Short title, commencement and extent

I beg to move amendment No. 4, in clause 4, page 5, line 4, leave out ‘Financial Mutuals Arrangements’ and insert

‘Building Societies (Funding) and Mutual Societies (Transfers)’.

With this it will be convenient to discuss Government amendment No. 5.

New clause 4 applies if the terms of a transfer from a mutual society to a subsidiary of another mutual society includes a distribution of funds  or bonus. Any such distribution must be approved by a resolution of the society that approves the transfer, whose terms will be set out in secondary legislation. If the distribution exceeds certain limits, it must be approved by resolution of each society concerned. Those limits will be set by the Treasury in an order.

The aim of the amendments is to ensure that similar procedures for approving distribution of funds apply where the new procedure is used as currently apply in the case of mergers between building societies. The mutuals sector will be consulted on whether to adopt that approach in the implementing order, and amendment No. 9 would make an appropriate change in the long title to reflect new clauses 3 and 4.

Amendment agreed to.

Amendments made: No. 5, in clause 4, page 5, line 7, leave out ‘different provisions or’.

No. 6, in clause 4, page 5, line 9, leave out subsection (3).—[Ed Balls.]

Question proposed, That the clause, as amended, stand part of the Bill.

I should have said in my earlier remarks that Government amendment No. 5 makes a technical change to clause 4 on commencement powers. Amendment No. 4 gives a new short title to the Bill—the Building Societies (Funding) and Mutual Societies (Transfers) Bill.

Question put and agreed to.

Clause 4, as amended, ordered to stand part of the Bill.