Table of Contents
Building Societies Act 1986 (c. 53)Introductory TextPart I Functions of the Financial Conduct Authority and the Prudential Regulation Authority (ss. 1-4)1. Functions of the Financial Conduct Authority and the Prudential Regulation Authority in relation to building societies.2. Financial provision for Commission.3. Accounts of Commission and audit.4. Annual and other reports.Part II Constitution of Building Societies (ss. 5-9B)Establishment (ss. 5-6)5. Establishment, constitution and powers.6. The lending limit.Making Loans (ss. 6A-6C)6A. Loans secured on land.6B. Loans fully secured on land.6C. Discharge of mortgages.Raising funds and borrowing (ss. 7-9)7. The funding limit.8. Proportion of liabilities to be in form of shares.9. Initial authorisation to raise funds and borrow money.Restrictions on powers (ss. 9A-9B)9A. Restrictions on certain transactions.9B. Restriction on creation of floating charges.Part III Advances, loans and other assets (ss. 10-23)Class 1 advances and class 2 advances secured on land (ss. 10-13)10. Advances secured on land.11. Class 1 and class 2 advances.12. Class 1 and class 2 advances: supplementary provisions.13. Security for advances: valuation and supplementary and related provisions.Other advances secured on land (ss. 14-14A)14. Power to make advances secured on land overseas.14A. Power to participate in secured syndicated lending.Other commercial assets (ss. 15-19)15. Loans for mobile homes.16. Power to lend to individuals otherwise than by class 1 or class 2 advances etc.17. Power to hold and develop land as commercial asset.18. Power to invest in subsidiaries and other associated bodies.19. Power for Treasury to add powers to hold other descriptions of class 3 assets.Commercial asset structure requirements (s. 20)20. Commercial asset structure requirements for building societies.Liquid assets (s. 21)21. Liquid assets.Liabilities of associated bodies (s. 22)22. Obligation to meet liabilities of associated bodies.Other powers (s. 23)23. Power to hedge.Part IV Protection of Investors (ss. 24-33)Investor Protection Scheme (ss. 24-30)24. The Building Societies Investor Protection Board.25. The Investor Protection Fund.25A. Meaning of insolvency etc.26. Power to levy contributions and to borrow money in event of insolvency.27. Payments to investors.27A. Membership of insolvency committees etc.28. Liability of insolvent society in respect of payments by Board.29. Repayments in respect of contributions.29A. Power to obtain information.30. Tax treatment of contributions and repayments.Other provisions (ss. 31-33)31. Voluntary schemes.32. Special provisions as regards investors.33. Assistance by building societies to other building societies.Part V Powers to Provide Services (ss. 34-35)34. Powers to provide financial services or services relating to land.35. Prohibition on linking services.Part VI Powers of Control of the Appropriate Authority (ss. 36-57)Powers in relation to asset or liability structure requirements (ss. 36-37)36. Powers in event of breach of limits on certain assets and liabilities.36A. Power to make prohibition orders.37. Powers to petition for winding up etc.Power to determine extent of building society powers (ss. 38-40)38. Power to determine building society's powers.39. The determination: notification, effect, appeal.40. Power to make prohibition orders.Powers in relation to authorisation (ss. 41-45)41. Power to direct application to renew authorisation.42. Imposition of conditions on current authorisation.42A. Imposition or variation of conditions in urgent cases.42B. Power to direct transfers of engagements or business.42C. Variation and revocation of transfer directions.43. Revocation of authorisation43A. Revocation: supplementary directions.43B. Notification and confirmation of supplementary directions.44. Reauthorisation.45. The criteria for prudent management.General functions of Commission (ss. 45AA-45A)45AA. Statements of principles etc. by Commission.45A. Exercise of powers on information from supervisory authority.Notices, hearings and appeals (ss. 46-49)46A. Notices, hearings and appeals.47. Determination of appeals.48. Costs, procedure and evidence.49. Further appeals on points of law.Advertising etc. (ss. 50-51)50. Powers to control advertising.51. Power to avoid apparent association with other bodies.Information (ss. 52-54)52. Powers to obtain information and documents etc.52B. Entry of premises under warrant under section 176 of the Financial Services and Markets Act 2000.53A. Disclosure of information.54. Information disclosed to FCA or PRA from other sources.Inspections, etc. (ss. 55-57)55. Investigations on behalf of FCA or PRA.56. Inspections and special meetings: general.57. Inspections: supplementary provisions.Part VII Management of Building Societies (ss. 58-70)Directors and other officers (ss. 58-61)58. Directors: number.59. Chief executive and secretary.60. Directors: elections and retirement.61. Directors: supplementary provisions as to elections, etc.Dealings with directors (ss. 62-68)62. Prohibition of tax-free payments to directors.63. Directors to disclose interests in contracts and other transactions.64. Substantial property transactions involving directors and connected persons.65. Restriction on loans, etc. to directors and persons connected with them.66. Sanctions for breach of s. 65.66A. Transactions with directors and persons connected with them.67. Directors, etc. not to accept commissions in connection with loans.68. Records of loans, etc. for directors falling within s. 65.Disclosure and record of related businesses (s. 69)69. Disclosure and record of income of related businesses.Interpretation (s. 70)70. Interpretation of this Part.Part VIII Accounts and Audit (ss. 71-82)Accounting records (s. 71)71. Accounting records.Accounts (ss. 72-76)72. Duty of directors to prepare annual accounts.72A. Duty to prepare individual accounts.72B. Building Societies Act individual accounts.72C. Form and contents of Building Societies Act individual accounts.72D. IAS individual accounts.72E. Duty to prepare group accounts.72F. Building Societies Act group accounts.72G. Form and contents of Building Societies Act group accounts.72H. IAS group accounts.72I. Consistency of accounts.72J. Disclosures relating to directors, other officers and employees of society required in notes to accounts.72K. Disclosures about related undertakings required in notes to accounts.72L.Disclosures relating to off-balance-sheet arrangements required in notes to accounts.72M. Disclosure of auditor remuneration required in notes to accounts.73. Contents and form of annual accounts.74. Duty of directors to prepare annual business statement.75. Directors' report.75A. Business review.76. Summary financial statement for members and depositors.Auditors and audit of accounts (ss. 77-79)77. Auditors: appointment, tenure, etc.78. Auditor's report.78A. Signature of auditors' report.78B. Senior statutory auditor.78C. Names to be stated in copies of auditor's report filed or published.78D. Circumstances in which names may be omitted.79. Auditor's duties and powers.Procedure on completion of accounts (ss. 80-82)80. Signing of balance sheet: documents to be annexed.81. Laying and furnishing accounts, etc. to members, the FCA and the PRA.81A. Requirements in connection with publication of accounts.81B. Interpretation of Part 8.82. Auditors' duties to Commission and related rights.Part IX Disputes (ss. 83-85)83. Recognised schemes for investigation of complaints.83A. Persons entitled to have complaints investigated.84. Investigation of complaints: supplementary provisions.85. Settlement of disputes.Part X Dissolution, Winding Up, Mergers and Transfer of Business (ss. 86-103)Dissolution and winding up (ss. 86-92)86. Modes of dissolution and winding up.87. Dissolution by consent.88. Voluntary winding up.89. Winding up by court: grounds and petitioners.89A. Building society insolvency as alternative order.90. Application of winding up legislation to building societies.90A. Application of other companies insolvency legislation to building societies.90B. Power to alter priorities on dissolution and winding up.90C. Application of bank insolvency and administration legislation to building societies.90D. Notice to the FCA and the PRA of preliminary steps.90E. Disqualification of directors.91. Power of court to declare dissolution of building society void.92. Supplementary.New business (s. 92A)92A. Acquisition or establishment of a business.Mergers (ss. 93-96)93. Amalgamations.94. Transfer of engagements.95. Mergers: provisions supplementing ss. 93 and 94.96. Mergers: compensation for loss of office and bonuses to members.Transfer of business to commercial company (ss. 97-102D)97. Transfer of business to commercial company.98. Transfers of business: supplementary provisions.99. Regulated terms: compensation for loss of office, etc.99A. Transfers of business: increased remuneration etc.100. Regulated terms: distributions and share rights.101. Protective provisions for specially formed successors.102. Transfer regulations.102A. Rights of second-named joint shareholders.102B. Protection of interests of beneficiaries in the case of trustee account holders.102C. Consequences of false declaration.102D. Provisions supplementary to sections 102B and 102C.Cancellation of registration (s. 103)103. Cancellation of registration.Part XI Miscellaneous and Supplementary and Conveyancing Services (ss. 104-126)Miscellaneous and supplementary (ss. 104-123)104. Power to amend, etc. to assimilate to company law.104A. Registration of charges: application of company law.105. Limited power to anticipate future statutory instrument powers.106. Public file of the society.107. Restriction of use of certain names and descriptions.108. Power to require building society to change misleading name.109. Exemption from stamp duty.109A. Exemptions from stamp duty land tax.110. Officers and auditors not to be exempted from liability.111. Time limit for commencing proceedings.112. Offences: liability of officers and defence of due diligence.113. Evidence.114. Records.115. Service of notices.115A. Deemed agreement to use of web site.115B. Right to hard copy version.115C. Other agreed forms of communication.116. Form of documents.117. Financial year of building societies.117A. Alteration of financial year.118. Qualifying asset holding for certain powers.118A. Associates.119. Interpretation119A. Meaning of "associated undertaking.120. Amendments, repeals, revocations and transitional and saving provisions.121. Power to make transitional and saving provisions.122. Northern Ireland.123. Expenses.Provision of conveyancing services by recognised institutions and practitioners (s. 124)124. Recognition of building societies, other institutions and individuals as suitable to provide conveyancing services.General (ss. 125-126)125. Short title.126. Commencement.Schedule 1 The Building Societies CommissionSchedule 2 Establishment, Incorporation and Constitution of Building SocietiesSchedule 2, Part I General (paras. 1-15)Schedule 2, Part II Capacity of Society and Power of Directors to Bind it (paras. 16-18)Schedule 2, Part III Meetings, Resolutions and Postal Ballots (paras. 20-36)Schedule 2A. Discharge of mortgages: supplementary provisions.Schedule 3 Authorisation: Supplementary ProvisionsSchedule 3, Part I Preliminary (para. 1)Schedule 3, Part II Authorisation (paras. 2-3)Schedule 3, Part III Imposition of Conditions (paras. 4-5)Schedule 3, Part IV Revocation of Authorisation (paras. 6-8)Schedule 3, Part V Supplementary (paras. 9-10)Schedule 4 Advances: Supplementary ProvisionsSchedule 5 The Building Societies Investor Protection BoardSchedule 6 Insolvency Payments: Trusts and Joint or Client Account HoldingsSchedule 7 Investors: Special ProvisionsSchedule 7A Directions: supplementary provisions.Schedule 8 Powers to Provide ServicesSchedule 8, Part I The ServicesSchedule 8, Part II General Restriction on Services AbroadSchedule 8, Part III Restrictions in Relation to Certain ServicesSchedule 8, Part IV SupplementarySchedule 8A Transfer Directions: Modifications of Part XSchedule 8A, Part I Directions under section 42B(3) (paras. 1-5)Schedule 8A, Part II Directions under section 42B(4) (paras. 6-11)Schedule 9 Directors: Requisite Particulars of Restricted TransactionsSchedule 10 Requisite Particulars of Income of Related BusinessesSchedule 10, Part I Requisite Particulars Where no Adoption of Part II (paras. 1-4)Schedule 10, Part II Requisite Particulars on Adoption of This Part (paras. 5-8)Schedule 10, Part III Supplementary (paras. 9-10)Schedule 10A Disclosures about directors, other officers and employees in notes to accountsSchedule 10A, Part 1 Emoluments of and dealings with directors and other officers (paras. 1-12)Schedule 10A, Part 2 Information about employees (para. 13)Schedule 10B Disclosures about related undertakings required in note to accountsSchedule 10B, Part 1 Societies not required to prepare consolidated group accounts (paras. 1-8)Schedule 10B, Part 2 Societies required to prepare consolidated group accounts (paras. 9-20)Schedule 10C Disclosure of auditor remuneration etc required in notes to accountsSchedule 11 Auditors: Appointment, TenureSchedule 12 Schemes for Investigation of ComplaintsSchedule 12, Part I Matters to be Provided for in SchemesSchedule 12, Part II Requirements for Recognised Schemes : Matters of ComplaintSchedule 12, Part III Minimum Requirements for Recognised Schemes: Other ProvisionsSchedule 13 Schemes for Investigation of Complaints : Recognition, Accession, etc.Schedule 14 Settlement of DisputesSchedule 14, Part I Proceedings in Court (paras. 1-3)Schedule 14, Part II Arbitration (paras. 4-8)Schedule 15 Application of Companies Winding Up Legislation to Building SocietiesSchedule 15, Part I General Mode of Application (paras. 1-5)Schedule 15, Part II Modified Application of Insolvency Act 1986 Parts IV, 6, 7, 12 and 13 and Schedule 10 (paras. 6-33B)Schedule 15, Part III Modified Application of Insolvency (Northern Ireland) Order 1989 Parts V, 11 and 12 (paras. 34-55G)Schedule 15, Part IV Dissolution of Building Society wound up (England and Wales, Scotland and Northern Ireland) (paras. 56-59)Schedule 15A Application of other companies insolvency legislation to building societiesSchedule 15A, Part I General mode of application (paras. 1-5A)Schedule 15A, Part II Modified Application of Parts I to III, 6, 7, 12 and 13 of Insolvency Act 1986 (paras. 6-27I)Schedule 15A, Part III Modified Application of Parts II, III, 4 and 12 of Insolvency (Northern Ireland) Order 1989 (paras. 28-55)Schedule 16 Mergers: Supplementary ProvisionsSchedule 16, Part I Issue of Statements to Members (para. 1)Schedule 16, Part II Notification of Proposals for Merger (paras. 2-6)Schedule 16, Part III Confirmation by appropriate authority: Procedure (paras. 7-9)Schedule 17 Transfers of Business: Supplementary ProvisionsSchedule 17, Part I Issue of Statement to Members (paras. 1-5)Schedule 17, Part IA Notification of proposals for transfers of business (paras. 5A-5E)Schedule 17, Part II Confirmation by appropriate authority: Procedure (paras. 6-8)Schedule 18 Amendments of EnactmentsSchedule 18, Part I United Kingdom (paras. 1-19)Schedule 18, Part II Northern Ireland (paras. 20-26)Schedule 19 Repeals and RevocationsSchedule 19, Part I Repeals: GeneralSchedule 19, Part II Revocation Extending to Great BritainSchedule 19, Part III Repeals and Revocations Extending Only to Northern IrelandSchedule 20 Transitional and Saving ProvisionsSchedule 21 Provision of Conveyancing Services by Recognised Institutions and Practitioners
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5. Establishment, constitution and powers.
Amendments (requiring commencement) by s. 1 of the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007 (c. 26), published 23 October 2007.
(1) A society may be established under this Act if (and only if) it complies with the following requirements, namely -
(a) its purpose or principal purpose is that of making loans which are secured on residential property and are funded substantially by its members; and
(b) its principal office is in the United Kingdom.
(2) A society is established under this Act on compliance by the persons establishing it with the scheduled requirements and is incorporated under this Act as from the date of registration by the FCA.
(3) A society incorporated under this Act is referred to in this Act as a "building society".
(4) A society incorporated under the repealed enactments whose principal office, as registered with the central office immediately before the commencement of this section, was in the United Kingdom, shall be deemed to be registered (and accordingly as incorporated) under this Act.
(4A) If, after its establishment, a building society fails to comply with the requirements imposed by subsection (1)(a) or (b) above -