Article 8 2.

convert each derivative instrument position into an equivalent position in the underlying asset of that derivative using the conversion methodologies set out in Article 10 and paragraphs (4) to (9) and (14) of Annex II;

apply netting and hedging arrangements;

calculate the exposure created through the reinvestment of borrowings where such reinvestment increases the exposure of the AIF as defined in paragraphs (1) and (2) of Annex I;

include other arrangements in the calculation in accordance with paragraphs (3) and (10) to (13) of Annex I.