The Building Societies Act 1986 (Modifications) Order 2024
The Building Societies Act 1986 (Modifications) Order 2024 was made on 14th December 2024 and came into force on 1st January 2025. The Order modifies the Building Societies Act 1986 to make it easier for building societies to raise capital and to provide greater flexibility in the way they operate.
Key changes
The main changes made by the Order are as follows:
- Removal of the cap on the amount of capital that building societies can raise. This will allow building societies to raise more capital to support their lending and other activities.
- Introduction of a new type of capital instrument, known as a “Tier 2 capital instrument”. This will provide building societies with greater flexibility in the way they raise capital.
- Changes to the rules on the distribution of profits. These changes will give building societies more flexibility in the way they distribute profits to their members.
- Changes to the rules on the appointment of directors. These changes will make it easier for building societies to appoint directors with the skills and experience that they need.
- New powers for the Prudential Regulation Authority (PRA). The PRA will be given new powers to supervise building societies and to take action to protect depositors and other creditors.
Impact of the changes
The changes made by the Order are expected to have a number of positive impacts on building societies, including:
- Increased access to capital. The removal of the cap on the amount of capital that building societies can raise will allow them to raise more capital to support their lending and other activities. This will help to ensure that building societies can continue to provide affordable mortgages and other financial products to their members.
- Greater flexibility. The introduction of a new type of capital instrument and the changes to the rules on the distribution of profits will give building societies greater flexibility in the way they operate. This will allow them to better meet the needs of their members and to compete more effectively in the financial services market.
- Stronger supervision. The new powers for the PRA will help to ensure that building societies are properly supervised and that depositors and other creditors are protected.
Conclusion
The Building Societies Act 1986 (Modifications) Order 2024 is a significant piece of legislation that will have a number of positive impacts on building societies. The changes made by the Order will make it easier for building societies to raise capital, provide greater flexibility in the way they operate, and ensure that they are subject to strong supervision. These changes will help to ensure that building societies can continue to play a vital role in the UK financial system.
The Building Societies Act 1986 (Modifications) Order 2024
The AI has provided us with the news.
I’ve asked Google Gemini the following question, and here’s its response.
UK New Legislation a new article on 2024-12-17 09:04 titled “The Building Societies Act 1986 (Modifications) Order 2024”. Please write a detailed article on this news item, including any relevant information. Answers should be in English.
85