1.An institution may calculate a single exposure value at netting set level for all the transactions covered by a contractual netting agreement where all the following conditions are met:
(a) the netting agreement belongs to one of the types of contractual netting agreements referred to in Article 295;
(b) the netting agreement has been recognised by competent authorities in accordance with Article 296;
(c) the institution has fulfilled the obligations laid down in Article 297 in respect of the netting agreement.
Where any of the conditions set out in the first subparagraph are not met, the institution shall treat each transaction as if it was its own netting set.
2. Institutions shall calculate the exposure value of a netting set under the standardised approach for counterparty credit risk as follows:
exposure value = α · (RC + PFE)
RC = the replacement cost calculated in accordance with Article 275; and
PFE = the potential future exposure calculated in accordance with Articl