The one-year floor does not apply to certain short-term exposures, comprising fully or nearly-fully collateralised⁴⁴ capital market-driven transactions (i.e. OTC derivatives transactions and margin lending) and repo-style transactions (i.e. repos/reverse repos and securities lending/borrowing) with an original maturity of less then one year, where the documentation contains daily remargining clauses. For all eligible transactions the documentation must require daily revaluation, and must include provisions that must allow for the prompt liquidation or setoff of the collateral in the event of default or failure to re-margin. The maturity of such transactions must be calculated as the greater of one-day, and the effective maturity (M, consistent with the definition above).

⁴⁴ The intention is to include both parties of a transaction meeting these conditions where neither of the parties is systematically under-collateralised.