BSOG 2 Annex 4 Merger Confirmation Procedures

4.1

Introduction

4.1.1

G

This annex is for the guidance of those making written representations to the Authorityand/or those participating in oral confirmation hearings. It sets out the procedures which the Authority will normally follow.

4.1.2

G

The 1986 Act provides that when the necessary merger resolutions have been passed the societies must obtain confirmation by the Authorityof the merger in accordance with Section 93(2) (amalgamations) or Section 94(7) (transfers of engagements) of the 1986 Act. If the Authorityconfirms the merger itwill issue a registration certificate.

4.1.3

G

References to the relevant provisions of the 1986 Act are given in parenthesis in this annex. The term merger means either an amalgamation or a transfer of engagements as provided by sections 93 and 94 of the 1986 Act.

4.2

The role of confirmation

4.2.1

G

The role of the confirmation procedures is limited. Section 95(3) and (4) of the 1986 Act provide that the Authoritymust confirm a transfer unless it considers that:

(1)

some information material to the members decision about the merger was not made available to all the members eligible to vote; or,

(2)

the vote on any resolution approving the merger does not represent the views of the members eligible to vote; or,

(3)

some relevant requirement of the 1986 Act or the rules of any of the societies was not fulfilled.

4.2.2

G

These are the only grounds on which the Authoritymay refuse confirmation, or direct the society to remedy any defects. It is not the Authoritysfunction to make any judgement about the merits of the proposals which the members have approved.

4.2.3

G

If the Authorityfinds that there are defects, it may direct the society to take steps to remedy them. These include the calling of further meetings. If it is then satisfied that the defects have been substantially remedied, it must confirm the merger; if not, it must refuse confirmation (Section 95(6) of the 1986 Act).

4.2.4

G

The Authoritymay direct that non-fulfilment of some relevant requirement of the 1986 Act or of the rules of the society is to be disregarded, if it appears to the Authoritythat the failure could not have been material to the members decision (Section 95(5)). Relevant requirement in this context means a requirement of section 93, 94 or 95 of or Schedule 16 to the 1986 Act or of any rules prescribing the procedure to be followed by the society in approving or effecting the merger (Section 95(11) of the 1986 Act).

4.2.5

G

The 1986 Act provides that any accidental failure to send the notice of meeting and merger statement to any person entitled to receive them does not invalidate the proceedings at the general meeting (paragraph 22(3) of Schedule 2 to the 1986 Act).

4.3

Representations to the Authority

4.3.1

G

Any interested party has the right to make representations to the Authoritywith respect to the societies applications for confirmation. They should state clearly why the person making the representations claims to be an interested party e.g. membership of the society and the matters to which the representations are directed.

4.3.2

G

Written representations, or notice of a persons intention to make oral representations, or both, must be in writing. They must reach the Authorityat 25 The North Colonnade, Canary Wharf, London E14 5HSby the date quoted in the merger documentation issued to members and published in the official Gazettes and (usually) some newspapers. Persons who make written representations, but subsequently decide also to make oral representations must, nevertheless, give notice of that intention, in writing, to the Authorityby the same date (paragraphs 8 and 9 of Schedule 16 to the 1986 Act). The Authoritywill in general be prepared to use electronic rather than paper-based communication for notices and written representations if requested by the society or a prospective representer. A specific electronic address will be provided for that purpose, and some of the relevant procedures may have to be adapted accordingly.

4.3.3

G

Representations or notices to the Authoritywill fall into one of the following three categories:

(1)

Written representations only.

(2)

Written representations with notice of intention to make oral representations.

(3)

Notice of intention to make oral representations only.

4.3.4

G

The Authoritywill send copies of all written representations to the society, and will afford it an opportunity to comment on them (paragraph 9 of Schedule 16 to the 1986 Act).

4.3.5

G

Copies of the society's comments on representations in category 4.3.3(2) will be sent to those who made the representations so that they may concentrate their representations at oral hearings on the points which they consider to remain at issue. Persons making written representations who wish to see the society's comments must, therefore, also give notice of intention to make oral representations. Any documents referred to in the society's comments will be made available by the society for inspection at a specified place which will be notified to those making oral representations. (The society may, exceptionally, apply to put to the Authorityin confidence documents which the society considers to be commercially sensitive: the Authoritywill decide on hearing argument whether, and on what terms, to accept them as confidential). Persons in category 4.3.3(3)will be asked to inform the Authority, in advance of the hearing, of the subject and general grounds of the representations they intend to make. The Authoritywill pass this information to the society.

4.3.6

G

Interested parties may join together in making collective representations and they may also appoint a person, either one of their number or another, to represent them at the hearing. They should notify the Authorityin advance if this is what they intend to do.

4.4

Purpose of the hearing

4.4.1

G

The purpose of the hearing is to enable interested parties to make representations, and to enable the Authorityto make such enquiry as it considers necessary, both of the society and of those making representations, in order to reach an informed view on those aspects of the decision on confirmation to which the representations are directed. The Authoritywill examine all the representations, whether written or oral, in relation to the three statutory criteria described in paragraph 4.2.1. In the light of that examination, and consideration of all the representations and the society's response, the Authoritywill decide whether to confirm, or direct the society to correct any defects, or to refuse to confirm the merger. It is for the Authorityto decide whether the matters discussed in representations are relevant to the statutory criteria.

4.5

Persons hearing the applications

4.5.1

G

The hearing will be taken by a person or persons appointed by the Authorityto hear and decide the applications on its behalf, and they will be assisted by staff of the Authority.

4.6

Time and place

4.6.1

G

Hearings will normally start at about mid-morning on the day quoted in the merger documentation sent to members, and at a place which will be notified to the participants. If there are a significant number of persons wishing to make oral representations, then the hearing may extend beyond one day and may be adjourned from time to time and from place to place.

4.7

Procedure at the hearing

4.7.1

G

The Authorityexpects that oral hearings will be in public. Members of the general public and the Press will be asked to wait outside at the outset of the hearing. The participants will then be asked if any of them has good reason to object to the admission of the general public (including the Press). The Press and the general public will then be admitted, within the limits of the space available, unless an objection by a participant is upheld by the Authority. However, the Authoritymay decide that parts of the hearing shall be in private if that appears to it to be desirable (for example, if representers feel it necessary to disclose their personal affairs).

4.7.2

G

The procedure will be informal. While all participants will be expected to speak concisely and to avoid repetition, the Authoritywill be considerate towards those who are not professionally represented. The persons appointed to hear the applications may question the participants as the hearing proceeds. The sequence of events will be broadly as follows:

(1)

Any preliminary matters (such as the admission of the public or other procedural questions) will be dealt with.

(2)

The person chairing the hearing on behalf of the Authoritywill introduce the proceedings.

(3)

The representatives of the Societies will be invited to speak to their applications, including a description of the events at the meetings at which the merger resolutions were put to the members, a statement of the voting on the resolutions, and any other matters which they wish to introduce at that stage.

(4)

The other participants will be invited to speak to their representations. Where appropriate the Authoritywould expect to call them in a list marshalled, so far as possible, by subject matter.

(5)

The representatives of the society will be invited to reply to, or comment on, the points made by the other participants.

(6)

The other participants will be invited to comment on the society's replies.

4.7.3

G

The above procedure may be varied according to the circumstances at the hearing, and is intended only as a guide to the probable order of events. The hearing may be adjourned if the Authorityconsiders that necessary to enable facts to be checked or additional information to be obtained.

4.8

The Authority'sdecision

4.8.1

G

The Authoritywill not normally give an oral decision at the end of the hearing. The Authoritywill subsequently issue a written decision, setting out its reasons. A copy of the written decision will be sent to each of the participants in the hearing and to those who made written representations and, on request, to any other person. The decision may also be published.