Article 2 Interpretation

In this Order—

• “the Act” means the Building Societies Act 1986;

• “the applicable provisions” means section 97 of the Act and the other applicable provisions as therein described;

• “borrower” in relation to qualifying subordinated debt means the person to whom that debt was advanced or to the extent that some other person has succeeded to the rights and obligations under the issue terms of the recipient of the advance, that other person;

• “commercial company” means a company within the meaning of the Companies Act 1985^f1;

• “crediting” in relation to interest on qualifying subordinated debt shall not include incurring in lieu of interest, further qualifying subordinated debt credited as fully paid by the application of reserves to an amount not greater than the interest foregone;

• “creditors” in relation to a society extends to members holding shares in the society, other than deferred shares, as regards the principal of those shares and all interest due thereon in accordance with their terms;

• “the first criterion” means the first criterion in section 45(3) (the criteria for prudent management) of the Act;

• “issue terms” in relation to an issue of qualifying subordinated debt means the provisions of a document which sets out or of a connected series of documents which set out the rights and obligations of the borrower, the lender and other persons if any in relation to such debt;

• “lender” in relation to qualifying subordinated debt means the person by whom that debt was advanced or to the extent that some other person has succeeded to the rights and obligations under the issue terms of the person by whom the debt was advanced, that other person;

• “the prescribed terms” means the terms specified in Schedule 1 hereto and “the disqualifying terms” means the terms specified in Schedule 2 hereto;

• “qualifying subordinated debt” has the meaning ascribed to it in article 3(2);

• “rate” in relation to interest means the rate per annum and “fixed rate”, “floating rate”, “market rate” and “stepped rate” have the respective meanings assigned by article 3(3);

• “relevant consent” has the meaning ascribed to it in article 5(2);

• “society” in relation to an issue of undated loan capital means a building society which is or proposes to become the borrower in relation to the qualifying subordinated debt from which such capital is derived;

• “specified” means specified by issue terms;

• “supervisory authority” means—

  1. (a)

     in relation to a borrower which is a society, the Commission;

  2. (b)

     in relation to a borrower which is an authorised institution for the purposes of the Banking Act 1987^f2, the Bank of England; and

• “undated loan capital” means financial resources derived from qualifying subordinated debt.