Building Societies (Amendment) Act 2006

Amendment of section 18 of Principal Act.

8.— Section 18 of the Principal Act is amended—

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

“(1) Subject to section 17, a building society may raise funds including, with the approval of the Central Bank, funds in a currency other than the currency of the State, to be used for the objects of the society—

(a) by the issue of shares of one, or more than one, denomination, either with or without accumulating interest which do not constitute own funds, and may repay such funds,

(b) by the issue of—

(i) deferred or other shares, or

(ii) any other securities,

which in each case constitute own funds, and

(c) by receiving deposits or issuing securities or any other means (other than the issue of shares or securities of the kind referred to in paragraphs (a) and (b)).”,

(b) by substituting the following for subsection (3):

“(3) (a) A society shall ensure that its total liabilities under paragraph (c) of subsection (1) do not exceed such proportion of the aggregate of its total liabilities under paragraphs (a) and (b) of that subsection as the Central Bank specifies in a notice given to the society, and the Central Bank shall issue a notice for the purpose of this subsection whenever the occasion requires.

(b) In calculating whether its total liabilities under paragraph (c) of subsection (1) do not exceed such proportion of the aggregate of its total liabilities under paragraphs (a) and (b) of that subsection a society—

(i) shall not, in calculating the liabilities arising from the issue of securities under paragraph (b)(ii) of that subsection, include in its calculations the value of any subordinated loan capital, as referred to in the Codified Banking Directive, that has been issued by it, and

(ii) shall, in calculating the liabilities arising from the issue of securities under paragraph (c) of that subsection, include in its calculations the value of any such subordinated loan capital that has been issued by it.”,

(c) by substituting the following for subsection (5):

“(5) Where the board of directors of a building society is of the opinion that to do so is in furtherance of one or more than one of the objects of the society (other than giving security or providing collateral under this subsection) the society may give security for or provide collateral in respect of—

(a) any money that it borrows or raises,

(b) any other obligations or liabilities incurred or assumed by it whether as principal or guarantor in respect of a body or an approved housing body as referred to in section 28(1) in which the society has invested, or has supported, as the case may be, and

(c) any money borrowed or raised or obligations or liabilities incurred or assumed by a body or an approved housing body as referred to in section 28(1) in which the society has invested, or has supported, as the case may be.”,

and

(d) by inserting the following after subsection (8):

“(9) In this section ‘ own funds’ has the meaning given to it by the European Communities (Licensing and Supervision of Credit Institutions) Regulations 1992 ( S.I. No. 395 of 1992 ).”.