(1) This article applies for the purposes of valuing a derivative contract and the liabilities arising from it under section 6E(1) [Section 6E was inserted by S.I. 2014/3329.] (pre-resolution valuation), a provisional valuation by the Bank under section 6E(3) or a valuation under section 48X [Section 48X was inserted by S.I. 2014/3329.] (replacement of Bank's provisional valuation).

(2) Where the parties to the contract have rights to set off or net under a title transfer collateral arrangement, set-off arrangement or netting arrangement (within the meaning given by section 48(1)(b), (c) and (d)), the Bank must ensure that the value of the contract and of the liabilities arising from it are determined -

(a) on a net basis in accordance with the terms of the contract; and

(b) in accordance with -

(i) appropriate methodologies for determining the value of classes of derivative contracts, including transactions that are subject to netting arrangements;

(ii) principles for establishing the time at which the value of a derivative position should be established; and