1.   When assessing whether rating systems broadly in line with the requirements set out in Article 169 to 191 of Regulation (EU) No 575/2013 have been applied by the institution at least three years prior to the use of the IRB Approach for the purpose of the calculation of the own funds requirements, as referred to in Article 145 of Regulation (EU) No 575/2013, competent authorities shall verify that:

(a)	those rating systems have been used in the institution’s risk management and decision-making processes and credit approval processes referred to in Article 19(1)(b);

(b)	adequate documentation of the effective operation of the rating systems for those three years is available, in particular with regard to the respective monitoring, validation and audit reports.

2.   For the purposes of assessing a request for permission to extend the IRB Approach in accordance with the sequential implementation plan, paragraph 1 shall also apply where the extension concerns exposures that are significantly different to the scope of the existing coverage, such that the existing experience cannot be reasonably assumed to be sufficient to meet the requirements of Article 145(1) and (2) of Regulation (EU) No 575/2013 in respect of the additional exposures, as laid down in Article 145(3) of Regulation (EU) No 575/2013.