Explanatory note

These Rules provide for aggregation of assets and liabilities of associated bodies of a building society with those of the society for the purpose indicated below.

By virtue of sections 7, 8 and 20 of the Building Societies Act 1986, a building society is subject to statutory limits in respect of certain assets and liabilities. Thus no more than 20 per cent of its total share and deposit liabilities may be non-retail (a term which approximates to liabilities to bodies corporate rather than individuals); no more than 50 per cent of its total share and deposit liabilities may be represented by deposits; no more than 5 per cent of its commercial assets may be class 3 assets (generally commercial assets other than advances secured on land).

These Rules aggregate with assets and liabilities of societies, for statutory limit purposes, corresponding assets and liabilities of associated bodies and provide for the disregarding (in cases where aggregation applies) of assets of societies represented by liabilities of relevant associated bodies and liabilities of societies represented by assets of relevant associated bodies. These Rules do not apply to bodies established to lend on property in other European Community member states or to certain named bodies designated as suitable for investment and support by building societies for the purpose of operation of limited credit facilities and money transmission services.