This notice is the Securities Act (Building Societies) Exemption Notice 2002.

This notice comes into force on 1 October 2002.

This notice expires on the close of 31 March 2013.

Clause 3: amended, on 28 September 2012, by clause 3 of the Securities Act (Extension of Term, Amendment, and Transitional Provision) Exemption Notice 2012 (SR 2012/294).

(1) In this notice, unless the context otherwise requires,—

(2) In this notice, unless the context otherwise requires, specified participatory security means,—

• (a) in clauses 5 and 6, a building society share; but does not include a share that—

  • (i) carries the right to payment of a dividend from the annual surplus or accumulated reserves of the building society; and

  • (ii) is irredeemable or redeemable only at the option of the building society; and

  • (iii) entitles the holder to participate in the assets of the building society on liquidation after the payment of all its other liabilities; and

• (b) in the definition of rights prospectus and clauses 7 to 8A, a building society share that—

  • (i) carries the right to payment of a dividend from the annual surplus or accumulated reserves of the building society; and

  • (ii) is irredeemable or redeemable only at the option of the building society; and

  • (iii) entitles the holder to participate in the assets of the building society on liquidation after the payment of all its other liabilities; and

• (c) in all other places where the term appears, a building society share.

(3) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.

(1) In this clause and in clause 6, specified participatory security has the meaning set out in clause 4(2)(a).

(2) Every designated building society and every person acting on its behalf are exempted from sections 33(3) and 53 to 53F of the Act and regulations 3(3), 7A(1), and 14(2) of the Regulations in respect of any specified participatory securities offered by the building society in the course of carrying on its principal business.

The exemptions in clause 5(2) are subject to the conditions—

• (a) that the building society has appointed a person as a trustee in respect of the specified participatory securities; and

• (b) that both the building society and that person have signed a trust deed relating to the securities, which applies as if the specified participatory securities were debt securities; and

• (c) that the provisions of the Act and the Regulations relating to trust deeds are complied with; and

• (d) that the trust deed is, at the date of allotment of the specified participatory securities, in full force and effect; and

• (e) that the building society complies with sections 53 to 53F of the Act in all respects as if the specified participatory securities were debt securities; and

• (f) that every registered prospectus that relates to the specified participatory securities contains all of the information, statements, certificates, and other matters specified in Schedule 2 of the Regulations that are applicable in all respects as if the specified participatory securities were debt securities; and

• (g) that every investment statement that relates to the specified participatory securities contains all of the information, statements, and other matters specified in Schedule 3D of the Regulations that are applicable in all respects as if the specified participatory securities were debt securities; and

• (h) that, if at the time that the offer is made the aggregate amount of any obligations of the building society that are secured by a mortgage or charge created by the society over any of its assets and that rank or will rank, after the allotment of the specified participatory securities, before those securities is material in the context of the society's overall business, no advertisement refers to those securities without also stating either that the securities are unsecured or the nature and ranking in point of security of the securities.

(1) In this clause and in clauses 8 and 8A, specified participatory security has the meaning set out in clause 4(2)(b).

(2) Every designated building society and every person acting on its behalf are exempted from sections 33(3) and 53 to 53F of the Act and regulations 3(3) and 7A(1) of the Regulations in respect of any specified participatory securities offered by the building society in the course of carrying on its principal business.

(3) Every designated building society and every person acting on its behalf are exempted from sections 33(3) and 53 to 53F of the Act and regulations 3(3) and 7A(1) of the Regulations in respect of specified participatory securities offered under a rights prospectus.

The exemption in clause 7(2) is subject to the conditions—

• (a) that the designated building society complies with sections 53 to 53F of the Act as if the specified participatory securities were equity securities; and

• (b) that every registered prospectus that relates to the specified participatory securities contains—

  • (i) all of the information, statements, certificates, and other matters specified in Schedule 1 of the Regulations that are applicable as if the specified participatory securities were equity securities; and

  • (ii) a description, and (where practicable) quantification, of all liabilities (including potential and contingent liabilities) that a person will or may incur as a holder of specified participatory securities; and

• (c) that every investment statement that relates to the specified participatory securities contains all of the information, statements, and other matters specified in Schedule 3D of the Regulations that are applicable as if the specified participatory securities were equity securities.

The exemption in clause 7(3) is subject to the conditions—

• (a) that the designated building society complies with sections 53 to 53F of the Act as if the specified participatory securities were equity securities; and

• (b) that a copy of the most recent annual financial statements of the designated building society laid before the designated building society at its annual general meeting in accordance with section 91(2) of the Building Societies Act 1965, and a copy of all reports required by that Act to be annexed or attached to those financial statements,—

  • (i) have previously been given or sent to the persons who were, at the time those financial statements were given or sent, holders of specified participatory securities or preference shares of the designated building society; or

  • (ii) are attached to every rights prospectus given or sent to any person under the Act; and

• (c) that all of the following matters are stated or contained in every rights prospectus:

  • (i) the matters specified in clauses 1, 9, 19(1), and 21 of Schedule 1 of the Regulations as if the specified participatory securities were equity securities:

  • (ii) the date of the statement of financial position included in the financial statements referred to in paragraph (b):

  • (iii) the place or places where copies of the financial statements and reports referred to in paragraph (b) can be obtained free of charge by any person to whom an offer of specified participatory securities is made:

  • (iv) a statement by the directors of the designated building society as to whether, after due inquiry by them in relation to the period between the date referred to in subparagraph (ii) and the specified date, there have, in their opinion, arisen any circumstances that materially adversely affect—

    • (A) the trading or profitability of the designated building society; or

    • (B) the value of its assets; or

    • (C) the ability of the designated building society to pay its liabilities due within the next 12 months; and

• (d) that every investment statement that relates to the specified participatory securities contains all of the information, statements, and other matters specified in Schedule 3D of the Regulations that are applicable as if the specified participatory securities were equity securities.

Every designated building society and every person acting on its behalf are exempted from regulation 14(1) of the Regulations in respect of any debt securities of which that building society is the issuer.

The exemption in clause 9 is subject to the condition that the aggregate amount of any obligations of the building society that are secured by a mortgage or charge created by the society over any of its assets and that rank or will rank, after the allotment of the debt securities, before those securities is not material in the context of the society's overall business.

Every designated building society and every person acting on its behalf are exempted from section 37A(1)(a) of the Act in respect of any offer of debt securities or specified participatory securities made as part of a continuous issue.

(1) The exemption in clause 11 is, in respect of any allotment of a debt security or specified participatory security made as part of a continuous issue, subject to the condition that the building society must not make the allotment unless the building society (or a person acting on its behalf) has, at least 3 working days before the subscriber subscribes for the debt security or specified participatory security, sent an investment statement relating to the debt security or specified participatory security—

• (a) to an address specified by the subscriber for this purpose; or

• (b) to the last address of the subscriber known to the building society.

(2) The exemption in clause 11 is subject to the further condition that, if an investment statement relating to the debt security or specified participatory security is sent—

• (a) by fax, the fax machine has generated a record of the transmission of the investment statement to the fax machine of the recipient; or

• (b) by other electronic means, the machine used to transmit the investment statement has not generated a record that the investment statement has failed to be transmitted.

Every designated building society is exempted from section 52(1) and (3) of the Act in respect of specified participatory securities registered on the register kept by that building society under section 51(1)(c) of the Act.

(1) The exemption from section 52(1) of the Act in clause 13 is subject to the condition that the register is, except when duly closed (but subject to any reasonable restrictions that the building society may impose, so that not less than 2 hours in each day is allowed for inspection), open to the inspection of any holder of specified participatory securities entered on the register, or the representative of the holder, in respect of the securities of that holder, without fee.

(2) The exemption from section 52(3) of the Act in clause 13 is subject to the condition that, on payment by any holder of specified participatory securities of the fee prescribed for the purposes of section 52(4) of the Act, the building society provides to that holder a copy of that part of the register kept under section 51(1)(c) of the Act that relates to specified participatory securities of that holder.

Every designated building society is exempted from section 54 of the Act in respect of debt securities and specified participatory securities issued by that building society.

The exemption in clause 15 is subject to the condition that the building society sends, or causes to be sent, to the security holder at any time on request and at least once every 6 months a written statement that properly evidences the nature and ownership of the security.

(1) The exemptions in this notice cease to apply to Canterbury Building Society on and after the date on which Canterbury Building Society becomes converted into a company under Part 7A of the Building Societies Act 1965.

(2) The exemptions in this notice cease to apply to Southern Cross Building Society on and after the date on which Southern Cross Building Society becomes converted into a company under Part 7A of the Building Societies Act 1965.