Building Societies (Authorisation) Regulations 1981
| Jurisdiction | UK Non-devolved |
1981 No. 1488
BUILDING SOCIETIES
The Building Societies (Authorisation) Regulations 198119thOctober 1981
1stDecember 1981
ARRANGEMENT OF REGULATIONS AND SCHEDULES
Regulation
1. Citation and commencement.
2. Interpretation.
3. Restrictions on building societies' borrowing and acceptance of subscriptions for shares.
4. Exceptions to the restrictions in regulation 3.
5. Authorised building societies.
6. Procedure on application for authorisation.
7. Conditions for the grant of authorisation.
8. Grounds for revocation of authorisation.
9. Procedure on revocation of authorisation.
10. Appeals.
11. Effect of lack of authorisation on obligations of a society and of its investors, etc.
12. Power to obtain information and confidentiality of information.
13. Penalties.
14. Power to issue deferred shares.
15. Certificates of authorisation and notices of revocation.
16. Amendments of 1962 Act.
Schedule
1. Part I—Conditions as to deferred shares or reserves.
Part II—Meaning of deferred shares, reserves and assets.
2. Provision as to certificates of authorisation and notices of revocation of authorisation.
3. Amendments of the 1962 Act.
The Registry of Friendly Societies, being a Department designated (a) for the purposes of section 2(2) of the European Communities Act 1972(b) in relation to the authorisation of the carrying on of the business of a building society and the regulation of such business and its conduct and in relation to anything supplemental or incidental thereto, in exercise of the powers conferred by that section, hereby makes the following Regulations, a draft of which has been approved by resolution of each House of Parliament:—
Citation and commencement
1. These Regulations may be cited as the Building Societies (Authorisation) Regulations 1981 and shall come into operation on 1st December 1981.
Interpretation
2. In these Regulations—
"the 1962 Act" means the Building Societies Act 1962(c);
"appointed day" means the day on which these Regulations come into operation;
"authorisation", "authorised" and "authorised building society" have the meaning given by regulation 3 of these Regulations;
"deferred shares", "assets" and "reserves" have the meaning given by Schedule 1 to these Regulations.
Unless a contrary intention appears, all other expressions used have the same meaning as in the 1962 Act.
Restrictions on building societies' borrowing and acceptance of subscriptions for shares
3.—(1) Except as provided by regulation 4 below, a building society shall not—
(a) accept the deposit of, or otherwise borrow, any money, or
(b) accept any payment representing the whole or any part of the amount due by way of subscription for a share in the society
unless it is authorised to do so in accordance with regulation 5 below. The expressions "authorisation", "authorised" and "authorised building society" in these Regulations shall be construed accordingly.
(2) The fact that funds are accepted in contravention of this regulation shall not affect any civil liability arising in respect of the acceptance or of the funds accepted.
Exceptions to the restrictions in regulation 3
4. The restrictions in regulation 3 above shall not apply to—
(a) the acceptance of payments by way of subscription for deferred shares;
(b) the acceptance of payments, representing the whole or any part of the amount due by way of subscription for a share in the society, which fell due before the restrictions applied to the society;
(c) the acceptance of payments for amounts due in respect of a share which represent interest on, or the repayment of, an advance made to the holder of the share;
(a) The European Communities (Designation) (No. 2) Order 1981 (S.I. 1981/833).
(b) 1972 c. 68.
(c) 1962 c. 37.
(d) borrowing from a banking or finance company, or from a director or other officer of the society, if the society has obtained the consent in writing of the Chief Registrar;
(e) borrowing under section 44 of the 1962 Act (assistance by one building society to another).
Authorised building societies
5.—(1) Authorisation may be granted by the Chief Registrar on an application in that behalf by a building society.
(2) A building society shall be deemed to be authorised on the appointed day if—
(a) it was formed, whether by incorporation or union, before the appointed day; and
(b) in the case of a society which was incorporated on or after 1st October 1960, it has before the appointed day obtained a certificate under section 13(1) of the 1962 Act; and
(c) it is not on the appointed day subject—
(i) to an order made under section 48 of the 1962 Act (power to suspend borrowing and subscription for shares); or
(ii) to a direction made under section 55(5) of the 1962 Act (special power in relation to small societies); or
(iii) to an order made under any of the previous relevant enactments; and
(d) on the appointed day the society is not in the course of being wound up or dissolved.
(3) In paragraph (2)(c)(iii) above "the previous relevant enactments" means—
(a) section 11 of the Prevention of Fraud (Investments) Act 1939(a);
(b) section 11 of the Prevention of Fraud (Investments) Act 1958(b); and
(c) section 6 of the Building Societies Act 1960(c).
(4) A building society formed on or after the appointed day on the union of two or more societies shall be deemed to be authorised, if all those societies are authorised at the time when the union takes effect.
Procedure on application for authorisation
6.—(1) An application for authorisation shall be made in such manner as the Chief Registrar may specify and shall be accompanied by such information as he may reasonably require, either generally or in any particular case, in order to reach a decision on the application.
(2) If required to do so by notice in writing from the Chief Registrar, given at any time before a decision has been reached on an application under paragraph (1) above, the applicant society shall send to the Chief Registrar such additional information as he may reasonably require in order to reach a decision.
(3) If, on an application falling within paragraph (1) above, the Chief Registrar proposes to refuse to grant authorisation, he shall serve a notice on the applicant society stating—
(a) that he proposes to refuse to grant authorisation; and
(a) 1939 c. 16.
(b) 1958 c. 45.
(c) 1960 c. 64.
(b) the reasons for the proposed refusal; and
(c) that the applicant society may make representations with respect to the proposed refusal within such period of not less than twenty-eight days as may be specified in the notice, and that, if the society so requests, he will afford to it an opportunity of being heard by him within that period.
(4) Before reaching a decision to refuse an application under paragraph (1) above, the Chief Registrar shall—
(a) consider any representations which have been made in accordance with paragraph (3)(c) above; and
(b) obtain the consent of the Treasury to his proposed decision.
(5) If, on an application under paragraph (1) above, the Chief Registrar grants authorisation, he shall issue to the applicant society a certificate in Form A1 of Schedule 2 below.
(6) If, on an application under paragraph (1) above, the Chief Registrar refuses to grant authorisation, he shall give notice in writing to the applicant society of the refusal and of the reasons for it and, subject to paragraph (7) below, this notice shall be given before the expiry of the period of six months beginning on the date on which the application was received by the Chief Registrar.
(7) In any case where, under paragraph (2) above, the Chief Registrar requires additional information with respect to an application, the latest time for the giving of a notice under paragraph (6) above with respect to that application shall be the expiry of whichever of the following periods first expires, namely—
(a) the period of six months beginning on the date on which the additional information was received by the Chief Registrar; or
(b) the period of twelve months beginning on the date on which the application was received by the Chief Registrar.
Conditions for the grant of authorisation
7. On an...
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