What is Own funds, fixed overheads requirement, K-factor requirement?

An investment firm’s own funds are the regulatory capital it counts against its requirements: mostly paid-up equity and retained earnings. Under the European rules for investment firms its requirement is the highest of a permanent minimum, a fixed overheads requirement, one quarter of the preceding year’s fixed overheads, and a K-factor requirement, the sum of charges proportional to measures of its activity (for a dealer on its own account: its daily trading flow, and the risk of its net positions or the margin it posts to clearing).