Regulation 2 of these Regulations amends Article 384 of 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, which requires certain financial institutions to calculate a particular type of capital requirements in accordance with a specific formula. Article 384(1) defines the total counterparty credit risk exposure value (“EADi total”) for the purposes of that formula. Regulation 2 amends the definition of EADi total by inserting a discount factor which reduces the amount of capital that small and medium-sized firms are required to hold for their derivative activities under Regulation (EU) No. 575/2013.