part of a building society, so shall any officer who is also guilty of the offence.

(5) Nothing in this section shall affect the operation of any rule of law relating to the duty of a mortgagee to account to his mortgagor.

(6) In sub-paragraph (1) above “mortgagor”, in relation to a mortgage in favour of a building society, includes any person to whom, to the knowledge of the person selling the land, any of the rights or liabilities of the mortgagor under the mortgage have passed, whether by operation of law or otherwise.

Discharge of mortgages

2

(1) When all money intended to be secured by a mortgage given to a building society has been fully paid or discharged, the society may endorse on or annex to the mortgage one or other of the following—

(a) a receipt in the prescribed form under the society’s seal, countersigned by any person acting under the authority of the board of directors;

(b) a reconveyance of the mortgaged property to the mortgagor;

(c) a reconveyance of the mortgaged property to such person of full age, and on such trusts (if any), as the mortgagor may direct.

(2) Where in pursuance of sub-paragraph (1) above a receipt is endorsed on or annexed to a mortgage, not being a charge or incumberance registered under the Land Registration Act 1925, the receipt shall operate in accordance with section 115(1), (3), (6) and (8) of the Law of Property Act 1925 (discharge of mortgages by receipt) in the like manner as a receipt which fulfills all the requirements of subsection (1) of that section.

(3) Section 115(9) of the Law of Property Act 1925 shall not apply to a receipt in the prescribed form endorsed or annexed by a building society in pursuance of sub-paragraph (1) above; and in the application of that subsection to a receipt so endorsed or annexed which is not in that form, the receipt shall be taken to be executed in the manner required by the statute relating to the society if it is under the society’s seal and countersigned as mentioned in sub-paragraph (1)(a) above.

(4) The foregoing sub-paragraphs shall, in the case of a mortgage of registered land, have effect without prejudice to the operation of the Land Registration Act 1925 or any rules in force under it.

(5) In this paragraph—

“mortgage” includes a further charge;

“the mortgagor”, in relation to a mortgage, means the person for the time being entitled to the equity of redemption; and

“registered land” has the same meaning as in the Land Registration Act 1925.

(6) This paragraph does not apply to Scotland.

(7) In the application of this paragraph to Northern Ireland—

(a) in sub-paragraph (1) for the words “on such trusts" there shall be subsituted the words “on such uses";

(b) in sub-paragraph (2)—

(i) for the words from “charge" to “Property Act 1925" there shall be substituted the words “on registered land, the receipt to operate (N.I.9). in accordance with Article 3(1), (7) and (9) of the Property (Discharge of Mortgage by Receipt) (Northern Ireland) Order 1983"; and

(ii) for the words “subsection (1) of that section" there shall be subsituted the words “paragraph (1) of that Article";

(3) If the mortgage is registered in accordance with the Registration of Deeds Act (Northern Ireland) 1970, the registrar under that act shall— (a) on production of the receipt mentioned in sub-paragraph (1) above make a note in the Abstract Book against the entry relating to the mortgage that the mortgage is satisfied; and (b) grant a certificate, either on the mortgage or separately, that the mortgage is satisfied. (4) The certificate granted under sub-paragraph (3)(b) above shall— (a) be received in all courts and proceedings without further proof; and (b) have the effect of clearing the register of the mortgage.

;

(d) in sub-paragraph (5) for the definition of “registered land" there shall be substituted the following definition—

“registered land” means land the title to which is registered under Part III of the Land Registration Act (Northern Ireland) 1970;

Power to prescribe form of documents

3

(1) The Chief Registrar may make rules for prescribing anything authorised or required by any provision of this Schedule to be prescribed; and in this Schedule “prescribed” means prescribed by rules made under this paragraph.

(2) The power to make rules under this paragraph shall be exercisable by statutory instrument.

SCHEDULE 5

Constitution

1

(1) The Board shall consist of seven members as follows, namely—

(a) the First Commissioner for the time being, who shall be the chairman of the Board,

(b) two members appointed by the First Commissioner from among the other members of the Commission, and

and the First Commissioner shall appoint one of his two appointees to be deputy chairman of the Board.

(2) The four members to be appointed under this sub-paragraph shall be appointed by the Treasury, after consultation with the First Commissioner, and of those four, three shall be persons who are or have been directors, chief executives or managers of building societies.

(3) Each appointed member of the Board may, with the approval of the First Commissioner and subject to sub-paragraph (4) below appoint an alternate member to perform his duties as a member in his absence.

(4) In the case of a person appointed a member of the Board as a present or former director, chief executive or manager of a building society any alternate shall himself be or have been such a director, chief executive or manager.

Appointment and tenure of office

2

(1) Subject to the following provisions of this paragraph a person shall hold and vacate office as a member or as deputy chairman of the Board in" accordance with the terms of the instrument appointing him.

(2) A person appointed by the First Commissioner under paragraph 1(1)(b) above shall vacate his office as a member of the Board if he ceases to be a member of the Commission and the person appointed by the First Commissioner to be deputy chairman of the Board shall vacate his office as such in the same event.

(3) A person appointed under paragraph 1(2) above shall be appointed for a term not exceeding two years but he may be reappointed on his ceasing to hold office or at any time thereafter.

(4) A person appointed under paragraph 1(2) above may at any time resign his office as a member by giving to the Treasury a signed notice stating that he resigns from that office.

Allowances

3

The Board shall pay to each member such allowances in respect of expenses as the Board may, with the consent of the Treasury, determine.

Proceedings

4

(1) The Board shall determine its own procedure, including the quorum necessary for its meetings.

(2) The validity of any proceedings of the Board shall not be affected by any vacancy among the members or by any defect in the appointment of any member.

5

(1) The fixing of the common seal of the Board shall be authenticated by the signature of the chairman of the Board or some other person authorised by the Board to act for that purpose.

(2) A document purporting to be duly executed under the seal of the Board shall be received in evidence and deemed to be so executed, unless the contrary is proved.

Accounts, audit and annual report

6

(1) The Board may determine its own financial year.

(2) It shall be the duty of the Board—

(a) to keep proper accounts and proper records in relation to the accounts; and

(b) to prepare in respect of any period (referred to in this paragraph as “the initial period”) beginning with the commencement date for section 24 and ending with the beginning of the Board’s first financial year and in respect of each of its financial years a statement of accounts showing the state of affairs and income and expenditure of the Board.

(3) A statement of accounts prepared in accordance with sub-paragraph (2)(b) above shall be audited by auditors appointed by the Board and the auditors shall report to the Board stating whether in their opinion the provisions of sub-paragraph (2) above have been complied with.

(4) A person shall not be appointed as auditor by the Board unless he is eligible for appointment as a company auditor under section 25 of the Companies Act 1989.

(5) It shall be the duty of the Board, as soon as possible after the end of the initial period and of each of its financial years, to prepare a report on the discharge of its functions during that period or, as the case may be, during that financial year.

(6) It shall be the duty of the Board to publish, in such manner as it thinks appropriate, every statement of account prepared in accordance with sub-paragraph (2)(b) above and every report prepared in accordance with sub-paragraph (5) above.

SCHEDULE 6

1

(1) The following provisions of this Schedule have effect for the purposes of section 27.

(2) In this Schedule “investment”, in relation to a building society, means the rights of a person arising from a deposit made by him, or a predecessor in title of his, with the society or the interest of a person constituted by a share of his in the society; and that person is referred to as holding, or as the holder of, the investment.

2

(1) Where any persons hold an investment in a building society as trustees then, unless the investment is held on trust for a person absolutely entitled to it as against the trustees, the trustees shall be treated as a single and continuing body of persons, distinct from the persons who may from time to time be the trustees and if the same persons hold different investments as trustees under different trusts, they shall be treated as a separate and distinct body with respect to each of those trusts.

(2) For the purpose of this Schedule an investment is held on trust for a person absolutely entitled to it as against the trustees where that person has the exclusive right, subject only to satisfying any outstanding charge, lien or other right of the trustees to resort to the investment for payment of duty, taxes, costs or other outgoings, to direct how the investment shall be dealt with.

(3) Any reference in sub-paragraph (1) or (2) above to a person absolutely entitled to an investment as against the trustees includes a reference to two or more persons who are so entitled jointly; and in the application of sub-paragraph (2) to Scotland the words from “subject" to “outgoings” are omitted.

3

Where an investment is held on trust for any person absolutely entitled to it, or as the case may be, for two or more persons so entitled jointly, that person or, as the case may be, those persons jointly shall be treated as entitled to the investment without the intervention of any trust.

4

(1) Except in the case of a partnership, where two or more persons are jointly entitled to an investment and paragraph 2(1) above does not apply, each of them shall be treated as having a separate investment of an amount produced by dividing the amount of the investment to which they are jointly entitled by the number of persons who are so entitled.

(2) Where two or more persons hold, or are absolutely entitled to, an investment as partners, the partnership shall be treated as holding, or as being absolutely entitled to, the investment as a single person distinct from the persons of whom the partnership is composed.

5

Where an investment is made by a person whose business is the provision of professional services or the carrying on of investment business (within the meaning of the Financial Services Act 1986) with money held to the account of clients of his, each of them shall be treated as having a separate investment of an amount equal to so much of the amount of the investment as represents money held to his account as a client.

6

The Board may decline to make any payment under section 27 in respect of an investment until the person claiming to be entitled to it informs the Board of the capacity in which he is entitled to the investment; and if it appears to the Board—

(a) that the persons entitled to an investment are so entitled as trustees, or

(b) that paragraph 3 above applies to an investment, or

(d) that paragraph 5 above applies to an investment,

the Board may decline to make any payment in respect of the investment until sufficient information has been disclosed to it to enable it to determine what payment (if any) should be made under that section and to whom.

7

In this Schedule “jointly entitled” means—

(a) in England and Wales and Northern Ireland, beneficially entitled as joint tenants, tenants in common or as coparceners, and

(b) in Scotland, beneficially entitled as joint owners or owners in common.

SCHEDULE 7

Members or depositors dying

1

(1) The provisions of this paragraph have effect where a member of, or depositor with, a building society dies, testate or intestate, domiciled in any part of the United Kingdom leaving a sum of money in the funds of the society not exceeding £5000.

(2) If a person claiming to be beneficially entitled to the sum of money under the will or the applicable law of intestacy furnishes to the society—

(a) satisfactory evidence of the death, and

(b) a statutory declaration that the member or depositor has died and that the person claiming the amount is beneficially entitled under the will or the applicable law of intestacy to receive it,

the society may, without probate of the will or the grant of letters of administration or confirmation, as the case may be, pay the sum of money to that person.

(3) Where a building society has paid a sum of money to any person in reliance on evidence of death and a statutory declaration furnished as mentioned in sub-paragraph (2) above, the payment shall be valid and effectual with respect to any demand against the funds of the society from any other person claiming to be entitled to it but without prejudice to that other person’s pursuing his remedy for the amount against the person who received it.

(4) The Treasury may from time to time by order direct that this paragraph shall have effect as if for the reference in sub-paragraph (1) above to £5,000 there were substituted a reference to such higher amount as may be specified in the order.

(5) An order under sub-paragraph (4) above shall apply in relation to deaths occurring after the expiration of a period of one month beginning with the date on which the order comes into force.

(6) The power to make an order under sub-paragraph (4) above is exercisable by statutory instrument but no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.

Receipts by depositors under age

2

Any receipt or acknowledgment given to a building society by a person who is a minor in respect of the payment to him of any sum due in respect of a deposit made by him with the society, shall not be invalid on the ground of his minority.

SCHEDULE 8

Part I — The Services

1

Banking services.

2

Investment services.

3

Insurance services.

4

Trusteeship.

5

Executorship.

6

Land services.

7

Establishment and management of personal equity plans.

8

Arranging for the provision of credit, whether on behalf of the borrower or die person providing credit, and providing services in connection with current loan agreements to the party providing credit.

9

Establishment and management of unit trust schemes for the provision of pensions.

10

Establishment and, as regards the contributions and benefits, administration, of pension schemes.

11

Arranging for the provision of insurance of any description, whether on behalf of the person effecting or the person providing the insurance.

12

Giving advice as to insurance of any description.

13

Estate agency services.

14

Surveys and valuations of land.

15

Conveyancing services.

Part II — General Restrictions On Services

Part III — Restrictions In Relation To Certain Services

Money transmission

1

No guarantee arising out of the operation of an account by means of which money transmission services are provided shall exceed, for any single operation, the prescribed limit

Foreign exchange

2

The provision of foreign exchange services is restricted to their provision to individuals.

Estate management

3

Management of land is restricted to management of land which is or is to be used primarily for residential purposes or for purposes incidental to the use of adjoining land managed by the society which is or is to be used primarily for residential purposes.

4

The power to manage land is not available to a building society which does not for the time being have a qualifying asset holding.

Arranging for investment services

5

Arranging for the provision of investment services is restricted to their provision to individuals.

Personal equity plan management

6

(1) The power to establish and manage personal equity plans is available only to a subsidiary of the society.

(2) The power to establish and manage personal equity plans is available only while the society has a qualifying asset holding.

Arranging for provision of credit

7

Arranging for the provision of credit and connected services is restricted to their provision by recognised banks or licensed institutions or other bodies for the time being approved for the purposes of this Schedule by the Commission, whether in relation to all building societies or specified classes of building society.

8

Arranging for the provision of credit is restricted to its provision to individuals except where the loan to the borrower is to be secured by—

(a) a mortgage of a legal estate in land in England and Wales or Northern Ireland, or

(b) a heritable security over land in Scotland,

being a mortgage or heritable security to which no other, or no more than one other, mortgage or heritable security, as the case may be, will have priority.

Pensions management etc.

9

The power to establish and manage unit trust schemes is available only to a subsidiary of the society.

Arranging for insurance

10

Arranging for the provision of insurance is restricted to its provision primarily to individuals ; but this restriction does not apply to, nor in determining whether over any period insurance is being provided primarily to individuals is any account to be taken of income derived from, insurance relating to land which is to secure advances by the society.

Estate agency

11

The power to provide estate agency services is available only to a subsidiary of the society.

12

For the power to provide estate agency services to be available to the subsidiary of a building society, the following conditions must be fulfilled as regards the subsidiary and its business, that is to say—

(a) the subsidiary must have been formed in one of the following countries or territories, that is to say, the United Kingdom, a relevant British overseas territory or another member State and the principal business of the society must, at the time the society forms or acquires the subsidiary, be conducted in that country or territory ;

(b) 40 per cent, or more of its total income in any financial year (wherever arising) must be derived from estate agency work done in countries or territories in which the society, at any time in that year, carried on the business of making advances secured on land ; and

(c) its business must not include the lending of money, secured or unsecured, on its own account or the provision of any service which is a financial service for the purposes of this Schedule other than one which is for the time being specified in Part I of this Schedule.

13

No employee of a building society a subsidiary of which provides estate agency services shall act as agent for the subsidiary.

Part IV — Supplementary

Guarantees

1

(1) The Commission, with the consent of the Treasury, may by order prescribe a limit of such amount as it considers appropriate for the purposes of paragraph 1 of Part III of this Schedule and in that paragraph " the prescribed limit" means the limit for the time being in force under this paragraph.

(2) The power to make an order under this paragraph shall be exercisable by statutory instrument and any instrument so made shall be subject to annulment in pursuance of a resolution of either House of Parliament.

2

(1) Without prejudice to any other implied incidental power, the power conferred in Part I of this Schedule to provide money transmission services implies (subject to any specified restriction) power, as regards members as well as others, to give guarantees in relation to, or to permit occasional overdrawing on, accounts with the society.

(2) It shall be the duty of a building society which has become obliged by virtue of the provision of money transmission services under this Schedule to fulfill a guarantee on a person's account or has permitted an account to become overdrawn to recover as soon as practicable from the person the amount paid by it under the guarantee or, as the case may be, the amount due to it on the overdrawn account and any instrument embodying the guarantee.

Status as bankers

3

(1) So far as regards the provision by it of a service which is a qualifying banking service for the purposes of this paragraph a building society shall be treated for all purposes as a bank and a banker and as carrying on the business of banking or a banking undertaking whether or not it would be so treated apart from this paragraph.

(2) A building society provides a qualifying banking service for the purposes of this paragraph if, with or without any restriction, it provides either or both of the services falling within paragraph 1 or 3 of Part I.

(3) This paragraph does not affect the determination of any question as to the status of a building society as a bank or banker for other purposes.

Foreign exchange services to individuals

4

(1) For the purpose of determining whether a transaction consists in the provision of foreign exchange services to an individual it shall be presumed that a transaction does so consist if the value of the transaction is less than the standard amount.

(2) The standard amount is, subject to sub-paragraph (3) below, £5,000.

(3) The Commission, with the consent of the Treasury, may by order amend sub-paragraph (2) above so as to substitute for the amount for the time being specified in that sub-paragraph such other amount as it considers appropriate for the purposes of this paragraph.

(4) For the purposes of sub-paragraph (1) above the value of a transaction consisting in the provision of foreign exchange services is, where the society is selling the foreign currency, the sum paid to it and, where the society is purchasing the foreign currency, the sum paid by it.

Sanctions for breach of restrictions

5

If a person acts as agent in contravention of paragraph 13 of Part III of this Schedule he shall be liable on summary conviction to a fine not exceeding level 4 on the standard scale.

Interpretation

6

This Schedule is to be construed as relating only to the capacity of building societies to provide the services for the time being specified in it and not as making lawful any activity, whether of a building society or a subsidiary or other associated body of a building society, which would not be lawful apart from this Schedule.

7

In this Schedule—

" conveyancing services " has the same meaning as in Schedule 21 to this Act;

" estate agency work " has the same meaning as in the Estate Agents Act 1979 ;

" investment services " means services falling within paragraph 6 of Part I;

" mortgage investments " means investments consisting of rights arising out of advances secured on land;

" pension scheme" means a personal pension scheme (within the meaning of the Social Security Act 1986) or an occupational pension scheme (as defined in section 66(1) of the Social Security Pensions Act 1975 or in relation to Northern Ireland, Article 2(2) of the Social Security Pensions (Northern Ireland) Order 1975) and the " provision of pensions " means the provision of benefits which are "money par-chase benefits " within the meaning of that Act of 1986 ;

" personal equity plan " means a personal equity plan for the purposes of Schedule 8 to the Finance Act 1986 ;

"the principal business of a building society" means the business of raising funds (whether by the issue of shares or receiving deposits) for the purposes of the society or of making advances secured on land ;

" the prescribed limit", in relation to guarantees, has the meaning given by paragraph 1 of this Part;

"recognised bank" and "licensed institution" have the same meaning as in the Banking Act 1979 ;

" relevant British overseas territory " means any of the Channel Islands, the Isle of Man and Gibraltar ; and

" unit trust scheme " has the same meaning as in the Financial Services Act 1986.

SCHEDULE 9

Preliminary

1

In this Schedule—

“the financial year” means the financial year to which the statement under section 68(3) relates;

“restricted transaction or arrangement” means any transaction or arrangement falling within section 65(1) particulars of which are required to be included in that statement;

and other expressions have the same meaning as in those sections.

The requisite particulars

2

(1) The particulars of a restricted transaction or arrangement required by section 68(3) are particulars of the principal terms of the transaction or arrangement.

(2) Without prejudice to the generality of sub-paragraph (1) above, the following particulars of a restricted transaction or arrangement are required—

(a) a statement of the fact either that the transaction or arrangement was made or that it subsisted during the financial year;

(b) the name of the person from whom it was made and, where that person is or was connected with a director of the building society, the name of that director;

(i) the amount of the mortgage debt or corresponding liability both at the beginning and at the end of the financial year;

(ii) the maximum amount of that debt or liability during that year;

(iii) the amount of any interest which, having fallen due, has not been paid; and

(iv) the amount of any provision made in the accounts in respect of any failure or anticipated failure by the borrower to repay the whole or part of the loan or to pay the whole or part of any interest on it;

(d) in the case of a disposal of property by way of lease or hire—

(i) the value of the property;

(ii) the amount of any rental which, having fallen due, has not been paid; and

(iii) the amount of any provision made in the accounts in respect of any failure or anticipated failure by the lessee or hirer to pay the whole or part of the rent;

(e) in the case of any payment made on behalf of the director or person connected with him, the amount of the payment; and

(f) in the case of a guarantee or security—

(i) the amount for which the building society was liable under the guarantee or security both at the beginning and at the end of the financial year;

(ii) the maximum amount for which the society may become liable; and

(iii) any amount paid and any liability incurred by the society for the purposes of fulfilling the guarantee or security (including any loss incurred by reason of its enforcement).

SCHEDULE 10

Part I — Requisite Particulars Where no Adoption of Part II

Conveyancers

1

Where the business associate of the building society provides conveyancing services the requisite particulars of its business in any financial year are the following—

(a) the number of cases in which it has provided conveyancing services in respect of a loan secured on land and the purchase of the land both to the society and to the borrower;

(b) the number of cases in which it has provided the society (but not the borrower) with conveyancing services in respect of a loan secured on land;

(c) the aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of conveyancing services falling within sub-paragraphs (a) and (b) above;

(d) the aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e) the aggregate amount of any fees paid to it by the society in consideration of the provision of conveyancing services in respect of any land held by the society under section 6, 10, 17 or 19;

(f) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Valuers and surveyors

2

Where the business associate of the building society provides the services of surveying and valuing property the requisite particulars of its business in any financial year are the following—

(a) the number of cases in which it has, in respect of any land which is to secure a loan, surveyed the land or provided a valuation of it on behalf of the society or the borrower or both;

(b) the number of cases in which it has, on behalf of the society (but not the borrower), surveyed any land which is to secure a loan or provided the society with a valuation of it;

(c) the aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of the services falling within sub-paragraphs (a) and (b) above;

(d) the aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e) the aggregate amount of any fees paid to it by the society in consideration of the provision of surveying or valuing services in respect of any property held by the society under section 6, 10, 17 or 19;

(f) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Accountants

3

Where the business associate of the building society provides accountancy services the requisite particulars of its business in any financial year are the following—

(a) the aggregate amount of the fees paid to it by the society for the provision of accountancy services; and

(b) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Insurance agents, etc.

4

Where the business associate of the building society arranges for the provision of relevant insurance the requisite particulars of its business in any financial year are the following—

(a) the aggregate of the amounts paid to it by the society or by way of commission by insurers in respect of relevant insurance effected by the society or by borrowers in compliance with the terms on which loans secured on land are made by the society; and

(b) the aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Part II — Requisite Particulars on Adoption of This Part

Conveyancers

5

Where the business associate of the building society provides conveyancing services the requisite particulars of its business in any financial year are the following—

(a) the prescribed band within which falls the estimated number of cases in which it has provided conveyancing services in respect of a loan secured on land and the purchase of the land both to the society and to the borrower;

(b) the prescribed band within which falls the estimated number of cases in which it has provided the society (but not the borrower) with conveyancing services in respect of a loan secured on land;

(c) the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of conveyancing services falling within sub-paragraphs (a) and (b) above;

(d) the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e) the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of conveyancing services in respect of any land held by the society under section 6, 10, 17 or 19;

(f) the prescribed band within which falls the estimated aggregate of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Valuers and surveyors

6

Where the business associate of the building society provides the services of surveying and valuing property the requisite particulars of its business in any financial year are the following—

(a) the prescribed band within which falls the estimated number of cases in which it has, in respect of any land which is to secure a loan, surveyed the land or provided a valuation of it on behalf of the society or the borrower or both;

(b) the prescribed band within which falls the estimated number of cases in which it has, on behalf of the society (but not the borrower), surveyed any land which is to secure an advance or provided the society with a valuation of it;

(c) the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society or by or on behalf of the borrower for the provision of the services falling within sub-paragraphs (a) and (b) above;

(d) the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society by way of commission for its having introduced investment business to the society;

(e) the prescribed band within which falls the estimated aggregate of any fees paid to it by the society in consideration of the provision of surveying or valuing services in respect of any property held by the society under section 6, 10, 17 or 19;

(f) the prescribed band within which falls the estimated aggregate amounts of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Accountants

7

Where the business associate of the building society provides accountancy services the requisite particulars of its business in any financial year are the following—

(a) the prescribed band within which falls the estimated aggregate amount of the fees paid to it by the society for the provision of accountancy services; and

(b) the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Insurance agents, etc.

8

Where the business associate of the building society arranges for the provision of relevant insurance the requisite particulars of its business in any financial year are the following—

(a) the prescribed band within which falls the estimated aggregate of the amounts paid to it by the society or by way of commission by insurers in respect of relevant insurance effected by the society or by borrowers in compliance with the terms on which loans secured on land are made by the society; and

(b) the prescribed band within which falls the estimated aggregate amount of any fees paid to it by the society in consideration of the provision of administrative services to the society.

Part III — Supplementary

Power to prescribe bands for Part II particular

9

(1) The Treasury may by order prescribe, for the purposes of the provisions of Part II of this Schedule,—

(a) series of numbers by reference to limits specified in the order, or

(b) series of monetary amounts by reference to limits so specified;

and, in any provision of Part II, “prescribed band” means, in relation to cases, any series of numbers so prescribed for the purposes of that provision and, in relation to monetary amounts, any series of monetary amounts so prescribed for the purposes of that provision.

(2) The power conferred by this paragraph includes power to prescribe different series of numbers or of monetary amounts for the purposes of different provisions.

(3) The power to make an order under this paragraph is exercisable by statutory instrument which shall be subject to annulment in pursuance of a resolution of either House of Parliament.

Interpretation

10

(1) In this Schedule—

“administrative services” means services falling within section 69(4);

“business associate” and “associated”, in relation to a building society, have the same meaning as in section 69;

“financial year” means a financial year of the society with which the business associate is associated;

“prescribed band” has the meaning given by paragraph 9(1) above; and

“relevant insurance” means insurance falling within section 69(3)(d).

(2) In section 69, “the volume of the business”, in relation to any business constituted by the provision of any services referred to in any provision of Part I or Part II of this Schedule means—

(a) in the case of a paragraph of Part I, the aggregate of all the fees and commissions which are the subject of the requisite particulars under that paragraph; and

(b) in the case of a paragraph of Part II, the aggregate of the amounts which are specified in orders under paragraph 9 above as the upper limits of the prescribed bands within which fall the estimated aggregates of the fees or commissions or other amounts received which are the subject of the requisite particulars under the provisions of that paragraph

SCHEDULE 11

Appointment

1

(1) The first auditor of a building society may be appointed by the directors at any time before the first general meeting of the building society following the end of the society’s first financial year and an auditor so appointed shall hold office until the conclusion of that meeting.

(2) If the directors fail to exercise their powers under sub-paragraph (1) above those powers may be exercised by the building society in general meeting.

2

The directors, or the building society in general meeting, may fill any casual vacancy in the office of auditor; but while any such vacancy continues, the surviving or continuing auditor or auditors (if any) may act.

3

(1) If at any annual general meeting of a building society no auditor is appointed or re-appointed, the appropriate authority may appoint a person to fill the vacancy; and the society shall, within one week of the power of the appropriate authority becoming exercisable, give notice to the FCA and, if the society is a PRA-authorised person, to the PRA of that fact.

(2) If a building society fails to give the notice required by sub-paragraph (1) above 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 continuesX;

and so shall any officer who is also guilty of the offence.

4

(1) A resolution at a general meeting of a building society—

(a) appointing as auditor a person other than a retiring auditor; or

(b) filling a casual vacancy in the office of auditor; or

(d) removing an auditor before the expiration of his term of office,

shall not be effective unless notice of the intention to move it has been given to the society not less than twenty-eight days before the meeting at which it is moved.

(2) A building society shall give to its members notice of any such resolution at the same time and in the same manner as it gives notice of the meeting, or, if that is not practicable, shall give them notice of the resolution, not less than twenty-one days before the meeting, either by advertisement in a newspaper having an appropriate circulation or in any other way allowed by the rules of the society.

(3) On receipt of notice of such an intended resolution as is mentioned above the society shall forthwith send a copy of it—

(a) to the person proposed to be appointed or removed, as the cae may be;

(b) in a case within sub-paragraph (1)(a), to the retiring auditor; and

(c) where, in a case within sub-paragraph (1)(b) or (c), the casual vacancy was caused by the resignation of an auditor, to the auditor who resigned.

(4) Where notice is given of such a resolution as is mentioned in sub-paragraphs (1)(a) or (d) and the retiring auditor, or (as the case may be) the auditor proposed to be removed, makes with respect to the intended resolution representations, in writing to the society (not exceeding a reasonable length) and requests their notification to the members, the society shall (unless the representations are received by it too late to do so)—

(a) in any notice of the resolution given to members, state the fact of the representations having been made, and

(b) send a copy of the representations to every member to whom notice of the meeting is or has been sent.

(5) if a copy of such representations is not sent out as required by sub-paragraph (4) above because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the representations shall be read out at the meeting.

(6) The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of any representations made to it under sub-paragraph (4) above, apply in accordance with sub-paragraph (7) or (8) below to—

(a) the High Court, or

(b) the appropriate authority ,

for an order that copies of the representations need not or, as the case may be, shall not be sent out nor the representations read out at the meeting.

(7) An application under this sub-paragraph is an application to the High Court on the ground that the auditor is abusing the rights conferred by sub-paragraph (4) above to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is so abusing those rights it may by order direct that copies of the representations need not be sent out nor the representations read out at the meeting; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor notwithstanding that he is not a party to the application.

(8) An application under this sub-paragraph is an application to the appropriate authority on the ground that the sending out of copies of or the reading out at the meeting of the representations would be likely to diminish substantially the confidence in the society of investing members of the public and if the appropriate authority is satisfied that the sending out of copies of the representations or the reading of them would have that effect it shall by order direct that copies of the representations shall not be sent out nor the representations read at the meeting.

(9) The building society shall—

(a) if the High Court makes an order under sub-paragraph (7) above or the appropriate authority makes an order under sub-paragraph (8) above, send within fourteen days of the decision a statement setting out the effect of the order to the persons mentioned in sub-paragraph (4)(b) above; and

(b) if not, either send a copy of the written representations made under sub-paragraph (4) above to those persons or cause the representations to be read out at the meeting.

(9A) Sub-paragraphs (9B) and (9C) apply where—

(a) a copy of representations is required to be sent under sub-paragraph (4)(b) or (9)(b); or

(b) a statement is required to be sent under sub-paragraph (9)(a).

(9B) Where a copy of representations or a statement is required to be sent to a member—

(a) it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b) the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (9C) are satisfied.

(9C) The conditions of this sub-paragraph are satisfied in the case of a copy of representations or a statement if—

(a) the society and the member have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b) the agreement applies to the representations or statement in question;

(i) the publication of the copy of the representations or the statement on a web site,

(ii) the address of that web site,

(iii) the place on that web site where the representations or statement may be accessed, and how it may be accessed,

and where the notification concerns the publication of a statement required to be sent by sub-paragraph (9)(a), the member is notified within the period specified in that paragraph; and

(d) the copy of the representations or the statement is published continuously on that web site throughout the period beginning with the date on which notification is given in accordance with paragraph (c) and ending with the conclusion of the meeting.

(10) If default is made in complying with sub-paragraph (4) or (9) above the building society shall be liable—

(a) on conviction on indictment to a fine; or

(b) on summary confiction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding one tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues;

and so shall any officer who is also guilty of the offence.

(10A) Where, in a case in which sub-paragraph (9A)(b) is relied on for compliance with a requirement of sub-paragraph (4) or (9)—

(a) a copy of representations or a statement is published on a web site for a part, but not all, of the period mentioned in sub-paragraph (9C)(d), but

(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under sub-paragraph (10) by reason of that failure.

Qualification and disqualification of auditors

5

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Removal of auditors

6

(1) A building society may by resolution in general meeting remove an auditor before the expiration of his term of office, notwithstanding anything in any agreement between it and him.

(2) Where a resolution removing an auditor is passed at a general meeting of a building society, the society shall within 14 days give notice of that fact to the FCA and, if the society is a PRA-authorised person, the PRA .

(3) If a building society fails to give the notice required by s ub-paragraph (2) above the society shall be liable on summary conviction to a fine not exceeding level 3 on the standard scale and, 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 every officer who is also guilty of the offence.

(4) Nothing in this paragraph is to be taken as depriving a person removed under it of compensation or damages that may be payable to him in respect of the termination of his appointment as auditor.

(5) An auditor may not be removed from office before the expiration of that auditor's term of office except—

(a) by resolution under this paragraph, or

(b) in accordance with paragraph 6ZA.

Resignation of auditors

7

(1) An auditor of a building society may resign his office by depositing a notice to that effect at the principal office of the society; and any such notice operates to bring his term of office to an end on the date on which the notice is deposited, or on such later date as may be specified in it.

(2) An auditor’s notice of resignation shall not be effective unless it contains either—

(a) a statement to the effect that there are no circumstances connected with his resignation which he considers should be brought to the notice of the members of, or depositors with, the society, or

(b) a statement of any such circumstances as are mentioned above.

(3) Where a notice under this paragraph is deposited at the principal office of a building society it shall within fourteen days send a copy of that notice—

(a) to the FCA and, if the society is a PRA-authorised person, the PRA , and

(b) if the notice contains a statement under sub-paragraph (2)(b) above, to every person who under section 76(8) is entitled to receive a copy of the summary financial statement.

(4) The building society or any person claiming to be aggrieved may, within fourteen days of the receipt by the society of a notice containing a statement under sub-paragraph (2)(b), apply in accordance with sub-paragraph (5) or (6) below to—

(a) the High Court; or

(b) the appropriate authority ,

for an order that copies of the notice need not or, as the case may be, shall not be sent out.

(5) An application under this sub-paragraph is an application to the High Court on the ground that the auditor is using the notice to secure needless publicity for defamatory matter, and if the court is satisfied that the auditor is using the notice for that purpose it may by order direct that copies of it need not be sent out; and the court may further order the society’s costs on the application to be paid in whole or in part by the auditor, notwithstanding that he is not a party to the application.

(6) An application under this sub-paragraph is an application to the appropriate authority on the ground that the sending out of the notice would be likely to diminish substantially the confidence in the society of investing members of the public; and if the appropriate authority is satisfied that the sending out of the notice would be likely to have that effect it shall by order direct that copies of it shall not be sent out.

(7) The building society shall, within fourteen days of the decision of the High Court or of the appropriate authority , send to the persons mentioned in sub-paragraph (3)—

(a) if the court makes an order under sub-paragraph (5) above or the appropriate authority makes an order under sub-paragraph (6), a statement setting out the effect of the order; and

(b) if not, a copy of the notice containing the statement under sub-paragraph (2)(b).

(7A) Sub-paragraphs (7B) and (7C) apply where—

(a) the reference to a notice containing a statement under sub-paragraph (2)(b) is required to be sent to a person under sub-paragraph (3)(b) or sub-paragraph (7)(b); or

(b) a statement is required to be sent under sub-paragraph (7)(a).

(7B) Where a notice or a statement is required to be sent to a person, the notice or statement may be sent to him electronically only if—

(a) in a case where a person mentioned in sub-paragraph (3)(b) has notified the society of an electronic address for the purpose of this paragraph, it is sent to that address; or

(b) in a case where no electronic address has been notified for the purpose of this paragraph, it is sent to an electronic address notified by him for the purpose of subsection (8B) of section 76 (electronic address for the reception of summary financial statement for members and depositors).

(7C) The requirement to send a notice or a statement shall also be treated as satisfied if—

(a) the society and a person mentioned in sub-paragraph (3)(b) have agreed that information that is required to be sent to him may instead be accessed by him on a web site;

(b) the agreement applies to the notice or statement in question;

(i) the publication of the notice or statement on a web site,

(ii) the address of that web site, and

(iii) the place on that web site where the notice or statement may be accessed, and how it may be accessed; and

(d) the notice or statement is published on the web site throughout a period of at least 14 days, beginning with the day on which the person is notified in accordance with paragraph (c).

(8) If default is made in complying with sub-paragraph (3) or sub-paragraph (7) the building society shall be liable—

(a) on conviction on indictment to a fine; or

(b) on summary conviction to a fine not exceeding the statutory maximum and, in the case of a continuing offence, to a fine not exceeding one tenth of the statutory maximum one-tenth of the greater of £5,000 or the amount corresponding to level 4 on the standard scale for summary offences for every day during which the offence continues;

and so shall any officer who is also guilty of the offence.

(8A) Where, in a case in which sub-paragraph (7C) is relied on for compliance with a requirement under sub-paragraph (3) or (7)—

(a) a notice or a statement is published for a part, but not all, of the period mentioned in sub-paragraph (7C)(d), but

(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

no offence is committed under sub-paragraph (8) by reason of that failure.

8

(1) Where an auditor’s notice of resignation contains a statement under paragraph 7(2)(b) above he may also deposit at the principal office of the society a requisition signed by him calling on the directors of the society forthwith duly to convene a special general meeting of the society for the purpose of receiving and considering such explanation of the circumstances connected with this resignation as he may wish to place before the meeting.

(2) Where an auditor’s notice of resignation contains such a statement the auditor may request the society to send to its members—

(a) before the general meeting at which his term of office would otherwise expire or expires, as the case may be; or

(b) before any general meeting at which it is proposed to fill the vacancy caused by his resignation,

a statement in writing (not exceeding a reasonable length) of the circumstances connected with his resignation.

(3) The society shall in that case (unless the statement is received by it too late for it to comply)—

(a) in any notice of the meeting given to members state the fact of the statement having been made, and

(b) send a copy of the statement to every member to whom notice of the meeting is or has been sent.

(3A) Where a copy of a statement is required to be sent to a member under sub-paragraph (3)(b)—

(a) it may be sent to him electronically only if it is sent to an electronic address notified by the member for the purpose; but

(b) the requirement to send it shall also be treated as satisfied if the conditions set out in sub-paragraph (3B) are satisfied.

(3B) The conditions of this sub-paragraph are satisfied in the case of a copy of a statement if—

(a) the society and the member have agreed that information which is required to be sent to him may instead be accessed by him on a web site;

(b) the agreement applies to the statement in question;

(i) the publication of the statement on a web site,

(ii) the address of that web site, and

(iii) the place on that web site where the notice may be accessed, and how it may be accessed; and

(d) the statement is published continuously on that web site throughout the period beginning with the giving of that notification and ending with the conclusion of the meeting.

(3C) Where, in a case in which sub-paragraph (3A)(b) is relied on for compliance with a requirement under sub-paragraph (3)(b)—

(a) a statement is published for a part, but not all, of the period mentioned in subparagraph (3B)(d), but

(b) the failure to publish it throughout that period is wholly attributable to circumstances which it would not be reasonable to have expected the society to prevent or avoid,

that failure shall not invalidate the proceedings of the meeting.

(4) If the directors of the society do not within 21 days from the date of the deposit of a requisition under this paragraph proceed duly to convene a meeting for a day not more than 28 days after the date on which the notice convening the meeting is given, every director who failed to take all reasonable steps to secure that a meeting was so convened shall be liable—

(a) on conviction on indictment to a fine; or

(b) on summary conviction to a fine not exceeding the statutory maximum.

(5) If a copy of the statement mentioned in sub-paragraph (2) is not sent out as required by sub-paragraph (3) because it was received too late or because of the society’s default, the auditor may (without prejudice to his right to be heard orally) require that the statement be read out at the meeting.

(6) Copies of a statement need not be sent out and the statement need not be read out at the meeting if—

(a) on an application made to the High Court by the society or a person aggrieved, the court is satisfied that the rights conferred by this paragraph are being abused to secure needless publicity for defamatory matter; or

(b) on an application to the PRA by the society or a person aggrieved, the PRA is satisfied that the circulating or reading out of the statement would be likely to diminish substantially the confidence in the society of investing members of the public.

(7) If the High Court makes an order under sub-paragraph (6)(a) above it may also order the society’s costs of the application to be paid by the auditor notwithstanding that he is not a party to the application.

(8) An auditor who has resigned his office is entitled to attend any such meeting as is mentioned in sub-paragraph (2)(a) or (b) and to receive all notices of, and other communications relating to, any such meeting which any member of the society is entitled to receive, and to be heard at any such meeting which he attends on any part of the business of the meeting which concerns him as former auditor of the society.

9

In the application of this Schedule to Scotland, references to the High Court shall be read as references to the Court of Session.

SCHEDULE 12

Part I — Matters to be Provided for in Schemes

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

Administration

1

The establishment and functioning of an independent body (whether corporate or unincorporate) which is to administer the scheme.

2

The identity of the members.

3

The manner in which the expenses of the scheme are to be met by the members.

The adjudicator

4

The appointment of an independent adjudicator to conduct investigations under the scheme and his tenure of office and remuneration.

Scope of scheme

5

The matters action in relation to which is to be subject to investigation under the scheme and the grounds for making it subject to investigation.

Functions of adjudicator

6

The duty of the adjudicator to investigate, and make determinations on, actions duly referred for investigation.

7

The powers of, and procedure to be followed in the conduct of investigations by, the adjudicator.

8

The powers of the adjudicator on the making of determinations.

Determinations and their effects

9

The extent to which determinations are binding.

10

The manner in which determinations are to be communicated and published.

Reports by investigators to administering body

11

The making to the body administering the scheme of regular reports by the adjudicator as to the discharge of his functions, and their publication.

Amendment or revocation of scheme

12

The manner of amending or revoking the scheme.

Accession to membership

13

Accession to membership of other societies.

Withdrawal from membership

14

Withdrawal from membership.

Part II — Requirements for Recognised Schemes:Matters of Complaint

1

The operation or termination of a share account and the grant or refusal to grant a shareholder other facilities normally available to shareholders of his description.

Deposit accounts

2

The operation or termination of a deposit account and the grant or refusal to grant a depositor other facilities normally available to depositors of his description.

Borrowing members: class 1 or class 2 advances

3

The operation or termination of the account of a member borrowing on a class 1 or class 2 advance and the grant or refusal to grant a borrowing member of that description other or further class 1, or as the case may be, class 2 advances secured on the same or different land or other facilities normally available to borrowing members of his description.

Borrowers: mobile home loans

4

The operation or termination of the account of a borrower under section 15 and the grant or refusal to grant a borrower under that section other facilities normally available to borrowers of his description.

Borrowers: other loans

5

The operation or termination of the account of a borrower under section 16 and the grant or refusal to grant a borrower under that section other facilities normally available to borrowers of his description.

Money transmission services

6

The terms on which are provided, the operation of, or the withdrawal of money transmission services.

Foreign exchange facilities

7

The terms on which are provided, the operation of, or the withdrawal of foreign exchange services.

Agency payments and receipts

8

The terms on which payments are made or received as agents or the operation or withdrawal of the service.

Provision of credit

9

The operation or termination of the account of a borrower with the person providing the credit.

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