On 7 July 2026, there was published a draft of The Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026.
Background
The Building Societies Act 1986 (the Act) provides the legislative foundation for the business model of building societies, which are mutually owned by their members (societies’ depositors and borrowers). The government has set out that it is committed to ensuring that the Act remains fit for purpose.
Key amendments
In particular, the draft SI:
- Inserts new paragraphs 19A to 19F of Schedule 2 to the Act to give building societies more flexibility over the use of common seals and executing documents in line with provisions applicable to companies under the Companies Act 2006. It replaces the common law requirement for building societies to execute documents by affixing their common seal.
- Makes provision in relation to the funding limit in section 7 of the Act. The core requirements of the wholesale funding limit calculation are not changing. Building societies must continue to ensure that wholesale funding accounts for more than 50% of their total funding. But the draft Order makes an adjustment to the calculation, in accordance with section 7(9B) of the Act, by specifying certain sources of funding which are excluded from wholesale funding for the purposes of the funding limit calculation.