1.   Institutions that use one or more parametric functions to represent a curve, a surface or a cube and incorporate the function parameters as risk factors in their internal risk-measurement models shall assess the modellability of those function parameters by applying for each parametric function the following steps in the following order:

(a)	those institutions identify the set of points of the curve, the surface or the cube that were used to calibrate the parametric function;

(b)	those institutions apply the bucketing approach set out in Article 5(2) as if the risk factors in their risk-measurement model were the points identified pursuant to point (a);

(c)

those institutions assess, in accordance with Article 4, paragraphs 2 and 3, the modellability of the buckets resulting from the application of the bucketing approach set out in Article 5(2), as if the risk factors in their risk-measurement model were the points identified in accordance with point (a).

2.   The modellability of a parameter of the parametric function as referred to in paragraph 1 shall be assessed by identifying the set of points of the curve, the surface or the cube that were used to calibrate that function parameter. Where the identified points belong only to buckets assessed as modellable pursuant to paragraph 1, point (c), the function parameter shall be assessed as modellable.