Article 1 | Delegated Regulation 2022/439

Article 1 - Assessment of compliance with requirements to use the Internal Ratings Based Approach

Article 1

Assessment of compliance with requirements to use the Internal Ratings Based Approach

1. Competent authorities shall apply this Regulation for the assessment of the compliance of an institution with the requirements to use the Internal Ratings Based Approach (‘IRB Approach’) as follows:

(a)	for the purposes of assessing initial applications for permission to use the IRB Approach as provided for in Article 144 of Regulation (EU) No 575/2013, competent authorities shall apply all provisions of this Regulation;

(b)

for the purposes of assessing applications for permission to extend the IRB Approach in accordance with the approved sequential implementation plan as provided for in Article 148 of Regulation (EU) No 575/2013, competent authorities shall apply Chapters 4, 5, 7 and 8 and any other part of this Regulation that is relevant to that request;

(c)	for the purposes of assessing applications for prior permission to carry out changes as referred to in Article 143(3) of Regulation (EU) No 575/2013, competent authorities shall apply all parts of this Regulation that are relevant to those changes;

(d)	for the purposes of assessing changes to rating systems and internal models approaches to equity exposures which have been notified in accordance with Article 143(4) of Regulation (EU) No 575/2013, competent authorities shall apply all parts of this Regulation that are relevant to those changes;

(e)	for the purposes of conducting ongoing reviews of the use of the IRB Approach pursuant to Article 101 of Directive 2013/36/EU, competent authorities shall apply all parts of this Regulation that are relevant to that review;

(f)	for the purposes of assessing applications for permission to revert to the use of less sophisticated approaches in accordance with Article 149 of Regulation (EU) No 575/2013, competent authorities shall apply Articles 6 to 8 of this Regulation.

2. In addition to the criteria laid down in the provisions of this Regulation referred to in paragraph 1, the competent authorities shall verify any other relevant criteria necessary for the assessment of the compliance with the requirements to use the IRB Approach.

Recitals

CHAPTER 1 - GENERAL PROVISIONS ON THE ASSESSMENT METHODOLOGY (Article 1-5)Article 1 - Assessment of compliance with requirements to use the Internal Ratings Based Approach Article 2 - Methods to be applied by competent authorities Article 3 - Quality of documentation Article 4 - Third party involvement Article 5 - Temporary non-compliance with the requirements of the IRB Approach

CHAPTER 2 - ASSESSMENT METHODOLOGY FOR SEQUENTIAL IMPLEMENTATION PLANS AND PERMANENT PARTIAL USE OF THE STANDARDISED APPROACH (Article 6-8)

CHAPTER 3 - ASSESSMENT METHODOLOGY FOR THE FUNCTION OF VALIDATION OF INTERNAL ESTIMATES AND OF THE INTERNAL GOVERNANCE AND OVERSIGHT OF AN INSTITUTION (Article 9-17)

CHAPTER 4 - ASSESSMENT METHODOLOGY FOR USE TEST AND EXPERIENCE TEST (Article 18-22)

CHAPTER 5 - ASSESSMENT METHODOLOGY FOR ASSIGNMENT OF EXPOSURES TO GRADES OR POOLS (Article 23-25)

CHAPTER 6 - ASSESSMENT METHODOLOGY FOR IDENTIFICATION OF DEFAULTS (Article 26-29)

CHAPTER 7 - ASSESSMENT METHODOLOGY FOR RATING SYSTEMS DESIGN, OPERATIONAL DETAILS AND DOCUMENTATION (Article 30-40)

CHAPTER 8 - ASSESSMENT METHODOLOGY FOR RISK QUANTIFICATION (Article 41-58)

CHAPTER 9 - ASSESSMENT METHODOLOGY FOR ASSIGNMENT OF EXPOSURES TO EXPOSURE CLASSES (Article 59-62)

CHAPTER 10 - ASSESSMENT METHODOLOGY FOR STRESS TEST USED IN ASSESSMENT OF CAPITAL ADEQUACY (Article 63-66)

CHAPTER 11 - ASSESSMENT METHODOLOGY FOR THE CALCULATION OF OWN FUNDS REQUIREMENTS (Article 67-71)

CHAPTER 12 - ASSESSMENT METHODOLOGY FOR DATA MAINTENANCE (Article 72-75)

CHAPTER 13 - ASSESSMENT METHODOLOGY OF INTERNAL MODELS FOR EQUITY EXPOSURES (Article 76-82)

CHAPTER 14 - ASSESSMENT METHODOLOGY FOR MANAGEMENT OF CHANGES TO RATING SYSTEMS (Article 83-84)

CHAPTER 15 - FINAL PROVISION (Article 85)

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Article 1 - Assessment of compliance with requirements to use the Internal Ratings Based Approach

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