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The Building Societies Legislation (Amendment) (EU Exit) Regulations 2018

Draft. This instrument was laid in draft and may differ from the one made. Look for the made version under its title.

Draft 2018, ISBN 9780111171554

Original text. legislation.gov.uk does not revise statutory instruments, so later amendments are not shown here. Changes made to it are listed under each provision when known.

Draft Regulations laid before Parliament under paragraph 1 of Schedule 7 to the European Union (Withdrawal) Act 2018, for approval by resolution of each House of Parliament.

Exiting The European Union

Financial Services

Made ***

Coming into force ***

The Treasury, in exercise of the powers conferred by sections 8(1) and 23(1) of the European Union (Withdrawal) Act 2018f1, makes the following Regulations:

A draft of these Regulations has been approved by a resolution of each House of Parliament in accordance with paragraph 1 of Schedule 7 to that Act.

Annotations to the whole text

Footnotes

f1

2018 c.16.

Contents

  1. Part 1: GENERAL
  2. 1Citation and commencement
  3. Part 2: AMENDMENTS TO PRIMARY LEGISLATION
  4. 2Amendments to the Building Societies Act 1986
  5. 3Part 2: Constitution of building societies
  6. 4Part 10: Dissolution, winding up, mergers, transfer of business
  7. 5Part 11: Miscellaneous and supplementary and conveyancing services
  8. 6Schedule 2: Establishment, incorporation and constitution of building societies
  9. 7Schedule 11: Auditors: appointment, tenure
  10. 8Building Societies (Funding) and Mutual Societies (Transfers) Act 2007
  11. Part 3: AMENDMENTS TO SECONDARY LEGISLATION
  12. 9Building Societies (Transfer of Business) Regulations 1998
  13. 10Building Societies (Accounts and Related Provisions) Regulations 1998
  14. 11Building Societies Act 1986 (Substitution of Specified Amounts and Modification of the Funding Limit Calculation) Order 2007
  15. 12Mutual Societies (Transfers) Order 2009
  16. Signature
  17. Explanatory note

1Citation and commencement

These Regulations may be cited as the Building Societies Legislation (Amendment) (EU Exit) Regulations 2018, and come into force on exit day.

2Amendments to the Building Societies Act 1986

The Building Societies Act 1986f1 is amended in accordance with regulations 3 to 7.

3Part 2: Constitution of building societies

(1)

In section 6A (loans secured on land)f1—

(a)

in subsection (1), in paragraph (c), for “an EEA country or territory other than the United Kingdom”, substitute “the Isle of Man, the Channel Islands or Gibraltar”;

(b)

after subsection (1), insert—

“(1A)

For the purposes of this Act a loan is also secured on land if—

(a)

it was secured before exit day by a qualifying security over land in an EEA country or territory other than the United Kingdom, and

(b)

it continues to be secured by a qualifying security over that land.”

(c)

in subsection (4), for “European Economic Area” substitute “United Kingdom”;

(d)

in subsection (7)—

(i)

in the definition of “qualifying security”, for “in relation to land in an EEA country or territory other than the United Kingdom and a loan”, substitute “in relation to a loan and land in the Isle of Man, the Channel Islands, Gibraltar or in an EEA country or territory”;

(ii)

omit the words from “and for the purposes of this section and that section” to the end of the subsection;

(e)

in subsection (8), for paragraph (a), substitute—

“(a)

land in—

(i)

the United Kingdom;

(ii)

the Isle of Man, the Channel Islands, Gibraltar; or

(iii)

an EEA country or territory; and”.

(2)

In section 6B (loans fully secured on land)f2, in subsection (9)—

(a)

after “Scotland” insert “, the Isle of Man, the Channel Islands, Gibraltar”;

(b)

for “an EEA country” substitute “another country”.

4Part 10: Dissolution, winding up, mergers, transfer of business

In section 97 (transfer of business to commercial company), omit subsection (13)f1.

5Part 11: Miscellaneous and supplementary and conveyancing services

In section 107(12) (restriction of use of certain names and descriptions), in the definition of “institution”, omit paragraph (c)f1.

6Schedule 2: Establishment, incorporation and constitution of building societies

In Schedule 2, in paragraph 23—

(a)

for sub-paragraph (5B)f1, substitute—

“(5B)

For the purposes of sub-paragraph (5A), a relevant resolution is a resolution to approve an increase in the maximum ratio between the fixed and variable components of remuneration as permitted by—

(a)

rule 15.10 of the Remuneration Part of the Rulebook made by the Prudential Regulation Authority under the Financial Services and Markets Act 2000f2, or

(b)

rule 19D.3.49 of the Senior Management Arrangements, Systems and Controls sourcebook made by the Financial Conduct Authority under that Actf3,

where the member referred to would be directly affected by the increase.”;

(b)

after sub-paragraph (5B), insert—

“(5BA)

For the purposes of sub-paragraph (5B), references to rules made by the Prudential Regulation Authority or the Financial Conduct Authority are to those rules as they have effect on exit day.”

(c)

omit sub-paragraph (5C).

7Schedule 11: Auditors: appointment, tenure

In paragraph 8C of Schedule 11f1—

(a)

in sub-paragraph (1), for the definition of “audit committee”, substitute—

  • ““audit committee” means a body which performs—

    1. (a)

      the functions referred to in—

      1. (i)

        rule 7.1.3 of the Disclosure Guidance and Transparency Rules sourcebook made by the Financial Conduct Authority under the Financial Services and Markets Act 2000; or

      2. (ii)

        rule 2.4 of the Audit Committee Part of the Rulebook made by the Prudential Regulation Authority under that Act; or

    2. (b)

      equivalent functions;”;

(b)

after sub-paragraph (1), insert—

“(1A)

For the purposes of the definition of “audit committee”, references to rules made by the Prudential Regulation Authority or the Financial Conduct Authority are to those rules as they have effect on exit day.”

8Building Societies (Funding) and Mutual Societies (Transfers) Act 2007

(1)

The Building Societies (Funding) and Mutual Societies (Transfers) Act 2007f1 is amended as follows.

(2)

In section 3 (transfers to subsidiaries of other mutuals)—

(a)

in subsection (10), for paragraph (d), substitute—

“(d)

a Crown Dependency mutual society.”;

(b)

for subsection (12), substitute—

“(12)

A Crown Dependency mutual society is a body which is a cooperative or mutual undertaking of such description as the Treasury specify by order and which is established or operates in accordance the law of the Isle of Man or any of the Channel Islands.”

(3)

In subsection (14), for paragraph (c), substitute—

“(c)

a body corporate which is incorporated in the Isle of Man or the Channel Islands.”

9Building Societies (Transfer of Business) Regulations 1998

In paragraph 10(2) of Part 2 of Schedule 1 to the Building Societies (Transfer of Business) Regulations 1998f1—

(a)

at the end of sub-paragraph (a), omit “or”;

(b)

omit sub-paragraph (b).

10Building Societies (Accounts and Related Provisions) Regulations 1998

In paragraph 13 of Schedule 11 to the Building Societies (Accounts and Related Provisions) Regulations 1998f1, in the definition of “credit institution” after “competent authorities of” insert “the United Kingdom,”.

11Building Societies Act 1986 (Substitution of Specified Amounts and Modification of the Funding Limit Calculation) Order 2007

In article 3 of the Building Societies Act 1986 (Substitution of Specified Amounts and Modification of the Funding Limit Calculation) Order 2007f1—

(a)

in paragraph (1), for “EEA” substitute “relevant”;

(b)

in paragraph (2), for “EEA” substitute “relevant”;

(c)

in paragraph (4), for “an EEA” substitute “a relevant”;

(d)

in paragraph (5)—

(i)

for “EEA subsidiary undertaking” substitute “a relevant subsidiary undertaking”;

(ii)

omit “another EEA State,”.

12Mutual Societies (Transfers) Order 2009

In the Mutual Societies (Transfers) Order 2009f1, in article 19—

(a)

in paragraph (1), for “EEA mutual society” substitute “Crown Dependency mutual society”;

(b)

in paragraph (2)(b), omit “an EEA state or”;

(c)

in paragraph (3)—

(i)

omit sub-paragraph (a);

(ii)

in sub-paragraph (b)(ii)—

(aa)

for “under the Directive mentioned in sub-paragraph (a) as a direct life or non-life undertaking within the meaning of Article 2 of that Directive” substitute “under the Financial Services and Markets Act 2000 as an insurer, within the meaning of section 339C(4)(b) of that Act”;

(bb)

for “an EEA state” substitute “the United Kingdom”;

(d)

in the heading, for “EEA” substitute “Crown Dependency”.

Signature

Name

Name

Two of the Lords Commissioners of HM Treasury

Date

Explanatory note

(This note is not part of the Regulations)

These Regulations are made in exercise of the powers in section 8 of the European Union (Withdrawal) Act 2018 in order to address failures of retained EU law to operate effectively and other deficiencies (in particular the deficiencies under paragraphs (e) and (g) of section 8(2) of the Act) arising from the withdrawal of the United Kingdom from the European Union and to make consequential provision. Regulations 2 to 7 amend the Building Societies Act 1986 (to remove references to EEA countries and territories, and bodies corporate incorporated under the law of an EU member State or EEA countries and to replace references to EU legislation by references to the provisions of UK law which implemented them). Regulation 8 amends the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007 to replace references to EEA mutual societies by references to Crown Dependency mutual societies. Regulations 9 to 12 make similar amendments to the Building Societies (Transfer of Business) Regulations 1998, the Building Societies (Accounts and Related Provisions) Regulations 1998, the Building Societies Act 1986 (Substitution of Specified Amounts and Modification of the Funding Limit Calculation) Order 2007 and the Mutual Societies (Transfers) Order 2009.

These Regulations refer to the Rulebook made by the Prudential Regulation Authority under the Financial Services and Markets Act 2000, and sourcebooks made by the Financial Conduct Authority under that Act. The Rulebook is available on http://www.prarulebook.co.uk and copies of the rules referred to can be obtained from the Prudential Regulation Authority, 20 Moorgate, London EC2R 6DA, where it is also available for inspection. Sourcebooks made by the Financial Conduct Authority are available on https://www.handbook.fca.org.uk/handbook and copies of the rules referred to can be obtained from the Financial Conduct Authority, 12 Endeavour Square, London E20 1JN, where it is also available for inspection.

An impact assessment of the effect that this instrument, and other instruments made by HM Treasury under the European Union (Withdrawal) Act 2018 at or about the same time, will have on the costs of business, the voluntary sector and the public sector is available from HM Treasury, 1 Horse Guards Road, London SW1A 2HQ and is published alongside this instrument at www.legislation.gov.uk.