This Article provides the framework for Non-Performing Exposure (NPE) securitisation, defining terms integral to the regulatory process. A qualifying traditional NPE securitisation must demonstrate a non-refundable purchase price discount of at least 50% from the outstanding amount at the point of transfer to a Special Purpose Entity (SSPE).

Risk weights for securitisation positions are primarily set at a minimum of 100%, with specific provisions for senior positions in qualifying traditional NPE securitisations. Institutions employing the Internal Ratings-Based (IRB) Approach must exclude certain methodologies when calculating risk-weighted exposures and must accurately assess non-refundable purchase price discounts, factoring in realised losses throughout the transaction's lifespan.