| Commentary

11 Purposes

| Commentary

B: ESTABLISHMENT AND CONSTITUTION

11 Purposes

A building society must have as its only or principal purpose that of making loans which are secured on residential property and are funded substantially by its members1. This criterion lies at the heart of what it is to be a building society and sets down its defining characteristics. According to guidance given by the Financial Services Authority (FSA), a failure, or projected failure, to comply with the criterion may cast doubt on the society’s longer-term commitment to remain as a building society2. The requirement that the funds of the society be raised primarily from

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