1.   Set-off arrangements entered into between an institution and a single counterparty shall qualify as set-off arrangements referred to in Article 76(2)(c) of Directive 2014/59/EU where they relate to rights and liabilities arising under financial contracts or derivatives.

2.   Set-off arrangements entered into between an institution and one or more counterparties shall qualify as set-off arrangements referred to in Article 76(2)(c) of Directive 2014/59/EU in any of the following circumstances:

(a)	where the arrangements are linked to the counterparty's activity as a central counterparty, in particular for the activity covered by a default fund as referred to Article 42 of Regulation (EU) No 648/2012;

(b)	where the arrangements are related to rights and obligations towards systems as defined in Article 2(a) of Directive 98/26/EC or other payment or securities settlement systems and are linked to their activity as payment or securities settlement systems.

3.   Resolution authorities may decide, in individual cases, that set-off arrangements entered into between an institution and one or more counterparties so far as they relate to other types of rights and liabilities than those referred to in paragraphs 1 and 2 may qualify as set-off arrangements pursuant to Article 76(2)(c) of Directive 2014/59/EU where the arrangements are recognised for risk mitigation purposes under the applicable prudential rules and the protection, in particular by non-separability, is a condition for that recognition.