BSOG 2.2 Preliminary matters

The terms negotiated between the parties in a merger will be set out in a formal agreement. In the case of a transfer of engagements, Section 94(6) of the 1986 Act requires the extent of the transfer, and in practice the other agreed terms, to be recorded in an Instrument of Transfer. For an amalgamation, Section 93(2) of the 1986 Act requires the parties to agree on a Memorandum and Rules for the successor society, and each to approve the terms of the amalgamation by Merger Resolutions, so that there must be agreement on the terms. The Prudential Regulator1 will expect the Instrument of Transfer or amalgamation agreement to be signed before the Prudential Regulator1 approves the Schedule 16 statement, although it will be conditional on, among other things, approval by members and confirmation by the Prudential Regulator1. In both cases the boards of the societies will have approved the Instrument or agreement and the Schedule 16 statement and, in the case of an amalgamation, the Memorandum and Rules of the successor society. Before such approval by the boards, drafts of the proposed Memorandum and Rules should have been cleared with the FCA and the Prudential Regulator1. The Rules of transferee societies should provide that members of transferor societies are not disenfranchised for any period after the merger is effected (see BSOG 2.3.16 G and rule 4(9) of the BSA Model Rules 5th edition).