A deferred purchase agreement, or DPA, is a financial instrument which derives its value from the value of another reference asset such as an index, stock, or commodity. It is a financial contract between two parties where one party undertakes to deliver to the other some pre-determined delivery assets, rather than cash at the maturity of the contract. There are other conditions specified in the contract such as final value calculation, definitions of the underlying variables, the parties' contractual obligations, and the notional amount. The actual number of delivery assets to be delivered at maturity is determined by the performance of the reference asset. In other words, when you apply for a DPA, you agree to buy the delivery assets which will be delivered to you on the maturity date of the contract. The number of delivery assets that will be delivered will be determined by how the underlying reference asset performs during the term and the final value calculation of the DPA. DPAs are structured as securities and may (depending on your circumstances) provide certain tax efficiencies.
DPAs have been used by managed investment schemes to access offshore markets, for Structured Products as well as listed Exchange Traded Products (ETP).