BSOG 1A.5 Considering an application

The FCA will consider, first, whether the application contains all the relevant information. It may ask the applicant to provide further information or clarify what has already been given.

If, in the opinion of the FCA, the application is defamatory, frivolous or vexatious, the FCA may decide that it would be inappropriate to consider it further. The applicant will be informed of such decision as soon as practicable. In such cases the FCA may give the applicant an opportunity (normally only once) to revise the application to take the FCA's opinion into account. If a revised application is received by the FCA within 10 working days of the FCA's notice that the previous application was unacceptable (or such other period as the FCA may, in the circumstances, consider reasonable), a further fee will not be payable.

If the FCA is satisfied that the application provides all the relevant information and is, on the basis of that information, a valid application for the purposes of paragraph 15 of Schedule 2, the FCA will send the application, together with any supporting information or documents provided by the applicant, to the society. The society will be asked to confirm that the applicant was qualified to make the application at the time it was made and, if so, invited to make written representations on it to the FCA. The FCA will also ask the society whether it wishes to make oral representations at a hearing held by the FCA. The FCA will normally expect a society to submit its representations, or to confirm that none are to be made, within 15 working days of receipt of the copy of the application.

Once the FCA has received the societys written representations, together with any supporting information or documents, a copy will be sent to the applicant with an invitation to make written comments on them to the FCA. The FCA will also ask whether the applicant wishes to make oral representations, irrespective of whether the society has indicated that it would wish to do so. The FCA will normally expect an applicant to provide written comments or to confirm that none are to be made within 15 working days of receipt of the invitation.

Once the FCA has received the applicants written comments, a copy of them will be sent to the society. This will normally be for information only. However, in any case where, in the opinion of the FCA, the applicant has introduced new matters which can properly be dealt with as part of the existing application, the society will be given the opportunity to make further representations. If the applicant has introduced new matters which, in the opinion of the FCA, cannot properly be dealt with as part of the existing application, the FCA may ask the applicant to make a new application or it may disregard the new matters for the purposes of the application under consideration. In the latter case the FCA will inform the applicant accordingly.

The FCA may seek further information or other documents from either the applicant or the society at any time.

Paragraph 15(2) of Schedule 2 sets out the criteria to which the FCA should have regard in considering an application:

1. (1)

   the purpose of the proposed communication must be on a subject relating to its (the societys) affairs;

2. (2)

   the FCA should have regard to the interests of the members as a whole;

3. (3)

   the FCA should have regard ... to all the other circumstances.

Paragraph 15(3) of Schedule 2 provides that the FCA may give a direction subject to such limitations or conditions as the FCA may think fit.

The FCA will consider each application on its merits. The purpose of the guidance revoked="20150401" in paragraphs BSOG 1A.5.10 G to BSOG 1A.5.20 G is to give a broad indication of the FCA's approach and the criteria to which it will have regard.

The 1986 Act does not define affairs. As a general proposition, the FCA considers that affairs will primarily relate to matters connected with the societys finances, its business activities and the manner in which it carries on those activities, and not just to the applicants personal affairs. Bearing in mind the considerations discussed in paragraph BSOG 1A.2.3 G, the matters about which the member wishes to communicate with other members, will, in the opinion of the FCA, normally need to be of a substantial nature and must relate to the particular society concerned. The FCA will expect the applicant to demonstrate not only why he or she is personally concerned about, or affected by, these matters (rather than simply being concerned or affected in some more general way) but also why it is necessary that this concern is communicated direct to other members.

Paragraph 15 of Schedule 2 requires each application to be considered separately by the FCA so that it cannot consider applications with the same, or similar purpose, or related to the same, or similar issue, as if they were a class application. So, for example, an application from a member wishing to obtain the required support of other members to stand for election to the board of directors of a society will be considered individually and on its merits, notwithstanding any previous decision the FCA may have taken on an application with the same, or similar, purpose.

The FCA will wish to be satisfied that the wording of the communication is consistent with the stated purpose of the application. It may invite the society to comment on the communication but the society cannot itself stipulate what its terms should be.

The FCA will balance the wider interests of the membership as a whole with those of any one individual member or group of members. The FCA will require the applicant to demonstrate that the communication raises matters which are likely to be of interest to the societys members generally or at least a substantial section of them. The FCA will take into consideration any evidence of support from other members of the society, should the applicant claim that this has already been given.

Whilst the right to make an application is open to all qualified members of the society, the FCA is of the opinion that, as a general proposition, access to the register is not an appropriate vehicle for the pursuit of a private grievance between a member and the society or the pursuit of a more general campaign affecting the building societies sector as a whole. The Act provides for a reference to the Financial Services Ombudsman for the investigation of a customer complaint and the 1986 Act provides for a reference to the High Court (in Scotland, the Court of Session) for the resolution of a membership dispute.

The 1986 Act does not require that a person who is given access to the register must write to all the members. To do so would mean that the right of access was of little practical value. In the opinion of the FCA, it is acceptable for the applicant to write, for example, to a random selection of members or to those living in a particular geographical area. However, the FCA may require the communication to indicate whether or not it has been sent to all the members or only a proportion of them (and, if so, on what basis that proportion was selected).

The circumstances that may be appropriate for the FCA to take into account can only be identified in the particular case at the particular time. As a general proposition, the FCA will take into account any relevant information in respect of the applicants relationship with the society. This could include, for example, previous applications for access to the register. The FCA will also take into account whether the applicant has raised the issue about which he or she is concerned at the societys annual general meeting or whether he or she would be able to do so at a future meeting. The FCA will at the same time take into account any evidence that the society has attempted to frustrate the members legitimate right to speak on the issue at the annual general meeting or seems likely to do so on a future occasion.

The FCA will also take into account the likely effect on building societies generally should the applicant be given access to the register of members of a particular society and write to the other members as proposed. It will consider whether, should it direct that an applicant be given access to the register of one society, this could have any adverse impact on other societies, for example, a possible risk to confidence. The FCA will also expect the applicant to explain why it is not possible to obtain support in some other way and so why it is necessary to have the privilege of accessing the register of members. The FCA will expect an applicant to show an awareness of these wider considerations and will wish to be assured that they will be appropriately reflected in both the tone and the content of the communication.

An applicant will be expected to disclose to the FCA whether he or she is acting in a purely personal capacity or on behalf of, or in concert with, any other person or institution, or whether he or she has an interest in the society beyond the fact of being a member of it. Where the applicant has not made such a disclosure, but the FCA has reason to believe that he or she may be acting for or in concert with another party, the FCA will make enquiries to establish the facts and will invite the applicant to comment on its findings. Each application to inspect the register of members is considered on its merits. Where an application is made by a member whom the FCA considers to be in effect acting on behalf of a third party commercial institution, it will in particular have regard to:

1. (1)

   the nature of the members own interest in the application and the third party institutions objectives;

2. (2)

   the interest of members as a whole in preserving privacy and the societys right to commercial confidentiality in its membership list;

3. (3)

   any interaction between the application and the detailed and mandatory procedures under the 1986 Act governing mergers of building societies or as the case may be transfers of business to commercial companies; and

4. (4)

   other means open to the member and the third party institution to communicate with members on the relevant subject.

The interests of the members as a whole should not be confused with the personal interests of one or more individual members.

The 1986 Act imposes a specific restriction on any person who has taken information from the register of members. That is, the information may not be further disclosed (by that person or anyone to whom the information has been disclosed in accordance with the direction given by the FCA) except with the consent of the member to which it relates or for the purposes for which the 1986 Act provides. This is an essential safeguard against the abuse of the privilege of being given access to the register of members and contravention of the restriction is a criminal offence.

The FCA will consider what limitations or conditions it should properly attach to a direction in each particular case. However, and without prejudice to the exercise of its discretion, the FCA will normally consider limitations or conditions in the following areas:

1. (1)

   whether the information taken from the register may be further disclosed and, if so, those to whom it may be disclosed and, in particular, if the FCA decides to direct access to the register of members in the circumstances outlined in paragraph BSOG 1A.5.18 G, it will impose such conditions as may be necessary to ensure that the third party institution does not directly or indirectly gain access to the information in the register or use the proposed communication by the applicant with other members to damage the society;

2. (2)

   that the communication must be in writing and addressed separately to each of the members to whom it is sent;

3. (3)

   that the material terms of the communication sent must be those seen by the FCA at the time it reached its decision on the application;

4. (4)

   that the communication is accurate, is not offensive, is not misleading (including any inference that the communication is being made by, or on behalf of, the society), is not likely to bring about a loss of confidence in the society (or in societies generally) or otherwise harm its current or future business;

5. (5)

   that the communication must be sent within a specified time;

6. (6)

   that the applicant is given a specified period during which the relevant information is to be made available.