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.

Article 6 Quality and auditability of documentation

  1. (1)

    Competent authorities shall verify the quality of the documentation relating to the AMA used by an institution by confirming at least the following:

    1. (a)

      that the documentation is approved at the appropriate management level of the institution;

    2. (b)

      that the institution has policies in place outlining standards to ensure the high quality of internal documentation including specific accountability for ensuring that the documentation maintained is complete, consistent, accurate, updated, approved and secure;

    3. (c)

      that the layout of the documentation set out in the policies referred to in point (b) identifies at least the following items:

      1. (i)

        type of document;

      2. (ii)

        author;

      3. (iii)

        reviewer;

      4. (iv)

        authorising agent and owner;

      5. (v)

        dates of development and approval;

      6. (vi)

        version number;

      7. (vii)

        history of changes to the document.

    4. (d)

      that the institution thoroughly documents its policies, procedures and methodologies.

  2. (2)

    Competent authorities shall verify the auditability of the documentation relating to the AMA used by an institution by confirming at least the following:

    1. (a)

      that the documentation is sufficiently detailed and accurate to allow examination of the AMA by third parties, including:

      1. (i)

        the understanding of the reasoning and procedures underlying its development;

      2. (ii)

        the understanding of the operational risk measurement system in order to determine how the AMA own funds requirements operates, its limitations and key assumptions and being able to replicate the model development.