1.   Institutions shall calculate the indirect exposure value to a client arising from derivative contracts listed in Annex II to Regulation (EU) No 575/2013 and credit derivative contracts, where the derivative contracts were not directly entered into with that client but the underlying debt or equity instrument was issued by that client, in accordance with the methodology set out in Articles 2 to 5 of this Regulation.

2.   By way of derogation from paragraph 1, where the underlying instruments are included in a debt, equity or credit default swap index or a collective investment undertaking, or where the derivative contracts have multiple underlying reference names, institutions shall calculate the indirect exposure values to a client arising from the derivative contracts referred to in paragraph 1 and the contribution of that exposure to the exposure to a client in accordance with the methodology set out in Article 6.

3.   Where the derivative and credit derivative contracts referred to in paragraph 1 are allocated to the trading book, following the calculation of the indirect exposure values to a client arising from those contracts, institutions shall include those exposure values into the exposures to that client in the trading book. After aggregation, negative net exposures to the client shall be set to zero.

4.   By way of derogation from paragraphs 1 and 2, where the derivative and credit derivative contracts referred to in paragraph 1 are allocated to the non-trading book and where, following the calculation of the indirect exposure values to a client arising from those contracts, the indirect exposures have a negative value, institutions shall set to zero those exposure values before counting them towards the exposures to that client.