[X1 CHAPTER 1U.K. General provisions
Article 325U.K. Approaches for calculating the own funds requirements for market risk
1.An institution shall calculate the own funds requirements for market risk of all trading book positions and non-trading book positions that are subject to foreign exchange risk or commodity risk in accordance with the following approaches:
(a)the standardised approach referred to in paragraph 2;
(b)the internal model approach set out in Chapter 5 of this Title for those risk categories for which the institution has been granted permission in accordance with Article 363 to use that approach.
2.The own funds requirements for market risk calculated in accordance with the standardised approach referred to in point (a) of paragraph 1 shall mean the sum of the following own funds requirements, as applicable:
(a)the own funds requirements for position risk referred to in Chapter 2;
(b)the own funds requirements for foreign exchange risk referred to in Chapter 3;
(c)the own funds requirements for commodity risk referred to in Chapter 4.
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4.An institution may use in combination the approaches set out in points (a) and (b) of paragraph 1 of this Article on a permanent basis within a group in accordance with Article 363.
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Textual Amendments
F3 Article 325aU.K. Exemptions from specific reporting requirements for market risk
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Textual Amendments
Article 325b U.K. Permission for consolidated requirements
1 . Subject to paragraph 2, and only for the purpose of calculating net positions and own funds requirements in accordance with this Title on a consolidated basis, institutions may use positions in one institution or undertaking to offset positions in another institution or undertaking.
2 . Institutions may apply paragraph 1 only with the permission of the competent authorities which shall be granted if all the following conditions are met:
( a ) there is a satisfactory allocation of own funds within the group;
( b ) the regulatory, legal or contractual framework in which the institutions operate guarantees mutual financial support within the group.
3 . Where there are undertakings located in third countries, all the following conditions shall be met in addition to those set out in paragraph 2:
( a ) such undertakings have been authorised in a third country and either satisfy the definition of a credit institution or are recognised third-country investment firms;
( b ) on an individual basis, such undertakings comply with own funds requirements equivalent to those laid down in this Regulation;
( c ) no regulations exist in the third countries in question which might significantly affect the transfer of funds within the group. ]