Statutory Instrument 1989 No. 207

The Building Societies (Deferred Shares) Order 1989

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© Crown Copyright 1989

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1989 No. 207

BUILDING SOCIETIES

The Building Societies (Deferred Shares) Order 1989

The Building Societies Commission, with the consent of the Treasury and in exercise of the powers conferred on it by section 119(1) of the Building Societies Act 1986^[1], hereby makes the following Order:-

Citation and commencement
    1.    This Order may be cited as the Building Societies (Deferred Shares) Order 1989 and shall come into force on 1st April 1989.

Interpretation
    2.—(1)  In this Order-
"the Act" means the Building Societies Act 1986;
"approved", in relation to a resolution of the directors of the society means approved by the Commission prior to the passing thereof;
"dividend" means any distribution in respect of shares in the society other than interest or return of capital;
"society" in relation to deferred shares means a building society which proposes to issue or, as the case may be, has issued shares of a class which complies with article 3 below;
"the specified shares" means shares of a class which complies with article 3 below and "other shares" means shares issued by the society of a class which does not comply with article 3 below.
"subordinated debt" has the meaning assigned to that expression in paragraph 4 of Part III of the Schedule to the Building Societies (Supplementary Capital) Order 1988^[2].


    (2)  For the purposes of this Order-
 (a) a return on a share means the interest, dividend or combination of interest and dividend in respect of that share,
 (b) the rate of return in relation to a share, means the percentage of the principal amount of that share represented by the return on it; and
 (c) the return on a share in respect of a period shall be taken to accrue from day to day during that period.

Deferred Shares
    3.—(1)  Shares issued fully paid by a society upon terms which either-
 (a) have the effect of the key terms, or
 (b) have the effect of the key terms subject to an exception which does not extend beyond the permitted exception,
and are shares which are issued to persons each of whom has given notice to the board of directors of the society in writing that he is aware of the terms upon which those shares are to be issued and is prepared to subscribe for shares to such an amount as is specified in such notice upon those terms shall be shares of a class defined as deferred shares for the purposes of section 119(1) of the Act.

    (2)  In this article-
 (a) "the key terms" means the terms specified in paragraph 1 of the Schedule hereto, and
 (b) "the permittted exception" means the term specified in paragraph 2 of the Schedule hereto.

In witness whereof the common seal of the Building Societies Commission is hereunto fixed, and is authenticated by me, a person authorised under paragraph 14 of Schedule 1 to the Building Societies Act 1986, on
10th February 1989.


P. H. Gevers

Secretary to the Commission

We consent to this Order.

David Lightbown

Stephen Dorrell

Two of the Lords Commissioners of Her Majesty's Treasury

14th February 1989

[1] 1986 c. 53. back

[2] S.I. 1988/777. back

Explanatory Note