When carrying out the assessment referred to in Article 3(1) of this Regulation, competent authorities shall assess the compliance of institutions with the requirements of Implementing Regulation (EU) 2016/2070, where institutions have exercised the option of Article 3(2) of that Implementing Regulation in order to submit more limited reporting under that Implementing Regulation. Competent authorities shall do so by confirming the rationale and justification behind any limitations in the reporting that these institutions have provided under that Implementing Regulation.
When carrying out the assessment referred to in Article 3(1), competent authorities shall investigate the reasons for the significant and systematic underestimation and for the high or low diversity in the own funds requirements referred to in that paragraph, as follows:
for assessments relating to credit risk approaches, by applying the standards referred to in Articles 7 and 8;
for assessments relating to market risk approaches, by applying the standards referred to in Articles 9 to 11.
Status: Please note you should read all Brexit changes to the FCA Handbook and BTS alongside the main FCA transitional directions. Where these directions apply the 'standstill', firms have the choice between complying with the pre-IP completion day rules, or the post-IP completion day rules. To see a full list of Handbook modules affected, please see Annex B to the main FCA transitional directions.