Building Societies (Amendment) Act 2006

Amendment of section 28 of Principal Act.

12.— Section 28 of the Principal Act is amended—

(a) by substituting the following for subsection (1):

“(1) Subject to section 36, a building society may—

(a) invest in a body to which this section applies,

(b) support a body to which this section applies or an approved housing body that is to say, provide any of the following services to (or in the case of subparagraph (iii) to or on behalf of) a body to which this section applies in which it invests, or to an approved housing body—

(i) loans with or without security and whether or not at interest,

(ii) grants of money,

(iii) guarantees, indemnities or security of any nature in respect of the discharge of their liabilities or the performance of their obligations, and

(iv) the use of services or property, whether or not for payment.”,

(b) in subsection (2)—

(i) by substituting the following for paragraph (a):

“(a) Subject to paragraph (b), a society shall not under this section invest in a body to which this section applies (other than an associated designated credit institution) whose objects enable it to—

(i) carry on activities which are outside of the powers of the society, or

(ii) invest in other bodies to which this section applies,

but this shall not prevent a society from investing in and supporting a body to which this section applies for a period of not more than 3 months pending the alteration of the objects of that body.”,

(ii) by inserting the following after paragraph (b):

“(c) A dispensation referred to in paragraph (b) may enable a society to invest in a body to which this section applies whose objects enable it to make loans of the type referred to in section 22 to persons who are not members of the society, subject to such terms and conditions as the Central Bank considers appropriate.”,

(c) in subsection (3), by substituting “membership rights of a body to which this section applies” for “membership rights of a body corporate”,

(d) in subsection (4), by substituting “body to which this section applies” for “body corporate” in each place where “body corporate” occurs, and

(e) in subsection (5)—

(i) by inserting the following after the definition of “approved housing body”:

“ ‘ body to which this section applies’ means a company or other body corporate or an unincorporated body of persons but does not include an individual or an approved housing body;”,

(ii) by substituting the following for the definition of “corresponding membership rights”:

“ ‘ corresponding membership rights’ , in relation to a body to which this section applies means such rights (other than rights arising from the holding of shares) as are attributable to membership of the body;”,

and

(iii) by inserting the following after the definition of “corresponding membership rights”:

“ ‘ invest’ means—

(a) acquire, subscribe for and hold shares or corresponding membership rights or securities in, or

(b) form or take part in forming a body to which this section applies.”.