Citation and interpretation

1.—(1) This Order may be cited as the Building Societies (Insolvency and Special Administration) Order 2009.

(2) In this Order—

“the 1986 Act” means the Building Societies Act 1986(2);

“the 2009 Act” means the Banking Act 2009.

Application of Parts 2 and 3 of the 2009 Act to building societies

2.  After section 90B of the 1986 Act(3) (power to alter priorities on dissolution and winding up), insert—

“Application of bank insolvency and administration legislation to building societies

90C.—(1) Parts 2 (Bank Insolvency) and 3 (Bank Administration) of the Banking Act 2009 shall apply in relation to building societies with any modifications specified in an order made under section 130 or 158 of that Act and with the modifications specified in subsection (2) below.

(2) In the application of Parts 2 and 3 of that Act to building societies—

(a)references to “bank” (except in the term “bridge bank” and the terms specified in paragraphs (b) and (c)) have effect as references to “building society”;

(b)references to “bank insolvency”, “bank insolvency order”, “bank liquidation” and “bank liquidator” have effect as references to “building society insolvency”, “building society insolvency order”, “building society liquidation” and “building society liquidator”;

(c)references to “bank administration”, “bank administration order” and “bank administrator” have effect as references to “building society special administration”, “building society special administration order” and “building society special administrator”.”.

3.  Schedule 1 to this Order specifies modifications to Parts 2 and 3 of the 2009 Act as they apply in relation to building societies.

Other insolvency processes

4.  In section 88 of the 1986 Act (voluntary winding-up), in subsection (1) at the end insert—

“, but a resolution may not be passed if—

(a)the conditions in section 90D are not satisfied, or

(b)the society is in building society insolvency or building society special administration.

(1A) A resolution under subsection (1) shall have no effect without the prior approval of the court.”.

5.  After section 89 of the 1986 Act (winding-up by court: grounds and petitioners) insert—

“Building society insolvency as alternative order

89A.—(1) On a petition for a winding up order or an application for an administration order in respect of a building society the court may, instead, make a building society insolvency order (under section 94 of the Banking Act 2009 as applied by section 90C below).

(2) A building society insolvency order may be made under subsection (1) only—

(a)on the application of the Authority made with the consent of the Bank of England, or

(b)on the application of the Bank of England.”.

6.  After section 90C of the 1986 Act insert—

“Notice to the Authority of preliminary steps

90D.—(1) An application for an administration order in respect of a building society may not be determined unless the conditions below are satisfied.

(2) A petition for a winding up order in respect of a building society may not be determined unless the conditions below are satisfied.

(3) A resolution for voluntary winding up of a building society may not be passed unless the conditions below are satisfied.

(4) An administrator of a building society may not be appointed unless the conditions below are satisfied.

(5) Condition 1 is that the Authority has been notified—

(a)by the applicant for an administration order, that the application has been made,

(b)by the petitioner for a winding up order, that the petition has been presented,

(c)by the building society, that a resolution for voluntary winding up may be passed, or

(d)by the person proposing to appoint an administrator, of the proposed appointment.

(6) Condition 2 is that a copy of the notice complying with Condition 1 has been filed with the court (and made available for public inspection by the court).

(7) Condition 3 is that—

(a)the period of 2 weeks, beginning with the day on which the notice is received, has ended, or

(b)both—

(i)the Authority has informed the person who gave the notice that it does not intend to apply for a building society insolvency order (under section 95 of the Banking Act 2009 as applied by section 90C above), and

(ii)the Bank of England has informed the person who gave the notice that it does not intend to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009.

(8) Condition 4 is that no application for a building society insolvency order is pending.

(9) Arranging for the giving of notice in order to satisfy Condition 1 can be a step with a view to minimising the potential loss to a building society’s creditors for the purpose of section 214 of the Insolvency Act 1986 (wrongful trading) or Article 178 (wrongful trading) of the Insolvency (Northern Ireland) Order 1989(4) as applied in relation to building societies by section 90 of, and Schedule 15 to, this Act.

(10) Where the Authority receives notice under Condition 1—

(a)the Authority shall inform the Bank of England,

(b)the Authority shall inform the person who gave the notice, within the period in Condition 3(a), whether it intends to apply for a building society insolvency order, and

(c)if the Bank of England decides to apply for a building society insolvency order or to exercise a stabilisation power under Part 1 of the Banking Act 2009, the Bank shall inform the person who gave the notice, within the period in Condition 3(a).

Disqualification of directors

90E.—(1) In this section “the Disqualification Act” means the Company Directors Disqualification Act 1986(5).

(2) In the Disqualification Act—

(a)a reference to liquidation includes a reference to building society insolvency and a reference to building society special administration,

(b)a reference to winding up includes a reference to making or being subject to a building society insolvency order and a reference to making or being subject to a building society special administration order,

(c)a reference to becoming insolvent includes a reference to becoming subject to a building society insolvency order and a reference to becoming subject to a building society special administration order, and

(d)a reference to a liquidator includes a reference to a building society liquidator and a reference to a building society special administrator.

(3) For the purposes of the application of section 7(3) of the Disqualification Act (disqualification order or undertaking)(6) to a building society which is subject to a building society insolvency order, the responsible office-holder is the building society liquidator.

(4) For the purposes of the application of that section to a building society which is subject to a building society special administration order, the responsible office-holder is the building society special administrator.

(5) In the application of this section to Northern Ireland, references to the Disqualification Act are to the Company Directors Disqualification (Northern Ireland) Order 2002(7) and the reference in subsection (3) to section 7(3) of the Disqualification Act is a reference to Article 10(4) of that Order (disqualification order or undertaking; and reporting provisions)(8).”.

Consequential amendments to the Building Societies Act 1986

7.  In section 86 of the 1986 Act (modes of dissolution and winding up), in subsection (1), after “a building society may not, except where it is dissolved by virtue of section 93(5), 94(10) or 97(9),” insert “or following building society insolvency or building society special administration,”.

8.  In section 91 of the 1986 Act (power of court to declare dissolution of building society void)—

(a)in subsection (1), after “or following a winding up,” insert “building society insolvency or building society special administration,”;

(b)in subsection (2), after “or the liquidator,” insert “building society liquidator or building society special administrator,”.

9.  In section 92 of the 1986 Act (supplementary), after “is being wound up or dissolved by consent,” insert “or is in building society insolvency or building society special administration,”.

10.  In section 103 of the 1986 Act (cancellation of registration), in subsection (1), at the end of paragraph (b) insert “or”, and after paragraph (b) insert—

“(c)that the society has been dissolved following building society insolvency or building society special administration.”.

11.  In section 119 of the 1986 Act (interpretation), in subsection (1), after the definition of “building society” insert—

““building society insolvency”, “building society insolvency order” and “building society liquidator” shall be construed in accordance with Part 2 of the Banking Act 2009 as applied with modifications by section 90C above;

“building society special administration”, “building society special administration order” and “building society special administrator” shall be construed in accordance with Part 3 of the Banking Act 2009 as applied with modifications by section 90C above;”.

Amendments to other enactments

12.  In the Company Directors Disqualification Act 1986, after section 21B (bank administration)(9) insert—

“Building society insolvency and special administration

21C.  Section 90E of the Building Societies Act 1986 provides for this Act to apply in relation to building society insolvency and building society special administration as it applies in relation to liquidation.”.

13.  In section 411 of the Insolvency Act 1986 (company insolvency rules)(10), after subsection (3) insert—

“(3A) In this section references to Part 2 or 3 of the Banking Act 2009 include references to those Parts as applied to building societies (see section 90C of the Building Societies Act 1986).”.

14.  In section 414 of the Insolvency Act 1986 (fees orders)(11), after subsection (8B) insert—

“(8C) In subsections (8A) and (8B) the reference to Parts 2 and 3 of the Banking Act 2009 include references to those Parts as applied to building societies (see section 90C of the Building Societies Act 1986).”.

15.  In section 220(3)(a) of the Financial Services and Markets Act 2000 (Compensation Scheme: information)(12) after “bank liquidator” insert “, building society liquidator”.

Rules

16.  Section 413(2) of the Insolvency Act 1986 (rules: duty to consult Insolvency Rules Committee)(13) shall not apply to the first set of rules made in relation to building society insolvency or to the first set of rules made in relation to building society special administration.

Northern Ireland

17.  In the application of this Order to Northern Ireland—

(a)a reference to an enactment is to be treated as a reference to the equivalent enactment having effect in relation to Northern Ireland,

(b)where this Order amends an enactment an equivalent amendment (incorporating any necessary modification) is made to the equivalent enactment having effect in relation to Northern Ireland, and

(c)a reference to the Secretary of State is to be treated as a reference to the Department of Enterprise, Trade and Investment.

Application of subordinate legislation under Parts 2 and 3 of the 2009 Act

18.  Schedule 2 applies subordinate legislation made under Parts 2 and 3 of the 2009 Act in relation to building societies, with the modifications set out in that Schedule.

Article 3

SCHEDULE 1Modified application of Parts 2 and 3 of the Banking Act 2009 to building societies

PART 1General mode of application

General mode of application and interpretation

1.  This Schedule specifies modifications to Part 2 (Bank Insolvency) and Part 3 (Bank Administration) of the 2009 Act as they apply in relation to building societies by virtue of section 90C of the 1986 Act.

2.—(1) Parts 2 and 3 of the 2009 Act apply to building societies with the following general modifications (in addition to the general modifications set out in section 90C(2) of the 1986 Act)—

(a)for “company” in each place where it appears (except in section 151) substitute “building society”;

(b)a reference to depositors includes a reference to holders of shares in the society;

(c)a reference to a provision in Part 1 (Special Resolution Regime) of the 2009 Act is a reference to that provision as applied to building societies with any modifications by section 84 of the 2009 Act (application of Part 1: general);

(d)a reference to a provision in Part 2 or 3 of the 2009 Act is a reference to that provision as applied in relation to building societies by section 90C of the 1986 Act with any modifications specified in that section or this Schedule.

3.  Where a provision of Part 2 or 3 of the 2009 Act applies a provision of the Insolvency Act 1986 or the Companies Act 2006(14), the provision so applied has effect in relation to building societies with the following modifications—

(a)for “articles” substitute “rules”;

(b)for “company” substitute “building society”;

(c)for “registered office” substitute “principal office”;

(d)for “registrar of companies” or “registrar” substitute “FSA”;

(e)for “resolution for voluntary winding up” substitute “resolution passed under section 88(1) of the Building Societies Act 1986”;

(f)every reference to a company registered in Scotland has effect as a reference to a building society whose principal office is situated in Scotland;

(g)every reference to the officers, or to a particular officer, of a company has effect as a reference to the officers, or to the corresponding officer, of the building society and as including a person holding himself out as such an officer;

(h)every reference to a voluntary arrangement under Part 1 of the Insolvency Act 1986 has effect as a reference to a voluntary arrangement under that Part as applied in relation to building societies by section 90A of, and Schedule 15A to, the Building Societies Act 1986;

(i)any requirement to send a notice or other document, or make a report, to the registrar of companies, has effect as a requirement to send that notice or document, or make that report, to the FSA and for the FSA to place it on the public file of the society concerned.

4.  In Parts 2 and 3 of the 2009 Act, and in any provision of the Insolvency Act 1986 applied by those Parts, “contributory”, in relation to a building society—

(a)means every person liable to contribute to the assets of the society in the event of its being wound up, and

(b)for the purposes of all proceedings for determining, and all proceedings prior to the determination of, the persons who are deemed to be contributories, includes any person alleged to be a contributory, and

(c)includes persons who are liable to pay or contribute to the payment of—

(i)any debt or liability of the building society being wound up, or

(ii)any sum for the adjustment of rights of members among themselves, or

(iii)the expenses of the winding up,

but does not include persons liable to contribute by virtue of a declaration by the court under section 213 (imputed responsibility for fraudulent trading) or 214 (wrongful trading) of the Insolvency Act 1986.

5.  Expressions used in this Schedule (including in text inserted or substituted by this Schedule) have the same meaning as in the Building Societies Act 1986.

PART 2Modified application of Part 2 of the 2009 Act

6.  This Part sets out modifications to Part 2 of the 2009 Act (Bank Insolvency) as it applies in relation to building societies by virtue of section 90C of the 1986 Act.

Introduction

7.  Ignore section 91 of the 2009 Act (interpretation: “bank”).

8.  Subsections (5) and (6) of section 93 of the 2009 Act (interpretation: other expressions) do not apply in relation to any expression defined in this Schedule.

Building society insolvency order

9.  In section 95 of the 2009 Act (application), in subsection (1), ignore paragraph (c).

10.  In section 96 of the 2009 Act (grounds for applying)—

(a)in subsection (1), ignore paragraph (b);

(b)ignore subsections (4) and (5).

11.  In section 97 of the 2009 Act (grounds for making)—

(a)ignore subsection (2);

(b)in subsection (3), ignore “or (2)”.

12.  In section 98 of the 2009 Act (commencement), in subsection (2)(a), for “section 120” substitute “section 90D of the Building Societies Act 1986”.

Process of building society liquidation

13.—(1) In section 103 of the 2009 Act (general powers, duties and effect), in subsection (4) ignore paragraph (h).

(2) In that section, the table (Insolvency Act 1986) applies with the modifications set out in this paragraph.

(3) For the entry for section 154 substitute—

(4) Ignore the entry for section 187 (transfer of assets to employees).

(5) Ignore the entries for sections 216 (restriction on re-use of names) and 217 (personal liability for debts).

(6) For the entries for sections 218 and 219 substitute—

(7) For the entry for sections 423 – 425 substitute—

Termination of process, &c.

14.  In section 113 of the 2009 Act (voluntary arrangement)—

(a)in subsection (1), at the end insert “as applied in relation to building societies by section 90A of, and Schedule 15A to, the Building Societies Act 1986”;

(b)in subsection (2), ignore paragraph (b)(v);

(c)in subsection (6) at the end insert “and with the modifications made by Schedule 15A to the Building Societies Act 1986”.

15.  In section 114 of the 2009 Act (administration)—

(a)in subsection (1), for “(under paragraph 38 of Schedule B1 to the Insolvency Act 1986)” substitute “(under section 9 of the Insolvency Act 1986 as applied in relation to building societies by section 90A of, and Schedule 15A to, the Building Societies Act 1986)”;

(b)in subsection (4), for “the rescue of the bank as a going concern” substitute “the survival of the building society, and the whole or any part of its undertaking, as a going concern”.

16.  In section 115 of the 2009 Act (dissolution)—

(a)in subsection (2), ignore paragraph (b)(v);

(b)in subsection (4), for “registrar of companies” substitute “FSA”;

(c)in subsection (7), for “the registrar of companies shall register it” substitute “the FSA shall place it on the public file of the society concerned”;

(d)In subsection (8), for “the day of the registration of the notice” substitute “the day on which the notice is placed on the public file of the society”.

17.  In section 116 of the 2009 Act (dissolution: supplemental), in subsections (1) and (2) the references to the Secretary of State have effect as references to the FSA.

18.  Sections 1012 to 1023 and 1034 of the Companies Act 2006 (provisions as to property of dissolved company) apply in relation to the property of a building society dissolved under section 115 of the 2009 Act (as applied by this Schedule) as they apply to the property of a dissolved company.

Other processes

19.  Ignore sections 117 (insolvency as alternative order) and 118 (voluntary winding-up) of the 2009 Act.

20.—(1) Ignore section 119 of the 2009 Act (exclusion of other procedures); this paragraph, and section 88(1)(b) of the 1986 Act(15), make equivalent provision.

(2) A petition for the winding-up of a building society shall be dismissed on the making of a building society insolvency order in respect of the building society.

(3) Where a building society is in building society insolvency, no order may be made for the winding-up of the building society.

21.  Ignore sections 120 (notice to FSA of preliminary steps) and 121 (disqualification of directors) of the 2009 Act.

Miscellaneous

22.  In section 124 of the 2009 Act (transfer of accounts), after subsection (2) insert—

“(2A) The arrangements may—

(a)cancel shares in the building society;

(b)confer rights and impose liabilities in place of cancelled shares (whether by way of actual or deemed shares in a transferee building society or by way of other rights and liabilities in relation to a transferee bank).”.

23.  Ignore sections 130 (building societies), 131 (credit unions), 132 (partnerships) and 133 (Scottish partnerships) of the 2009 Act.

PART 3Modified application of Part 3 of the 2009 Act

24.  This Part sets out modifications to Part 3 of the 2009 Act (Bank Administration) as it applies in relation to building societies by virtue of section 90C of the 1986 Act.

Introduction

25.  In section 140 of the 2009 Act (objective 2: “normal” administration) the references in subsections (1) and (2) to the residual building society’s creditors as a whole include references to all holders of shares in the society.

Process

26.  In section 145 of the 2009 Act (general powers, duties and effect), in subsection (4) omit paragraph (d).

27.—(1) In section 145, table 1 (Schedule B1 to the Insolvency Act 1986) applies with the modifications set out in this paragraph.

(2) For the entries for paras. 59 to 64, see paragraph 29 below;

(3) For the entry for para. 65, substitute—

(4) For the entry for para. 75, substitute—

(5) For the entry for para. 80 (termination: successful rescue) substitute—

(6) Ignore the entry for para. 84 (termination: no more assets for distribution): paragraph 30 below makes equivalent provision;

(7) For the entry for para. 111 (interpretation) substitute—

28.—(1) In section 145, table 2 (other provisions of the Insolvency Act 1986) applies with the modifications set out in this paragraph.

(2) For the entry for section 168(4) (and para. 13 of Schedule 4) substitute—

(3) For the entry for sections 423 – 425 substitute—

General powers of administrator

29.—(1) This paragraph modifies the application of paragraphs 59 to 64 of Schedule B1 to the Insolvency Act 1986 (general powers of administrator); the modifications have effect in addition to those set out for those paragraphs in table 1 in section 145 of the 2009 Act.

(2) Subject to sub-paragraph (3), paragraphs 59 to 64 of Schedule B1 have effect as if they required the building society special administrator, in exercising powers under those paragraphs—

(a)to ensure compliance with the provisions of the Building Societies Act 1986, and

(b)not to appoint to be a director any person who is not a fit and proper person to hold that position.

(3) Sub-paragraph (2)(a) does not apply in relation to section 5, 6 or 7 of the Building Societies Act 1986.

No more assets for distribution

30.—(1) This paragraph makes provision equivalent to paragraph 84 of Schedule B1 to the Insolvency Act 1986 (termination: no more assets for distribution).

(2) A building society special administrator who thinks that the building society has no property which might permit a distribution to its creditors and shareholding members must send a notice to that effect to the FSA.

(3) The court may on the application of the building society special administrator disapply sub-paragraph (2) in respect of the building society.

(4) On receipt of a notice under sub-paragraph (2) the FSA must place it on the public file of the building society and record in that file the date on which it was placed there.

(5) The appointment of the building society special administrator ceases to have effect on the date on which the notice under sub-paragraph (2) is placed in the public file of the society.

(6) A building society special administrator who sends a notice under sub-paragraph (2) must as soon as is reasonably practicable—

(a)file a copy of the notice with the court, and

(b)send a copy of the notice to each creditor and shareholding member whose address is known.

(7) The building society is dissolved at the end of the period of three months beginning with the date on which the notice under sub-paragraph (2) was placed in its public file.

(8) On an application in respect of a building society by the building society special administrator or another interested person the court may—

(a)extend the period specified in sub-paragraph (7),

(b)suspend that period, or

(c)disapply sub-paragraph (7).

(9) Where an order is made under sub-paragraph (8) in respect of a building society the building society special administrator shall as soon as is reasonably practicable notify the FSA.

(10) A building society special administrator who fails without reasonable excuse to comply with sub-paragraph (6) commits an offence.

(11) An offence under sub-paragraph (10) shall be treated for all purposes as an offence under paragraph 84(9) of Schedule B1 to the Insolvency Act 1986.

Property of society dissolved under paragraph 30

31.  Sections 1012 to 1023 and 1034 of the Companies Act 2006 (provisions as to property of dissolved company) shall apply in relation to the property of a building society dissolved under paragraph 30 of this Schedule as they apply in relation to the property of a dissolved company.

Multiple transfers

32.—(1) In section 152 of the 2009 Act (property transfer from temporary public ownership), in subsection (1)—

(a)for paragraph (a) substitute—

“(a)make an order under section 85 (temporary public ownership) in respect of a building society, and”;

(b)in paragraph (b) for “(or from another bank which is or was in the same group as the bank)” substitute “(or from a bank which is or was in the same group as the building society”).

(2) Where the Treasury make an order under section 85 in respect of a building society, and later make a property transfer order from a bank which was in the same group as the building society, Part 3 of the 2009 Act, and any subordinate legislation made under that Part, applies to the transferor bank without the modifications made by section 90C of the Building Societies Act 1986 and this Order.

Termination

33.  In section 154 of the 2009 Act (winding-up or voluntary arrangement)—

(a)in subsection (2), in paragraph (a), the reference to paragraph 84 of Schedule B1 to the Insolvency Act 1986 has effect as a reference to paragraph 30 of this Schedule;

(b)in that subsection, in paragraph (b), at the end insert “as applied in relation to building societies by section 90A of, and Schedule 15A to, the Building Societies Act 1986”;

(c)in subsection (3), at the end insert “and with the modifications made by Schedule 15A to the Building Societies Act 1986”.

Miscellaneous

34.  Ignore section 155 of the 2009 Act (disqualification of directors).

35.—(1) Ignore section 157 of the 2009 Act (other processes); this paragraph makes equivalent provision.

(2) Before exercising an insolvency power in respect of a residual building society the FSA must give notice to the Bank of England, which may participate in any proceedings arising out of the exercise of the power.

(3) In sub-paragraph (2)—

(a)“residual building society” means a building society all or part of whose business has been transferred to a commercial purchaser or to a bridge bank in accordance with section 11 or section 12 of the 2009 Act respectively (as applied with modifications by section 84 of the 2009 Act), and

(b)“insolvency power” means—

(i)the FSA’s power to apply to the court for an administration order (see paragraph 11(1) of Schedule 15A to the Building Societies Act 1986), and

(ii)the FSA’s power to present a petition for the winding-up of a building society (see sections 37(1) and 89(2) of the Building Societies Act 1986).

36.  Ignore sections 158 (building societies), 159 (credit unions), 163 (partnerships) and 164 (Scottish partnerships) of the 2009 Act.

37.  Subsections (4) and (5) of section 166 of the 2009 Act (interpretation: general) do not apply to expressions defined in this Schedule.

Article 18

SCHEDULE 2Modified application of subordinate legislation

1.  The following instruments apply in relation to building societies as they apply in relation to banks, with the modifications set out in this Schedule—

(a)the Banking Act 2009 (Parts 2 and 3 Consequential Amendments) Order 2009(16);

(b)the Bank Administration (Sharing Information) Regulations 2009(17);

(c)the Banking Act 2009 (Bank Administration) (Modification for Application to Multiple Transfers) Regulations 2009(18);

(d)the Banking Act 2009 (Bank Administration) (Modification for Application to Banks in Temporary Public Ownership) Regulations 2009(19).

2.  The following general modifications apply to all of the instruments referred to in paragraph 1—

(a)references to “bank” (except in the term “bridge bank”) have effect as references to “building society”;

(b)references to “bank administration”, “bank administration order” and “bank administrator” have effect as references to “building society special administration”, “building society special administration order” and “building society special administrator”;

(c)references to Part 1 of the 2009 Act, or to any provision in that Part, have effect as references to that Part, or that provision, as applied to building societies with any modifications by section 84 of the 2009 Act (application of Part 1: general);

(d)references to Part 2 or 3 of the 2009 Act, or to any provision in Part 2 or Part 3, have effect as references to that Part, or that provision, as applied in relation to building societies by section 90C of the 1986 Act with any modifications specified in that section or in Schedule 1 to this Order;

3.  The modifications to the Banking Act 2009 (Parts 2 and 3 Consequential Amendments) Order 2009 (in addition to the modifications set out in paragraph 2) are—

(a)references to “bank insolvency”, “bank insolvency order” and “bank liquidator” are references to “building society insolvency”, “building society insolvency order” and “building society liquidator”;

(b)ignore article 4 (Finance (No 2) Act 1992);

(c)ignore article 5 (Financial Services and Markets Act 2000);

(d)ignore article 6 (Companies Act 2006);

(e)in article 7 (Dormant Bank and Building Society Accounts Act 2008), for “bank which is a bank within the meaning of section 91 of the 2009 Act” substitute “building society within the meaning of section 119 of the Building Societies Act 1986”;

(f)in the Schedule, ignore any enactment which does not apply in relation to building societies.

4.  The modifications to the Banking Act 2009 (Bank Administration) (Modification for Application to Multiple Transfers) Regulations 2009 (in addition to the modifications set out in paragraph 2) are—

(a)in regulation 1(2), ignore the definition of “a bank in temporary public ownership”;

(b)in regulation 3(1)(a), for “a share transfer order, in respect of the securities issued by a bank (or a bank’s holding company)” substitute “an order under section 85 of the Act (temporary public ownership) in respect of a building society”.

5.  The modifications to the Banking Act 2009 (Bank Administration) (Modification for Application to Banks in Temporary Public Ownership) Regulations 2009 (in addition to the modifications set out in paragraph 2) are—

(a)in regulation 2(1), for “a share transfer order to transfer the securities of a bank or a bank’s holding company into temporary public ownership”, substitute “an order under section 85 (temporary public ownership) of the Act in respect of a building society”;

(b)ignore references to a bank holding company.

EXPLANATORY NOTE

(This note is not part of the Order)

This Order applies Parts 2 (Bank Insolvency) and 3 (Bank Administration) of the Banking Act 2009 (c.1) (“the Banking Act”) in relation to building societies.

Articles 2 to 11 make substantive and consequential amendments to the Building Societies Act 1986 (c.53), including a new section 90C which applies Parts 2 and 3 of the Banking Act in relation to building societies. Parts 2 and 3 apply with the modifications specified in that section and in Schedule 1. In particular, the procedures in Parts 2 and 3 as they apply in relation to building societies are termed “building society liquidation” and “building society special administration”.

Articles 12 to 15 make amendments to other enactments in connection with the disqualification of directors, insolvency rules and the Financial Services Compensation Scheme. These replicate amendments made by Parts 2 and 3 of the Banking Act.

Articles 16 to 18 and Schedule 2 deal with the procedure for making rules, application of the Order to Northern Ireland and the application (with modifications) of subordinate legislation made under Parts 2 and 3 of the Banking Act to building societies.

Schedule 1 sets out further modifications to Parts 2 and 3 of the Banking Act as they apply in relation to building societies. Part 1 sets out general modifications relating to interpretation. Part 2 sets out modifications relating to building society insolvency. Part 3 sets out modifications relating to building society special administration.

An impact assessment of the effect of the Banking Act 2009 is available on HM Treasury’s website (www.hm-treasury.gov.uk).