Building Societies (Funding) and Mutual Societies (Transfers) Act 2007
| Year | 2007 |
Building Societies (Funding) and Mutual Societies (Transfers) Act 2007
2007 Chapter 26
An Act to make provision in relation to funding limits in respect of building societies; to provide consequential rights to building society members; and to make provision in connection with the transfer of the business of certain mutual societies.
[23rd October 2007]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
1 Funding limit for building societies
(1) In section 7 of the Building Societies Act 1986 (c. 53)
(funding limit)—
(a) after subsection (6) insert—
‘(6A) The Treasury may, by order—
(a) provide for subsection (1) to have effect as if the reference to 50 per cent were a reference to such greater percentage (not exceeding 75) as they think appropriate;
(b) prohibit a society from applying the increased percentage unless a resolution of the society of such description as the Treasury think appropriate is passed in favour of applying the increased percentage.
(6B) An order under subsection (6A) is of no effect at any time unless, at the same time, there is also in force an order under section 90B (power to alter priorities on dissolution and winding up).
(6C) An order under subsection (6A)(a)—
(a) may not be amended so as to reduce the percentage specified in the order;
(b) may not be revoked, unless it is replaced by another such order specifying the same or a greater percentage.
(b) in subsection (8), after ‘subsection’ insert ‘(6A) or’;
(c) after subsection (8) insert—
‘(8A) The power to make an order under subsection (6A) is exercisable by statutory instrument but no such order may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
(2) In section 5 of that Act (establishment, constitution and powers), after subsection (10) insert—
‘(11) The Treasury may by order amend subsection (1)(a) so as to alter the extent to which the making of loans is required to be funded by a society's members.
(12) An order under this section may make such consequential, saving, supplementary or transitional provision as the Treasury think necessary or expedient.
(13) The consequential provision that may be made by virtue of subsection (12) includes, in particular, provision amending any the following so far as relating to funding by the members of a society—
(a) section 1(1)(a) (functions of the Financial Services Authority in relation to building societies);
(b) section 93(2)(a) (amalgamations);
(c) paragraph 2 of Schedule 2 to this Act (memorandum).
(14) The power to make an order under this section is exercisable by statutory instrument, but no such order may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
2 Power to alter priorities on dissolution and winding up
After section 90A of the Building Societies Act 1986 (c. 53)insert—
90B ‘Power to alter priorities on dissolution and winding up
(1) The Treasury may by order make provision for the purpose of ensuring that, on the winding up, or dissolution by consent, of a building society, any assets available for satisfying the society's liabilities to creditors or to shareholders are applied in satisfying those liabilities pari passu.
(a) liabilities in respect of subordinated deposits;
(b) liabilities in respect of preferential debts;
(c) any other category of liability which the Treasury specifies in the order for the purposes of this paragraph.
(3) Liabilities to shareholders do not include liabilities in respect of deferred shares.
(4) A preferential debt is a debt which constitutes a preferential debt for the purposes of any of the enactments specified in paragraph 1 of Schedule 15 to this Act (or which would constitute such a debt if the society were being wound up).
(a) make amendments of this Act;
(b) make different provision for different purposes;
(c) make such consequential, supplementary, transitional and saving provision as appears to the Treasury to be necessary or expedient.
(6) The power to make an order under this section is exercisable by statutory instrument but no such order may be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.
3 Transfers to subsidiaries of other mutuals
(1) The Treasury may, by order, make such modifications of the transfer provisions as it thinks appropriate to facilitate, or in consequence of, the transfer of the whole of the business of a mutual society (the transferor) to a subsidiary of a mutual society (whether or not of the same type) (the transferee).
(2) An order under this section may make provision as to the rights (including rights of and pertaining to membership) in relation to the mutual society of which the transferee is a subsidiary—
(a) of the members of the transferor;
(b) of persons...
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