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"authorised building society" means a building society (within the meaning of the Building Societies Act 1986[2]) which is a UK authorised person for the purposes of Part XII of the Act[3];

"capital", in relation to an authorised building society, consists of the following - 

(a) any shares of a class defined as deferred shares for the purposes of section 119 of the Building Societies Act 1986 which have been issued by that society; and

(b) the general reserves of that society.

Acquiring and increasing control over an authorised building society
     2.  - (1) In any case where a person ("the acquirer") - 

(a) proposes to take a step which would result in his - 


(i) acquiring control over an authorised building society in the case mentioned in paragraph (a) of subsection (2) of section 179 of the Act (holding of 10% or more of the shares), or

(ii) acquiring an additional kind of control over such a society of the kind mentioned in paragraph (a) of subsection (4) of that section (holding of shares), or



(b) without himself taking any such step, has acquired such control or such an additional kind of control over such a society,

the acquirer is exempt from any obligation imposed by section 178 of the Act to notify the Authority of his proposal or his acquisition unless paragraph (2) applies.

    (2) This paragraph applies if the proposed step would result in the acquirer holding, or the acquirer holds, a holding of 10% or more of the capital of that authorised building society.

    (3) In paragraph (2), "acquirer" means - 

(a) the acquirer;

(b) any of the acquirer's associates; or

(c) the acquirer and any of his associates.

    (4) In any case where a controller of an authorised building society - 

(a) proposes to take a step which would result in his acquiring an increase of his control over that society in the circumstances mentioned in paragraph (a) of subsection (1) of section 180 of the Act (increase in percentage of shares), or

(b) without himself taking any such step, has acquired increased control over that society in those circumstances,

the controller is exempt from any obligation imposed by section 178 of the Act to notify the Authority of his proposal or his acquisition unless paragraph (5) applies.

    (5) This paragraph applies if the proposed step would result in the controller increasing, or the controller has increased, his holding of the capital of that authorised building society by any of the steps mentioned in section 180(2) of the Act.

    (6) In paragraph (5), "controller" means - 

(a) the controller;

(b) any of the controller's associates; or

(c) the controller and any of his associates.

Reducing control over an authorised building society
     3.  - (1) In any case where a controller of an authorised building society - 

(a) proposes to take a step which would result in his ceasing to have control of the kind mentioned in paragraph (a) of subsection (4) of section 179 of the Act (holding of shares) over that society, or

(b) without himself taking any such step, has ceased to have such control,

the controller is exempt from any obligation imposed by section 190 of the Act to notify the Authority of his proposal or that cessation unless paragraph (2) applies.

    (2) This paragraph applies if the proposed step would result in the controller ceasing, or the controller has ceased, to hold 10% or more of the capital of that authorised building society.

    (3) In any case where a controller of an authorised building society - 

(a) proposes to take a step which would result in his reducing his control over that society in the circumstances mentioned in paragraph (a) of subsection (1) of section 181 of the Act (decrease in percentage of shares), or

(b) without himself taking any such step, has reduced his control in those circumstances,

the controller is exempt from any obligation imposed by section 190 of the Act to notify the Authority of his proposal or that reduction unless paragraph (4) applies.

    (4) This paragraph applies if the proposed step would result in the controller reducing, or the controller has reduced, his holding of the capital of that authorised building society by any of the steps mentioned in section 181(2) of the Act.

    (5) In paragraphs (2) and (4), "controller" means - 

(a) the controller;

(b) any of the controller's associates; or

(c) the controller and any of his associates.

Tony McNulty

Anne McGuire
Two of the Lords Commissioners of Her Majesty's Treasury

4th October 2001

[2] 1986 c. 53; see the definition in section 119(1).back

[3] See the definition in section 178(4).back

 © Crown copyright 2001