Document background
The Share Swap Agreement is a sophisticated financial instrument used in Danish market practice to facilitate synthetic exposure to shares without direct ownership. This document is essential when parties wish to create a derivative arrangement where one party agrees to pay the returns on a specified share or basket of shares in exchange for receiving either a fixed or floating rate of return from the counterparty. The agreement must comply with Danish financial regulations, including the Danish Capital Markets Act and applicable EU directives, particularly regarding derivatives trading and market conduct. It is commonly used for investment strategies, hedging purposes, or to gain economic exposure to shares while avoiding direct ownership complications. The document includes comprehensive provisions for calculation methodologies, payment obligations, market disruption events, and early termination rights, all structured within the framework of Danish law and market practice.
