New Clause 4

Part of Financial Mutuals Arrangements Bill – in a Public Bill Committee am 10:00 am ar 25 Ebrill 2007.

Danfonwch hysbysiad imi am ddadleuon fel hyn

Transfers to subsidiaries: distribution of funds

‘(1) An order under section (Transfers to subsidiaries of other mutuals) may provide for this section to have effect.

(2) Subsection (3) applies if the terms of a transfer to which the order applies include provision for part of the funds of the transferor or the mutual society of which the transferee is a subsidiary (the holding mutual) to be distributed in consideration of the transfer among the members of—

(a) the transferor,

(b) the holding mutual, or

(c) both the transferor and the holding mutual.

(3) The provision for the distribution must be authorised as follows—

(a) it must not exceed the limits prescribed by order under subsection (4), and the distribution must be approved (in the case of the transferor) by the transfer resolution or (in the case of the holding mutual) by a resolution of such description as the Treasury specifies by order;

(b) if the provision for a distribution exceeds the prescribed limits, it must be approved by each of the resolutions mentioned in paragraph (a).

(4) The Treasury must by order authorise distributions of funds to members by mutual societies participating (directly or through a subsidiary) in transfers to which an order mentioned in subsection (1) applies, subject to limits specified by or determined in accordance with the order.

(5) A transfer resolution is—

(a) in relation to a building society, each of the resolutions required pursuant to paragraph 30 of Schedule 2 to the Building Societies Act 1986 (c. 53);

(b) in relation to a friendly society, the resolution required by section 86(2)(b) of the Friendly Societies Act 1992 (c. 40);

(c) in relation to an industrial and provident society, the resolution required by section 52 of the Industrial and Provident Societies Act 1965 (c. 12).

(6) Expressions used in this section and in section (Transfers to subsidiaries of other mutuals) have the same meaning as in that section.

(7) Subsections (4) to (7) of that section apply to an order under this section as they apply to an order under that section.’.—[Ed Balls.]