Article 6
Capital requirements for business risk
1.
The capital requirements of a CSD for business risk shall be whichever of the following is higher:
(a)
the estimate resulting from the application of paragraph 2, minus whichever of the following is the lowest:
(i)
the net income after tax of the last audited financial year;
(ii)
the expected net income after tax for the current financial year;
(iii)
the expected net income after tax for the previous financial year where audited results are not yet available;
(b)
25 % of the CSD's annual gross operational expenses referred to in paragraph 3.
2.
For the purposes of point (a) of paragraph 1, a CSD shall apply all of the following:
(a)
estimate the capital necessary to cover losses resulting from business risk on reasonably foreseeable adverse scenarios relevant to its business model;
(b)
document the assumptions and the methodologies used to estimate the expected losses referred to in point (a);
(c)
review and update the scenarios referred to in point (a) at least annually.
3.
For the calculation of a CSD's annual gross operational expenses, the following shall apply:
(a)
the CSD's annual gross operational expenses shall consist of at least the following:
(i)
total personnel expenses including wages, salaries, bonuses and social costs;
(ii)
total general administrative expenses, and, in particular, marketing and representation expenses;
(iii)
insurance expenses;
(iv)
other employees' expenses and travelling;
(v)
real estate expenses;
(vi)
IT support expenses;
(vii)
telecommunications expenses;
(viii)
postage and data transfer expenses;
(ix)
external consultancy expenses;
(x)
tangible and intangible assets' depreciation and amortisation;
(xi)
impairment and disposal of fixed assets;
(b)
the CSD's annual gross operational expenses shall be determined in accordance with one of the following:
(i)
(ii)
Council Directives 78/660/EEC ( 3 ), 83/349/EEC ( 4 ) and 86/635/EEC;
(c)
the CSD may deduct tangible and intangible assets' depreciation and amortisation from annual gross operational expenses;
(d)
the CSD shall use the most recent audited information from their annual financial statement;
(e)
where the CSD has not completed business for one year from the date it starts its operations, it shall apply the gross operational expenses projected in its business plan.
( 2 ) Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (OJ L 243, 11.9.2002, p. 1).
( 3 ) Fourth Council Directive 78/660/EEC of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies (OJ L 222, 14.8.1978, p. 11).
( 4 ) Seventh Council Directive 83/349/EEC of 13 June 1983 based on the Article 54(3)(g) of the Treaty on consolidated accounts (OJ L 193, 18.7.1983, p. 1).
( 5 ) Commission Regulation (EC) No 1569/2007 of 21 December 2007 establishing a mechanism for the determination of equivalence of accounting standards applied by third country issuers of securities pursuant to Directives 2003/71/EC and 2004/109/EC of the European Parliament and of the Council (OJ L 340, 22.12.2007, p. 66).