An institution shall apply the following formula to calculate the own funds requirement (K _i ) for the exposures arising from its trade exposures and the trade exposures of its clients (TE _i ) and pre-funded contributions (DF _i ) to the default fund of a QCCP:

$K_i=\mathrm{8\%}\times \min \left[\mathrm{2\%}\times {\mathrm{TE}}_i+1250\%\times {\mathrm{DF}}_i\mathrm{;20\%}\times {\mathrm{TE}}_i\right]$