6.To qualify as an eligible CVA hedge for purposes of the CVA capital calculation, hedge transactions must meet the eligibility requirements stated here:

1. (a)The hedge instrument must be an index CDS, or a single-name CDS, single-name contingent CDS, or equivalent hedging instrument that directly references the counterparty being hedged; and
2. (b)The transaction must be a component of the bank's CVA risk management program, entered into with the intent to mitigate the counterparty credit spread component of CVA risk and managed by the bank in a manner consistent with that intent.

7.Eligible hedges that are included in the CVA calculation as CVA hedges are excluded from a bank's market risk capital calculations. A bank must treat transactions that are not eligible as CVA hedges as they would any other similar instrument for regulatory capital purposes.