# Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (Text with EEA relevance), Article 165: Equity exposures subject to the PD/LGD method

Extent: E+W+S+N.I.

1. PDs shall be determined in accordance with the methods for corporate exposures.
The following minimum PDs shall apply:
(a) 0,09 % for exchange traded equity exposures where the investment is part of a long-term customer relationship;
(b) 0,09 % for non-exchange traded equity exposures where the returns on the investment are based on regular and periodic cash flows not derived from capital gains;
(c) 0,40 % for exchange traded equity exposures including other short positions as set out in Article 155(2);
(d) 1,25 % for all other equity exposures including other short positions as set out in Article 155(2).
2. Private equity exposures in sufficiently diversified portfolios may be assigned an LGD of 65 %. All other such exposures shall be assigned an LGD of 90 %.
3. M assigned to all exposures shall be five years.

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Source: https://www.legislation.gov.uk/eur/2013/575/article/165 (the official version)
Page: https://openlegislation.uk/eu-regulation-2013-575/article-165
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.