Explanatory note

This Order supplements section 14A of the Building Societies Act 1986 (inserted by section 17 of the Deregulation and Contracting Out Act 1994) which allows building societies to participate in syndicated lending. It makes provision with respect to what constitutes appropriate security where a society participates in a syndicated loan (including where it participates as a sub-participant); makes provision with respect to the classification, for the purposes of the requirements of Part III of the 1986 Act for the structure of a society’s commercial assets, of a society’s participation in syndicated lending; and provides for the application of that Part, with appropriate modifications, to a society’s participation in syndicated lending. The provisions with respect to what constitutes appropriate security, and with respect to the classification of a society’s participation in syndicated lending, broadly reflect the existing provisions of the 1986 Act with respect to building society advances secured on land.

A compliance cost assessment of the effect that this instrument would have on the cost of business may be obtained from the Secretary, Building Societies Commission, 15 Great Marlborough Street, London W1V 2LL.