Art. 105

(Art. 110 FinMIA)

1. The value of the collateral should be marked down by means of discounts on the market value in accordance with Annex 4.
2. An additional discount of 8% must be applied in cases where:
   1. the currency of the initial margin paid is different from the currency agreed for the termination payment;
   2. the currency of non-cash variation margins provided is different from the currencies agreed in the derivatives contract, the netting framework agreement or the credit support annex for variation margins.¹
3. Counterparties may ascertain the discounts that apply using their own estimates of market price and exchange rate volatility if they meet the qualitative and quantitative minimum standards in accordance with Annex 5.
4. They shall take measures to:
   1. exclude risk concentrations with respect to certain types of collateral;
   2. rule out the possibility that the collateral accepted was issued by the collateral provider or a company associated with the collateral provider;
   3. avoid key correlation risks with respect to the collateral received.