Policy background Policy objective
This Act amends the 1986 Act and also provide HM Treasury with the powers to make specific secondary legislation.
	It amends section 7 of the 1986 Act to enable the exclusion of the following sources of funding (as further specified by the Treasury in regulations) from the building society wholesale funding limit calculation: Bank of England liquidity insurance facilities, debt instruments raised to meet MREL requirements, and sums received under a repurchase agreement with a view to complying with a specified PRA rule. Without reducing financial stability or diluting the unique ownership model of building societies, this Act enables building societies to raise additional wholesale capital, which they can use to grow and compete with retail banks on a level footing, and which societies may then put towards supporting their members.
	The Act also amends the 1986 Act to explicitly allow the option of real-time virtual member participation in building societies’ meetings, and provides HM Treasury with the powers to make secondary legislation to further align the constitutional provisions in Part 2 of the 1986 Act concerning common seals and the execution of documents with modifications to company law. Both of these changes help modernise the 1986 Act, providing building societies with the same modern governance flexibilities as companies and help to reduce some burdens on the sector should they choose to adopt these changes.