It is for the directors of a society to assess the case for transfer, and they must explain and recommend their decision to the members. However, the Prudential Regulator's2 staff are willing to discuss with a society the procedures to be followed and the information required to ensure that the members can reach fully informed decisions. Societies are strongly recommended to consult the Prudential Regulator2 early on in the formative stages of transfer proposals. Such consultation will, of course, be treated in the strictest confidence. It will be helpful, also, to have regard to the indicative timetable set out in BSOG 3.92.222
This chapter considers each stage of the transfer procedure in chronological order. The remainder of this section gives a synopsis of the relevant requirements of the 1986 Act, which are then discussed in more detail in subsequent sections, as follows:
- (1) 2
BSOG 3.32, Terms of a Transfer, considers the mandatory provisions of Section 100 of the 1986 Act concerning the successor company's obligation to treat former shareholders of the society as depositors with it, and the Statutory Cash Bonus. It also considers the mandatory provisions of Sections 102B to D of the 1986 Act, concerning distributions to members who are Trustee Account Holders, the statutory restrictions on distributions to members in Section 100, and the permissive provisions of Sections 100 and 102A. The protective provisions for specially formed successor companies are also discussed.2
BSOG 3.42, Information Provided to Members, discusses the form and content of the statutory Transfer Statement and the Transfer Summary, and the accompanying rationale and other statements by the board, and describes the form of application to be made to the Prudential Regulator for approval of the Transfer Statement.2
BSOG 3.52, General Meetings and Resolutions, discusses the register of members and members' entitlement to vote, the arrangements for general meetings, the conduct of voting on the Transfer Resolutions and the scrutineers' report.2
BSOG 3.62, Confirmation, describes the form of application to the Prudential Regulator for confirmation of a transfer, and the procedures which the Prudential Regulator expects to follow in considering and hearing written and oral representations and in reaching its decision.2
BSOG 3.72, Transfers Under Direction, describes the modified procedure to be followed when a society has been directed by the Prudential Regulator to transfer its business to a company and to proceed by board resolution.2
- (7) 2
- (8) 2
The provisions of the 1986 Act concerning transfers are in Sections 97 to 102D of, and paragraph 30 of Schedule 2 and Schedule 17 to the 1986 Act, where two types of transfer of business are provided for:
to a specially formed company, known as conversion; or
to an existing company, known as a takeover.
The procedures are the same in each case, except that the specification of the turnout required to pass the shareholding members' resolution to approve a takeover is, in effect, higher than is required to approve a conversion. The 1986 Act also provides that a specially formed company shall have qualified protection from takeover for up to five years after the vesting date.
[Note: a takeover may take the form of a transfer of business of a society to a subsidiary of the society which is an existing company carrying on business as a going concern, as in the case of Halifax plc (formerly Halifax Syndicated Loans Limited).]