CG53425 - Debt on a security: essential characteristics of

Both speeches in the House of Lords emphasised that for a debt to be the debt on a security it should be capable of being

• held as an investment; and
• realised at a profit.

These conditions are, to some extent, interrelated, but it is important that both should be satisfied. For example, a debt may be regarded as a good investment. But if it cannot be realised at a profit it cannot be a debt on a security. These points are discussed in the following paragraphs.