Updated 21/11/2024
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Article 4 - Underlying exposures to transactions which themselves have underlying assets

Article 4

Underlying exposures to transactions which themselves have underlying assets

1.   When assessing the underlying exposures of a transaction (transaction A) which itself has an underlying exposure to another transaction (transaction B) for the purpose of Articles 5 and 6, an institution shall treat the exposure to transaction B as replaced with the exposures underlying transaction B.

2.   Paragraph 1 shall apply as long as the underlying exposures are exposures to transactions with underlying assets.