1.   Institutions shall have in place policies and procedures setting out how they calculate the theoretical changes in accordance with Articles 12 and 14 of this Regulation, which shall contain an explanation of how the theoretical changes in the trading desk portfolio’s value are calculated for modellable and non-modellable risk factors.

2.   When designing the procedures for aligning the data as referred to in Article 14 of this Regulation, institutions shall apply both of the following:

(a)

they shall compare the theoretical changes in the trading desk portfolio’s value without the alignments referred to in Article 14 of this Regulation with the theoretical changes in the trading desk portfolio’s value with the alignments referred to in Article 14 of this Regulation, and they shall document that comparison;

(b)	they shall assess the effect of the alignments on the metrics of the tests used for assessing compliance with the profit and loss attribution requirement referred to in Articles 7 and 8 of this Regulation and document that assessment.

3.   Institutions shall document any adjustments, performed in accordance with Article 14 of this Regulation, to the input data for the risk factors within the calculation of the theoretical changes in the trading desk portfolio, as well as the rationale for such adjustments.