Section 1009: Securities reflecting dividends on certain shares etc: exclusion of section 1008
2988.This section is the first of two that qualify section 1008. It is based on section 209A(1), (2) and (4) of ICTA.
2989.The section applies where a security is linked to shares of the issuing company or any of its associated companies. The effect is that if the consideration given for the security exceeds the principal secured, the increase provided for by section 1008 is not made, but the rules in section 1007 concerning issue at a premium do apply.
2990.Section 1009 does not apply if the link to shares of a company or its associated companies arises solely because a bank or securities house has issued, as part of its normal business, securities based on a “qualifying index”. This could happen if the basket of shares forming the subject matter of the index includes shares in the issuing bank itself or in one of its associated companies.
2991.The second qualification is in section 1012.
