(1) The calculation of the size of a position a person holds for the purposes of regulation 16(2) must not include a position which is -

(a) held by or on behalf of a non-financial entity;

(b) objectively measurable as reducing risks directly relating to the commercial activity of that non-financial entity; and

(c) approved by the FCA in accordance with -

(i) the relevant criteria and methods; and

(ii) the relevant procedure.

(2) An application to the FCA for approval under paragraph (1)(c) must -

(a) be made in such manner as the FCA may direct; and

(b) contain or be accompanied by such information as the FCA may reasonably require for the purpose of determining the application.