The Building Societies (Floating Charges and Other Provisions) Order 2016

• Citation: S.I. 2016/679
• Sections: 7

Section 1 Citation, commencement, interpretation and application

(1) This Order may be cited as the Building Societies (Floating Charges and Other Provisions) Order 2016, and subject to paragraph (2) comes into force on the day after the day on which it is made.

(2) Articles 5 and 7 come into force immediately after articles 2, 3 and 4.

(3) In this Order “ the Act ” means the Building Societies Act 1986 .

(4) The amendments made by articles 2 to 5 and 7 apply in relation to a floating charge created by a building society on or after the day on which this Order comes into force.

Section 2 Floating charges: application of companies winding up legislation

In Schedule 15 to the Act (application of companies winding up legislation to building societies) for paragraph 16 substitute—

(16)

(1) Section 122 (circumstances in which company may be wound up by the court) of the Act does not apply in relation to a building society whose principal office is situated in England and Wales.

(2) Section 122 has effect in relation to a building society whose principal office is situated in Scotland as if subsection (1) were omitted.

Section 3 Floating charges: application of other companies insolvency legislation

In section 90A of the Act (application of other companies insolvency legislation to building societies), in paragraph (c)—

(a) after “England and Wales” insert “, Scotland”; and

(b) after “receivers and managers” insert “, or receivers,”.

Section 4 Floating charges: application of other companies insolvency legislation

(1) Schedule 15A to the Act (application of other companies insolvency legislation to building societies) is amended as follows.

(2) In Part 1 (general mode of application)—

(a) in paragraph 1(2)(a) for “and II , Chapter I of Part III, Parts” substitute “, II, III ,”;

(b) in paragraph 2(2)(b) after “receiver” insert “, other than a reference in section 29(2), 72A or 251 of the Insolvency Act 1986 or in Article 5(1) or 59A of the Insolvency (Northern Ireland) Order 1989 ,”;

(c) in paragraph 3 at the end insert—

(3) Any reference in any of the enactments, as so applied, to the register shall have effect as a reference to the public file.

(d) for paragraph 5A substitute—

(5A) In this Schedule—

“deposit” and “relevant deposit” have the meaning given by paragraph 1A of Schedule 15 ; and

“scheme manager” has the same meaning as in the Financial Services and Markets Act 2000 .

(3) In Part 2 (modified application of Parts 1 and 2 and Chapter 1 of Part 3 of the Insolvency Act 1986)—

(a) in the heading for “Parts I and II and Chapter I of Part III” substitute “Parts I to III”;

(b) for paragraph 27 substitute—

(27) Subsection (3) of section 40 of the Act (payment of debts out of assets subject to floating charge), as applied to a building society, has effect as if the reference to general creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

(27A) Sections 42 to 49 of the Act (administrative receivers) are omitted.

(27B) Subsection (1) of section 51 of the Act (power to appoint receiver), as applied to a building society, has effect as if for the words “an incorporated company (whether a company registered under the Companies Act 2006 or not)” there were substituted “a building society”.

(27C) Subsection (3) of section 59 of the Act (priority of debts), as applied to a building society, has effect as if the reference to ordinary creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

(27D) Subsection (1) of section 67 of the Act (report by receiver), as applied to a building society, has effect as if—

(a) the reference to the Financial Conduct Authority included a reference to the scheme manager; and

(b) in paragraph (d) the reference to other creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

(27E) Subsection (1) of section 70 of the Act (interpretation for Chapter 2), as applied to a building society, has effect as if—

(a) in the definition of “company” for the words “an incorporated company (whether or not a company registered under the Companies Act 2006)” there were substituted “a building society”; and

(b) the definition of “the register” were omitted.

(27F) Chapter 4 of Part 3 of the Act (prohibition of appointment of administrative receiver), as applied to a building society, has effect as if—

(a) in section 72A (floating charge holder not to appoint administrative receiver)—

(i) in subsections (1) and (2) the word “qualifying” and in subsection (3) the definition of “holder of a qualifying floating charge in respect of a company’s property” were omitted; and

(ii) subsections (4)(a), (5) and (6) were omitted; and

(b) sections 72B to 72H (exceptions to prohibition) were omitted.

(4) In Part 3 (modified application of Parts 2, 3 and 4 of the Insolvency (Northern Ireland) Order 1989 ) for paragraph 49 substitute—

(49) Paragraph (3) of Article 50 of the Order (payment of debts out of assets subject to floating charge), as applied to a building society, has effect as if the reference to general creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

(50) Articles 52 to 59 of the Order (administrative receivers) are omitted.

(51) Article 59A of the Order (floating charge holder not to appoint administrative receiver), as applied to a building society, has effect as if—

(a) in paragraph (1) the word “qualifying” were omitted; and

(b) paragraphs (2), (3)(a), (4) and (5) were omitted.

(52) Articles 59B to 59J of the Order (exceptions to prohibition) are omitted.

Section 5 Amendment of the Building Societies (Financial Assistance) Order 2010

(1) The Building Societies (Financial Assistance) Order 2010 is amended as follows.

(2) In article 10 (application of other companies insolvency legislation to building societies) for paragraphs (a) and (b) substitute “for “or receivers,” in paragraph (c) there were substituted “receivers or administrative receivers””.

(3) In article 11 (application of other companies insolvency legislation to building societies)—

(a) for paragraph (2) substitute—

(2) In paragraph 1(2)(a), for “, II, III,” substitute “and II, Chapters I, II and III of Part III, Parts”.

(2A) In paragraph 1(2)(b), for “Parts III, IV ” substitute “Part III, Part IV (except Articles 59A to 59J)”.

(b) for paragraph (6) substitute—

(6) For paragraph 27A substitute—

(27A) In Chapters I and II of Part III of the Act, as applied to a building society, the following provisions have effect as if a reference to the creditors or unsecured creditors of the society included a reference to the holders of shares in the society—

(a) subsection (1) of section 46 of the Act (information to be given by administrative receiver);

(b) subsection (2) of section 47 of the Act (statement of affairs to be submitted);

(c) subsection (2)(a) and (b) of section 48 of the Act (report by administrative receiver);

(d) subsection (1) of section 65 of the Act (information to be given by receiver);

(e) subsection (2) of section 66 of the Act (building society’s statement of affairs); and

(f) subsection (2)(a) and (b) of section 67 of the Act (report by receiver).

(27AA) Subsection (1) of section 48 of the Act, as applied to a building society, has effect as if—

(a) the reference to the Financial Conduct Authority included a reference to the scheme manager; and

(b) in paragraph (d) the reference to other creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits.

(27AB) Sections 49 and 68 of the Act (committee of creditors), as applied to a building society, have effect as if the reference to the society’s unsecured creditors included a reference to the holders of shares in the society.

(6A) Until the coming into force of paragraph 12(3)(b) of Schedule 9 to the Small Business, Enterprise and Employment Act 2015 (“the 2015 Act ”), paragraph 27AA (treated as substituted by paragraph (6) above) is to be read as also providing that subsection (2) of section 48 of the Insolvency Act 1986, as applied to a building society, has effect as if the reference to a meeting of the society’s unsecured creditors included a reference to a meeting of holders of shares in the society.

(6B) Until the coming into force of paragraph 13 of Schedule 9 to the 2015 Act , paragraph 27AB (treated as substituted by paragraph (6) above) is to be read as providing that section 49 of the Insolvency Act 1986, as applied to a building society, has effect as if the reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.

(6C) Until the coming into force of paragraph 15 of Schedule 9 to the 2015 Act , paragraph 27AB (treated as substituted by paragraph (6) above) is to be read as providing that section 68 of the Insolvency Act 1986, as applied to a building society, has effect as if the reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.

(6D) Until the coming into force of paragraph 14(3)(b) of Schedule 9 to the 2015 Act , paragraph 27D has effect as if the existing provision became sub-paragraph (1) and after that sub-paragraph there were inserted—

(2) Subsection (2) of that section, as so applied, has effect as if the reference to a meeting of the society’s unsecured creditors included a reference to a meeting of the holders of shares in the society.

(6E) Omit paragraph 27F .

(c) for paragraph (9) substitute—

(9) For paragraph 50 substitute—

(50) In Part 4 of the Order, as applied to a building society, the following provisions have effect as if a reference to the creditors or unsecured creditors of the society included a reference to the holders of shares in the society—

(a) paragraph (1) of Article 56 of the Order (information to be given by administrative receiver);

(b) paragraph (2) of Article 57 of the Order (statement of affairs to be submitted); and

(c) paragraph (2)(a) and (b) of Article 58 of the Order (report by administrative receiver).

(50A) Article 58 of the Order, as applied to a building society, has effect as if—

(a) in paragraph (1)—

(i) the reference to the Financial Conduct Authority included a reference to the scheme manager; and

(ii) in sub-paragraph (d) the reference to other creditors included a reference to shareholding members of the society in respect of deposits which are not relevant deposits; and

(b) in paragraph (2) the reference to a meeting of the society’s unsecured creditors included a reference to a meeting of holders of shares in the society.

(50AA) Article 59 of the Order (committee of creditors), as applied to a building society, has effect as if the reference to a meeting of creditors included a reference to a meeting of holders of shares in the society.

(10) Omit paragraphs 51 and 52 .

Section 6 Amendment of the Scotland Act 1998

In Schedule 8 to the Scotland Act 1998 (modifications of enactments), in paragraph 23 (amendments of the Insolvency Act 1986), in sub-paragraphs (2A) and (4A) for “Financial Services Authority” substitute “Financial Conduct Authority”.

Section 7 Amendment of the Financial Services (Banking Reform) Act 2013 (Commencement ( No. 8) and Consequential Provisions) Order 2015

The Financial Services (Banking Reform) Act 2013 (Commencement (No. 8) and Consequential Provisions) Order 2015 is amended as follows—

(a) in Schedule 1—

(i) in paragraph 3 omit paragraph (b) (and the “and” before it); and

(ii) in paragraph 4 omit paragraph (c) (and the “and” before it); and

(b) in Schedule 2, in paragraph 9(a) omit “, (6)(a)”.