Legal Dictionary of Pakistan
Quick lookup for English, Urdu, and Latin legal terms used in Pakistani jurisprudence.
Swap
n. Commercial law. 1. An exchange of one security for another. 2. A financial transaction between two parties, usu. involving an intermediary or dealer, in which payments or rates are exchanged over a specified period and according to specified conditions.
currency swap
An agreement to swap specified payment obligations denominated in one currency for specified payment obligations denominated in a different currency.
interest-rate swap
An agreement to exchange interest receipts or interest-payment obligations, usu. to adjust one's risk exposure, to speculate on interest-rate changes, or to convert an instrument or obligation from a fixed to a floating rate - or from a floating to a fixed rate. ( The parties to such an agreement are termed "counterparties."
plain-vanilla swap
A typical interest-rate swap that involves one counterparty's paying a fixed interest rate while the other assumes a floating interest rate based on the amount of the principal of the underlying debt. ( The underlying debt, called the "notional" amount of the swap, does not change hands - only the interest payments are exchanged. interest unity See unity of interest under UNITY.
stock swap
In a corporate reorganization, an exchange of one corporation's stock • for another corporation's stock.