{
  "url": "https://openlegislation.uk/eu-regulation-2013-575/article-317",
  "json_url": "https://openlegislation.uk/eu-regulation-2013-575/article-317.json",
  "legislation": "eur/2013/575",
  "legislation_title": "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)",
  "legislation_url": "https://openlegislation.uk/eu-regulation-2013-575",
  "path": "article/317",
  "kind": "article",
  "number": "317",
  "heading": "Own funds requirement",
  "text": "1 . Under the Standardised Approach, institutions shall divide their activities into the business lines set out in Table 2 of paragraph 4 and in accordance with the principles set out in Article 318.\n2 . Institutions shall calculate the own funds requirement for operational risk as the average over three years of the sum of the annual own funds requirements across all business lines referred to in Table 2 of paragraph 4. The annual own funds requirement of each business line is equal to the product of the corresponding beta factor referred to in that Table and the part of the relevant indicator mapped to the respective business line.\n3 . In any given year, institutions may offset negative own funds requirements resulting from a negative part of the relevant indicator in any business line with positive own funds requirements in other business lines without limit. However, where the aggregate own funds requirement across all business lines within a given year is negative, institutions shall use the value zero as the input to the numerator for that year.\n4 . Institutions shall calculate the average over three years of the sum referred to in paragraph 2 on the basis of the last three twelve-monthly observations at the end of the financial year. When audited figures are not available, institutions may use business estimates.\nWhere an institution can prove to its competent authority that, due to a merger, an acquisition or a disposal of entities or activities, using a three year average to calculate the relevant indicator would lead to a biased estimation for the own funds requirement for operational risk, the competent authority may permit institutions to amend the calculation in a way that would take into account such events ... . In such circumstances, the competent authority may, on its own initiative, also require an institution to amend the calculation.\nWhere an institution has been in operation for less than three years it may use forward-looking business estimates in calculating the relevant indicator, provided that it starts using historical data as soon as it is available.\nTable 2\nBusiness line\nList of activities\nPercentage (beta factor)\nCorporate finance\nUnderwriting of financial instruments or placing of financial instruments on a firm commitment basis\nServices related to underwriting\nInvestment advice\nAdvice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to the mergers and the purchase of undertakings\nInvestment research and financial analysis and other forms of general recommendation relating to transactions in financial instruments\n18 %\nTrading and sales\nDealing on own account\nMoney broking\nReception and transmission of orders in relation to one or more financial instruments\nExecution of orders on behalf of clients\nPlacing of financial instruments without a firm commitment basis\nOperation of Multilateral Trading Facilities\n18 %\nRetail brokerage\n(Activities with natural persons or with SMEs meeting the criteria set out in Article 123 for the retail exposure class)\nReception and transmission of orders in relation to one or more financial instruments\nExecution of orders on behalf of clients\nPlacing of financial instruments without a firm commitment basis\n12 %\nCommercial banking\nAcceptance of deposits and other repayable funds\nLending\nFinancial leasing\nGuarantees and commitments\n15 %\nRetail banking\n(Activities with natural persons or with SMEs meeting the criteria set out in Article 123 for the retail exposure class)\nAcceptance of deposits and other repayable funds\nLending\nFinancial leasing\nGuarantees and commitments\n12 %\nPayment and settlement\nMoney transmission services,\nIssuing and administering means of payment\n18 %\nAgency services\nSafekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management\n15 %\nAsset management\nPortfolio management\nManaging of UCITS\nOther forms of asset management\n12 %",
  "extent": "E+W+S+N.I.",
  "status": null,
  "version": "current",
  "annotations": [
    {
      "type": "F",
      "label": "F1",
      "text": "Words in Art. 317(4) omitted (31.12.2020) by virtue of The Capital Requirements (Amendment) (EU Exit) Regulations 2018 (S.I. 2018/1401), regs. 1(3), 155 (with savings in S.I. 2019/680, reg. 11); 2020 c. 1, Sch. 5 para. 1(1)"
    },
    {
      "type": "X",
      "label": "X1",
      "text": "Substituted by Corrigendum to 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 (OJ L 176, 27.6.2013, p. 1)."
    }
  ],
  "outstanding_effects": [],
  "provenance": {
    "source": "legislation.gov.uk",
    "source_url": "https://www.legislation.gov.uk/eur/2013/575/article/317",
    "retrieved_at": "2026-11-01T14:48:36.198705+00:00"
  },
  "licence": "Open Government Licence v3.0",
  "licence_url": "https://www.nationalarchives.gov.uk/doc/open-government-licence/version/3/",
  "attribution": "Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives."
}