(3)The synthetic excess spread is defined in Article 2, point (29), of Regulation (EU) 2017/2402 as an amount contractually designated by the originator to absorb losses. Consequently, the synthetic excess spread gives rise to an exposure value that should be taken into account in the measurement of the material net economic interest at origination. Therefore, the synthetic excess spread should be recognised as a possible form of compliance by the originator of a synthetic securitisation with the risk retention requirement where that synthetic excess spread meets the conditions set out in Article 6(1) of Regulation (EU) 2017/2402 and where that synthetic excess spread is subject to a capital requirement in accordance with the applicable prudential regulation.