(a) Types of netting that competent authorities may recognise
For the purpose of this Part, "counterparty" means any entity (including natural persons) that has the power to conclude a contractual netting agreement and "contractual cross product netting agreement" means a written bilateral agreement between a credit institution and a counterparty which creates a single legal obligation covering all included bilateral master agreements and transactions belonging to different product categories.
For the purposes of cross product netting, the following are considered different product categories:
(i) repurchase transactions, reverse repurchase transactions, securities and commodities lending and borrowing transactions,
(ii) margin lending transactions, and
(iii) the contracts listed in Annex IV.
The competent authorities may recognise as risk-reducing the following types of contractual netting:
(i) bilateral contracts for novation between a credit institution and its counterparty under wh
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