Building Societies operating on the Isle of Man are authorised under the Industrial and Building Societies Acts 1892 to 1986.  The Building Societies Act 1986 was initiated by the Financial Supervision Commission and it is under the provisions of this legislation, (Sections 2 and 4A), that an authorisation from the Commission is required before an Isle of Man incorporated, or Isle of Man branch of a United Kingdom incorporated, building society can effectively commence business.

A building society is defined as a society for the purposes of raising by the subscriptions of the members a stock or fund for:

(a) making advances to members out of the funds of the society upon security by way of mortgage of land situated inside or outside the Isle of Man, or

(b) making loans to, or depositing money with, building societies established under this Act or established in the United Kingdom under any enactment of Parliament relating to building societies.  Building societies authorised by the Commission under the Building Societies Act 1986 are exempt from the Banking Acts.