1.   Competent and resolution authorities shall assess the impact of the failure of an investment firm on financial markets, other institutions or funding conditions on a regular basis and at least every two years and on the basis of:

2.   The values of the indicators shall be determined on the basis of the indicators as specified in Annex III. Where the indicator values of Annex II are not available, the assessment referred to in paragraph 1 shall be made on the basis of proxies correlated to the greatest extent possible with the indicators as specified in Annex III. Where proxies are not available, competent and resolution authorities may replace the indicators referred to in Annex II with other relevant indicators.

3.   The threshold for the total quantitative score shall be set by competent and resolution authorities.

4.   An investment firm with a total quantitative score equal to or higher than the threshold referred to in paragraph 3 shall be regarded as an institution the failure of which would be likely to have a significant negative effect on financial markets, other institutions or funding conditions.

5.   Where an investment firm has been identified as a G-SII or an O-SII in accordance with Article 131(1) of Directive 2013/36/EU or has been classified as Category 1 on the basis of the guidelines on common procedures and methodologies for SREP issued in accordance with Article 107(3) of that Directive, competent and resolution authorities may, without applying paragraphs 1 to 4 of this Article, establish that the failure of that institution would be likely to have a significant negative effect on financial markets, other institutions or funding conditions.