1.For the purposes of Article 31(1) of Regulation (EU) No 600/2014, post-trade risk reduction services are services that meet all the following conditions:
they are provided by a third-party service provider on the basis of non-discretionary rules that are set in advance;
the post-trade risk reduction exercise is accepted in full and, as a result, the participants in that exercise are not able to choose which trades to execute under the post-trade risk reduction exercise;
they have the purpose of achieving a reduction of risk in each derivatives portfolio submitted to the post-trade risk reduction exercise by the counterparties to the derivative transactions;
they are market-risk neutral, within the tolerances set by the counterparties to the derivative transactions submitted to the post-trade risk reduction exercise;
transactions that result from a post-trade risk reduction exercise do not contribute to price formation.
2.For the purposes of Article 31(1) of Regulation (EU) No 600/2014, post-trade risk reduction services shall include compression services, rebalancing services, and basis risk optimisation services.