Securities-based Swaps Clause Samples

Securities-based Swaps. A securities-based swap is a futures contract involving one or more long positions and one or more short positions in different financial instruments. Settlement does not take place through the delivery of the underlying financial instruments, but by means of a monetary settlement based on the difference between the swap price and the market price on the expiry date. This price will be determined by the Bank on the basis of realisable market prices for the underlying financial instruments in the swap. The Client may purchase or sell the swap at any time during the term of the contract. If the swap is sold the Client will be charged interest in respect of his period of swap ownership. This interest will be based on the gross underlying value of the swap.