Explanatory note

This Order designates descriptions of bodies corporate as suitable for investment and support or support by building societies under section 18 of the Building Societies Act 1986, so as to add “appropriate European financial service vehicle” as a further type of designated body.

An appropriate European financial service vehicle is a body corporate which is authorised or otherwise entitled, or is a candidate for authorisation (where applicable) to conduct investment business in any member State of the European Community or in any of the following countries: Austria, Denmark, Finland, Iceland, Liechtenstein, Sweden and Switzerland. Investment business is defined to mean engaging in one or more of the activities which fall within the paragraphs in Part II of Schedule 1 to the Financial Services Act 1986 and are not excluded by Part III of that Schedule.

Investment is defined by section 18 of the Act as acquiring and holding shares or corresponding membership rights in and forming and taking part in forming bodies corporate. Support is defined by that section as provision of loans, grants, guarantees, services or property to bodies corporate.