{
  "url": "https://openlegislation.uk/building-societies-designation-of-qualifying-bodies-no-3-order-1993/note",
  "json_url": "https://openlegislation.uk/building-societies-designation-of-qualifying-bodies-no-3-order-1993/note.json",
  "legislation": "uksi/1993/2706",
  "legislation_title": "The Building Societies (Designation of Qualifying Bodies) (No. 3) Order 1993",
  "legislation_url": "https://openlegislation.uk/building-societies-designation-of-qualifying-bodies-no-3-order-1993",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This note is not part of the Order)\nThe principal effect of this Order is to consolidate the Orders revoked by article 5 and to make amendments to those Orders. Article 3 designates Girobank and various types of corporate body (specified in Part I of the Schedule) which a building society may invest in and support or support under section 18 of the Building Societies Act 1986. In addition to minor and drafting amendments, this Order makes changes of substance as set out below.\nDesignated bodies carrying on the following types of activity: ancillary services, financial services, general insurance, life insurance and pensions may be incorporated in the Isle of Man and the Channel Islands by virtue of this Order (in addition to countries within the European Community and European Free Trade Association).\nThe threshold up to which a society may invest in a designated body which is carrying on prohibited activities (chiefly market making and deposit taking in the UK), or which has subordinate organisations carrying on prohibited activities is increased from 2% to 5%.\nThe threshold above which a society must be satisfied that 40% of the income of an estate agency body in which the society has invested is derived from estate agency work is increased to 15%. It is no longer a requirement that 40% of the income of an estate agency body must be derived from estate agency work carried on in countries where the investing society has made loans secured on land. However such estate agency work must be carried on in countries where estate agency bodies can be incorporated.\nThe “group interest provision” has been simplified and has now become the “qualifying activities condition”. It is no longer a requirement that a society must seek to produce a certificate signed by a director of the body and supported by an auditor’s report stating that at least 60% of the consolidated gross income of a body and its subordinate organisations is derived from carrying on activities for the purpose of which a society has power to invest in and support or support. Provision is made that where a society holds at least 15% or more of the issued shares or corresponding membership rights in any designated body (not restricted to UK companies) to which the qualifying activities condition applies it must be satisfied that at least 60% of the gross income of that body or (if applicable) 60% of the consolidated gross income of that body and any of that body’s subordinate organisations is derived from carrying on qualifying activities.\nA lending body is a body corporate which, in addition to acquiring, holding and disposing of debts which are secured on land and making advances on the security of land may make syndicated loans. Syndicated loans are defined in the Order to mean various types of arrangement whereby more than one lender lends to a borrower on the security of land and, inter alia, the lending body acquires a secured interest in the loan from any of the lenders.\nThe designation of Girobank plc has been retained as a named body corporate. Housing associations and housing trusts have been retained as types of body corporate which are designated bodies for the purposes of section 18. The provisions relating to estate agency bodies, general insurance bodies, life insurance bodies, payment service bodies and pension bodies remain substantially the same as the corresponding provisions in the Orders which have been revoked, but with minor drafting amendments.\nA building society may support only (and is not required to invest in) the following types of body corporate: ancillary services body, estate agency body, financial services body, life insurance body, payment services body, pension body, housing trust and housing association. The restriction that a society must both invest and support (and may not support only) some of these bodies corporate if such bodies have the capacity to have subordinate organisations has been removed.\nAny power which has been adopted for the purposes of any Order revoked by this Order may be exercised by a society for three years from the date this Order comes into force as long as the power to invest and support continues to be specified in that society’s memorandum.\nThis Order amends the Building Societies (Designation of Qualifying Bodies) Order 1993 and the Building Societies (Designation of Qualifying Bodies) (No.2) Order 1993 (S.I. 1993/989). In addition to making minor drafting changes, this Order amends the latter Order by enabling a mortgage indemnity insurance body to indemnify any subsidiary of the society investing in the body against loss sustained by such subsidiary in respect of that subsidiary’s mortgage business.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1993/2706/note",
    "retrieved_at": "2026-10-29T13:47:51.304679+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}