Building Societies (Prescribed Contracts) Order 1986

JurisdictionUK Non-devolved
CitationSI 2098/1986

1986 No. 2098

BUILDING SOCIETIES

The Building Societies (Prescribed Contracts) Order 1986

2ndDecember 1986

4thDecember 1986

1stJanuary 1987

The Building Societies Commission, with the consent of the Treasury, in exercise of the powers conferred on it by section 23(2) of the Building Societies Act 1986(a), and of all other powers enabling it in that behalf, hereby makes the following Order:—

Citation and commencement

1. This Order may be cited as the Building Societies (Prescribed Contracts) Order 1986 and shall come into operation on 1st January 1987.

Interpretation

2. In this Order —

"participant" means a party to a prescribed contract to which a society is also a party;

"prescribed contract" means an agreement the terms of which include —

(a) the terms set out for sterling interest rate swaps in Part I of the Schedule hereto, or

(b) the terms set out for capital and interest currency swaps in Part II of the Schedule hereto; and

"society" means a building society.

Prescribed contracts

3.—(1) Subject as specified below, a society may, for the purposes of section 23(1) of the Building Societies Act 1986 (which empowers societies with qualifying asset holdings to hedge), effect prescribed contracts.

(2) A society may only effect a prescribed contract where it has borrowed or intends to borrow a principal sum and the prescribed contract relates to a principal sum equal to it or less than it.

(a) 1986 c.53.

(3) No prescribed contract may be effected by a society save where another participant is a bank authorised, as at 31st December 1986, to hold funds of societies under section 59 of the Building Societies Act 1962(a) or of the Building Societies Act (Northern Ireland) 1967(b) (dealing with banks authorised to hold such funds).

In witness whereof the common seal of the Building Societies Commission is hereunto fixed, and is authenticated by me, a person authorised under paragraph 14 of Schedule 1 to the Building Societies Act 1986, on 27th November 1986.

G. M. Binns, Secretary to the Commission.

(L.S.)

We consent to this Order.

Michael Neubert, Peter Lloyd, Two of the Lords Commissioners of Her Majesty's Treasury.

2nd December 1986.

Article 2

SCHEDULE

PART I

TERMS FOR STERLING INTEREST RATE SWAPS

A society agrees with a participant that —

(a) the society will pay to, or to the order of, the participant, and

(b) the participant will pay to, or to the order of, the society,

sums calculated in each case by applying a rate of interest to...

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