1.Institutions shall calculate, in accordance with Article 111(1),111(2), the exposure value of off-balance-sheet items, excluding the derivative contracts listed in Annex II, credit derivatives, securities financing transactions and the positions referred to in Article 429d.
Where a commitment refers to the extension of another commitment,off-balance-sheet item, Article 166(9)111(3) shall apply.
2.By way of derogation from paragraph 1, institutions may reduce the credit exposure equivalent amount of an off-balance-sheet item by the corresponding amount of specific credit risk adjustments. The calculation shall be subject to a floor of zero.
3.By way of derogation from paragraphArticle 1 of this Article,495d, institutions shall apply a conversion factor of 10 % to low-risk off-balance-sheet items referred to in pointthe (d)form of Articleunconditionally 111(1).cancellable commitments.