Financial Services Act 2012

Building societies: miscellaneous

55 Building societies: creation of floating charges

(1) Section 9B of the Building Societies Act 1986 (restriction on creation of floating charges) is amended as follows.

(2) In subsection (1), at the end insert “unless it complies with the requirements in subsection (1A)”.

(3) After that subsection insert—

“(1A) The requirements are that the floating charge—

(a) is created in favour of a participant in a system, and

(b) is created for the purpose of securing any rights and obligations that may arise in connection with participation in that system.”

(4) After subsection (2) insert—

“(3) In this section “participant” and “system” have the meaning given by Article 2 of Directive 98/26/EC of the European Parliament and of the Council of 19th May 1998 on settlement finality in payment and securities settlement systems (as amended by Directives 2009/44/EC and 2010/78/EU).”

56 Power to direct transfer of building society's business

(1) Section 42B of the Building Societies Act 1986 (power to direct transfers of engagements or business) is amended as follows.

(2) In subsection (1)—

(a) before the “or” at the end of paragraph (a) insert—

“(aa) direct the society, within a specified period, to transfer its business under section 97  to an existing or specially formed company that is a subsidiary of another mutual society by a transfer to which provision made by order under section 3 of the 2007 Act (transfers to subsidiaries of other mutuals) applies;”, and

(b) in paragraph (b), for “to an existing company under section 97” substitute “under section 97 to an existing company that is not a subsidiary of another mutual society”.

(3) After subsection (1) insert—

“(1A) In this section—

(a) “the 2007 Act” means the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007;

(b) “mutual society” has the same meaning as in section 3 of that Act.”

(4) In subsection (4)—

(a) in paragraph (a), for “(1)(b)” substitute “(1)(aa) or (b)”, and

(b) in paragraph (b), after “existing company” insert “, or to a specially formed company that is a subsidiary of another mutual society,”.

(5) In Schedule 8A to that Act (directions under section 42B(4)), in paragraph 9(3), for “section 42B(1)(b)” substitute “section 42B(1)(aa) or (b)”.