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Building Societies Act 1965

Constitution of building societies - Bonus balloting shares and bonus ballots

31A: Bonus balloting shares and bonus ballots

You could also call this:

“Rules for special shares that could win you prizes in a building society”

You can join a building society that offers bonus balloting shares. When you buy these shares, your money goes into a special fund. Each year, some of the money earned by this fund is given out as prizes to people who own these shares. The society holds a bonus ballot to decide who wins.

There are rules about how much prize money can be given out each year. It can’t be more than 2% of the total fund or 20% of all the money given to shareholders as prizes and interest, whichever is less.

All prizes must be paid in cash. However, if you win and ask for it, the society can lend you money instead of giving you cash. This loan would be secured against your property and should give you about the same value as the cash prize.

Even though this might sound like gambling, it’s allowed under the Gambling Act 2003. The building society can do this as long as they follow the rules set out in section 137 of the Building Societies Act.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM371639.

Topics:
Money and consumer rights > Banking and loans Money and consumer rights > Savings and retirement Housing and property > Buying and selling homes
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Part 2 Constitution of building societies
Bonus balloting shares and bonus ballots

31ABonus balloting shares and bonus ballots

  1. Subject to this section and to any regulations made under section 137, a society may, from time to time, issue shares (to be called bonus balloting shares) to any persons who may subscribe for them.

  2. All subscriptions on bonus balloting shares, and such other money as may be prescribed, shall form a separate fund in each society that issues them.

  3. A proportion of the annual earnings of the bonus balloting shares fund shall, from time to time, be distributed as prizes to holders of the shares pursuant to a bonus ballot.

  4. For the purposes of subsection (3), the proportion of annual earnings to be distributed as prizes shall not, in any financial year, exceed—

  5. an amount equal to 2% of the total fund held in that financial year; or
    1. an amount equal to 20% of the total sum distributed to holders of bonus balloting shares in respect of that financial year by way of prizes under subsection (3) and interest on the shares,—
        1. whichever is the less.

      1. All prizes under this section shall be paid in cash.

      2. Notwithstanding subsection (5), it shall not be unlawful for a society, at the request of a prizewinner and instead of a cash prize, to advance money to that prizewinner, on the security of a mortgage of land, on such terms and conditions as may be agreed and as will yield to the prizewinner benefits approximately equivalent in value to the cash prize.

      3. The provisions of this section shall apply notwithstanding anything to the contrary in the Gambling Act 2003.

      4. Repealed
      Notes
      • Section 31A: inserted, on , by section 9(1) of the Building Societies Amendment Act 1980 (1980 No 92).
      • Section 31A(7): amended, on , by section 374 of the Gambling Act 2003 (2003 No 51).
      • Section 31A(8): repealed (with effect on 1 April 1981 and applying with respect to the tax on income derived in the income year that commenced on that date and in every subsequent year), on , by section 12(3) of the Income Tax Amendment Act 1981 (1981 No 33).