AI Summary of Article 500d Temporary calculation of the exposure value of regular-way purchases and sales awaiting settlement in view of the COVID-19 pandemic
This provision outlines the regulatory framework permitting institutions to calculate exposure values for regular-way purchases and sales awaiting settlement until 27 June 2021. Institutions must classify cash from regular-way sales and securities from regular-way purchases as assets per the relevant Article.
Regarding accounting methods, those applying trade date accounting must eliminate offsets between receivables and payables, while institutions using settlement date accounting must reflect full commitments for purchases. Notably, only under specific conditions can institutions offset cash related to sales and purchases, emphasising the necessity for compliance with trading book valuation standards.
Article 500d Temporary calculation of the exposure value of regular-way purchases and sales awaiting settlement in view of the COVID-19 pandemic
1. By way of derogation from Article 429(4), until 27 June 2021, institutions may calculate the exposure value of regular-way purchases and sales awaiting settlement in accordance with paragraphs 2, 3 and 4 of this Article.
2. Institutions shall treat cash related to regular-way sales and securities related to regular-way purchases which remain on the balance sheet until the settlement date as assets in accordance with point (a) of Article 429(4).