Building societies gain company-style execution and revised funding limit

Building societies move to company-law-style execution and a revised wholesale funding-limit calculation while the 50% mutual funding requirement stays in placeLegislation. A society may have a common seal but need not have oneLegislation; a society that keeps a seal must have its name engraved in legible characters on it. Failure is an offence by the society and every officer in default, punishable on summary conviction by a fine in England and Wales and a fine up to level 3 on the standard scale in Northern Ireland, with no offence element forming part of the law of Scotland. The society's rules need only address the form, custody and use of a seal if it has one, and the old requirement that the seal bear the registered name is removed.

In England and Wales and Northern Ireland a document is executed by affixing the common seal or by signatureLegislation. Signature is valid if made on the society's behalf by two authorised signatories — every director and the secretary — or by a director in the presence of an attesting witness, with offices held by firms signed by an authorised individualLegislation. A document so signed and expressed to be executed by the society has the same effect as if sealedLegislation. A purchaser in good faith for valuable consideration, including a lessee, mortgagee or acquirer of a property interest, may rely on a document purporting to be so signed. A person signing for more than one society must sign separately in each capacity. A society may by deed appoint an attorney to execute deeds or other documents, effective inside and outside the United Kingdom. A deed needs full execution plus delivery, with delivery presumed on execution. In Scotland, signature, subscription or electronic authentication under the Requirements of Writing (Scotland) Act 1995 has effect as execution under sealLegislation, and a society need not have a seal. A society with a seal may have an official seal for use outside the United Kingdom as a facsimile plus the place of use, affixed by an authorised agent whose authority persists as conferred or until the counterparty learns of revocation.

The wholesale funding limit is unchanged in principle: wholesale funding must not exceed 50% of total fundingLegislation. Three funding sources are now specified as disregarded from the calculationLegislation. A facility under the Bank of England's Sterling Monetary Framework, as it has effect from time to time, is a specified liquidity insurance facilityLegislation. Secondary non-preferential debt within section 387A(3)(b) of the Insolvency Act 1986 is a specified debt instrument for amounts issued with a view to maintaining minimum requirements for own funds and eligible liabilitiesLegislation. A requirement to hold level 1 assets under Article 10 of the Liquidity Coverage Ratio (CRR) Part of the PRA Rulebook is a specified PRA rule, so sums under sale and repurchase agreements entered into to comply with it are disregardedLegislation. The impact assessment counts 43 affected businesses with familiarisation-only costs.

The Treasury must review the execution and funding-limit provisions and publish the first report before the end of the five years beginning with 1 January 2027Legislation, then at intervals of no more than five yearsLegislation, assessing objectives, achievement, continued appropriateness and less onerous alternatives.

Legal basis is the Building Societies Act 1986 (Assimilation to Company Law and Changes to Funding Limit) Order 2026 (SI 2026/1115)Legislation, made on 21 October 2026Legislation, extending to England and Wales, Scotland and Northern IrelandLegislation and coming into force on 1 January 2027Legislation.