{
  "url": "https://openlegislation.uk/building-societies-supplementary-capital-amendment-order-1992/note",
  "json_url": "https://openlegislation.uk/building-societies-supplementary-capital-amendment-order-1992/note.json",
  "legislation": "uksi/1992/1612",
  "legislation_title": "The Building Societies (Supplementary Capital) (Amendment) Order 1992",
  "legislation_url": "https://openlegislation.uk/building-societies-supplementary-capital-amendment-order-1992",
  "path": "note",
  "kind": "note",
  "number": null,
  "heading": "Explanatory note",
  "text": "(This note is not part of the Order)\nThis Order amends the Building Societies (Supplementary Capital) Order 1988 (“the 1988 Order”), which specifies supplementary capital as a capital resource which building societies may aggregate with their reserves to assess the adequacy of their reserves and other designated capital resources under section 45(3) of the Building Societies Act 1986.\nThe specification of supplementary capital under the 1988 Order is narrowed in two respects. First, with effect from 30th September 1993, the Order excludes the aggregation of supplementary capital if the rules of the society permit any shares apart from deferred shares to be written down (article 4(e)). Secondly, it excludes supplementary capital which is issued upon terms which provide that the rate of interest payable will increase by more than a specified percentage (article 4(f)). There is a saving of supplementary capital already issued upon such terms, provided its terms are not subsequently revised to offend the Order (article 5).\nThe overall limit on the extent to which supplementary capital may be aggregated with reserves is also varied. Under article 4(1) of the 1988 Order, the amount of supplementary capital which may be aggregated may not exceed 50 per cent of a society’s primary capital. Primary capital is redefined (by reference to the Building Societies (Designated Capital Resources) Order 1992) as a society’s reserves and verified interim profit plus any deferred shares falling to be aggregated under other Orders made under section 45(5), less any intangible assets and any interim loss. Article 4(d) introduces a requirement for a society with subsidiary undertakings to calculate the limit on the aggregation of its supplementary capital by reference to its group accounts. Subsidiary undertakings are defined for this purpose, by reference to the Building Societies Act 1986 (Modifications) Order 1991, in the same terms as for companies' accounts.\nThe Order gives effect, in relation to supplementary capital issued by building societies, to the provisions of the European Communities Council Directive on the own funds of credit institutions (89/299/EEC) (OJ No. L124, 5.5.89, p.16) defining subordinated loan capital which may be included in the own funds of a credit institution and imposing a limit on the extent to which such subordinated loan capital may be counted as own funds for solvency and prudential purposes.",
  "extent": null,
  "status": null,
  "version": "current",
  "annotations": [],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/uksi/1992/1612/note",
    "retrieved_at": "2026-10-29T14:20:01.552958+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."
}