(21)The K‐factor under RtM captures net position risk (K‐NPR) in accordance with the market risk provisions of Regulation (EU) No 575/2013 or, where permitted by the competent authority for specific types of investment firms which deal on own account through clearing members, based on the total margins required by an investment firm’s clearing member (K‐CMG). Investment firms should have an option to apply K‐NPR and K‐CMG simultaneously on a portfolio basis.