Article 3
Quality and auditability of documentation
Competent authorities shall verify that the documentation submitted by an institution in support of its application for permission to use an internal model for the calculation of own funds requirements for market risk is of sufficient quality and is sufficiently detailed and accurate to allow for examination by qualified third parties.
Competent authorities shall in particular verify that:
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(a) |
the documentation concerned is approved at the appropriate management level of the institution with sufficient authority delegated by the management body for the purposes of internal models; |
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(b) |
the institution has established policies which ensure high-quality standards for internal documentation, including internal accountability to ensure that the documentation concerned is complete, consistent, accurate, updated, approved in accordance with point (a), and secure; |
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(c) |
the documentation set out in the policies referred to in point (b) provides for the identification of the type of document, the author, the reviewer, the authorising agent, the owner, the dates of development and approval, the version number, and the history of amendments; |
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(d) |
the institution accurately and diligently documents the policies, procedures, and methodologies it applies pursuant to this Regulation; |
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(e) |
the documentation concerned is sufficiently detailed to enable qualified third parties to understand all aspects of the internal risk-measurement model. |