On 22 October 2026, there was published a statutory instrument (SI) The Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026 (the Order).
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).
This Order implements the latest measures in a programme of updates that the Government has been making to the Act to ensure it continues to operate effectively.
Summary
This Order amends the Act in order to assimilate provisions for building societies on the use of common seals and the execution of documents to equivalent provisions in the Companies Act 2006. This will enable building societies to choose whether to execute documents through the use of a common seal or to execute documents by certain authorised signatories.
The Order also makes provision in relation to the wholesale funding limit for building societies in section 7 of the Act. Section 7(9B) permits HM Treasury to make regulations which specify certain sources of funding which are to be excluded from the wholesale funding limit calculation. The changes to the funding limit calculation in this Order are intended to ensure that building societies are not disincentivised from practices which support prudent management of liquidity and that instruments issued to meet the Bank of England’s Minimum Requirements for Own Funds and Eligible Liabilities are treated appropriately.
Timing
The Order comes into force on 1 January 2027.