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The Short Sale Contract serves as the primary legal instrument for facilitating short selling transactions in the Australian securities market. This document is essential when an investor or institution intends to sell securities they do not own, typically speculating on a decline in the security's value. The contract must comply with the Corporations Act 2001 and ASIC Market Integrity Rules, which govern short selling activities in Australia. It includes crucial elements such as borrowing arrangements, margin requirements, risk disclosures, and settlement procedures. The agreement is designed to protect all parties involved while ensuring transparency and regulatory compliance in the Australian financial markets.

1. Parties: Identification of the parties entering into the short sale agreement, including the seller, broker, and any other relevant parties

2. Background: Context of the agreement and general purpose of the short sale transaction

3. Definitions: Key terms used throughout the agreement defined for clarity and legal certainty

4. Short Sale Terms: Specific details of the short sale transaction including security details, quantity, and pricing mechanism

5. Margin Requirements: Details of initial and maintenance margin requirements, including calculation methods and trigger points

6. Borrowing Arrangements: Terms and conditions for borrowing the securities, including lending fees and recall provisions

7. Risk Disclosure: Mandatory disclosure of risks associated with short selling, including potential unlimited losses

8. Representations and Warranties: Standard declarations by both parties regarding their capacity and authority to enter into the agreement

9. Settlement Procedures: Process and timing for settling the short sale transaction

10. Default Events: Circumstances constituting default and consequences thereof

11. Termination: Conditions and process for terminating the agreement

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