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Short Sale Agreement Template for Netherlands

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Key Requirements PROMPT example:

Short Sale Agreement

"I need a Short Sale Agreement under Dutch law for a hedge fund trading Dutch equities through a prime broker, with specific provisions for daily margin calculations and automated buy-in procedures if the position remains open beyond March 2025."

Document background
The Short Sale Agreement is a specialized financial contract used in the Netherlands when parties wish to engage in short selling transactions of securities or other financial instruments. This document is essential for institutional investors, traders, and financial institutions operating in Dutch financial markets who engage in short selling strategies. The agreement must comply with both Dutch national regulations, particularly the Financial Markets Supervision Act (Wft), and EU-wide regulations such as the EU Short Selling Regulation (236/2012). It typically includes detailed provisions on securities borrowing arrangements, margin requirements, risk management procedures, and settlement mechanisms. The Short Sale Agreement is particularly important in today's sophisticated financial markets where short selling is a common trading strategy requiring careful documentation and risk management.
Suggested Sections

1. Parties: Identification of the seller and buyer, including full legal names, addresses, and registration details

2. Background: Context of the transaction, including the nature of the assets being sold short and the general purpose of the agreement

3. Definitions: Key terms used throughout the agreement, including financial terms specific to short selling

4. Subject Matter: Detailed description of the securities or assets subject to the short sale

5. Transaction Structure: Mechanics of the short sale, including borrowing arrangements and delivery obligations

6. Price and Payment Terms: Agreement on sale price, payment method, and timing

7. Margin Requirements: Details of initial and maintenance margin requirements

8. Representations and Warranties: Statements of fact and assurances from both parties regarding their capacity and authority

9. Closing Conditions: Prerequisites that must be satisfied before the transaction can be completed

10. Term and Termination: Duration of the agreement and circumstances under which it can be terminated

11. Default and Remedies: Events constituting default and available remedies for the non-defaulting party

12. Governing Law and Jurisdiction: Specification of Dutch law as governing law and jurisdiction for disputes

Optional Sections

1. Regulatory Compliance: Additional provisions for compliance with specific regulatory requirements, used when parties are subject to particular regulatory oversight

2. Tax Provisions: Specific tax-related provisions and allocations, used when tax implications need to be explicitly addressed

3. Broker Arrangements: Details of any broker involvement and their obligations, used when a broker is involved in the transaction

4. Security Arrangements: Additional security or collateral provisions, used when extra security is required

5. Force Majeure: Provisions for unforeseen circumstances, used when parties want specific protection against external events

6. Confidentiality: Provisions for maintaining confidentiality of transaction details, used when sensitive information is involved

7. Assignment: Rights and restrictions regarding assignment of the agreement, used when transfer rights need to be specifically addressed

Suggested Schedules

1. Schedule 1 - Asset Details: Detailed description of the securities or assets subject to the short sale

2. Schedule 2 - Pricing Mechanism: Detailed calculation methods and formulas for determining prices and adjustments

3. Schedule 3 - Margin Calculations: Detailed methodology for calculating and maintaining margin requirements

4. Schedule 4 - Required Notices: Forms and templates for required notices under the agreement

5. Schedule 5 - Broker Terms: Terms and conditions related to broker services if applicable

6. Appendix A - Compliance Requirements: Detailed regulatory compliance requirements and procedures

7. Appendix B - Standard Settlement Instructions: Details of payment and settlement arrangements

Authors

Alex Denne

Head of Growth (Open Source Law) @ ºÚÁÏÊÓÆµ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Relevant legal definitions



































Clauses

































Relevant Industries

Financial Services

Investment Banking

Securities Trading

Asset Management

Hedge Funds

Investment Management

Banking

Professional Services

Legal Services

Relevant Teams

Legal

Compliance

Risk Management

Trading

Operations

Settlement

Portfolio Management

Investment

Finance

Treasury

Corporate Affairs

Relevant Roles

Trading Manager

Investment Officer

Risk Manager

Compliance Officer

Legal Counsel

Portfolio Manager

Securities Operations Manager

Investment Analyst

Chief Investment Officer

Financial Controller

Settlement Officer

Prime Brokerage Relationship Manager

Head of Trading

Managing Director - Trading

Legal Director

Industries







Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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