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Commonwealth Development Corporation Act 1999


Section 17: Acquisition of securities

48.Section 17 empowers the Secretary of State (or a person nominated by the Secretary of State) with the consent of the Treasury (see section 22(1)(j)) to acquire securities of CDC or one of its subsidiaries. The purchase of these securities will be paid for from money provided by Parliament.

49.Unlike the previous section, this provides for the Secretary of State to buy the securities. It also applies, not just when CDC is wholly Government-owned, but at any time after that.

50.It is unlikely that the power will be used to buy securities in the open market (although it could be used that way). It is more likely to be used to provide additional funds to CDC, by buying debt securities issued on terms that provide a commercial rate of return to the Secretary of State. Unlike section 16, here the meaning of “a nominated person” is restricted, by virtue of section 19(2), to a person who must hold and deal with securities or rights as the Secretary of State directs, and does not include an independent third party.

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