| (a) |
A bank that wishes to adopt the advanced measurement approach for the calculation of the bank's capital requirement relating to operational risk in terms of the bank's internal risk measurement system— |
| (i) |
shall obtain the prior written approval of the Registrar; |
| (ii) |
shall at all times adhere to such conditions as may be specified in writing by the Registrar, which conditions may include a period of initial monitoring by the Registrar before the bank is allowed to adopt the said approach for the calculation of its capital requirement in respect of operational risk; |
| (iii) |
as a minimum, shall comply with the qualifying criteria specified in paragraph (d) below; |
| (iv) |
shall calculate its capital requirement relating to operational risk in accordance with the relevant provisions of paragraphs (e) and (f) below. |
| (b) |
An application for the written approval of the Registrar shall be accompanied by a written statement containing adequate details in respect of, amongst other things, the bank's compliance with the quantitative and qualitative requirements specified in paragraph (d) below. |
| (c) |
When a bank wishes to apply an allocation mechanism in order to determine the capital requirements relating to operational risk for the bank's internationally active subsidiaries, the bank shall include in its application to the Registrar sufficient details, including details relating to the empirical process to calculate the capital requirements of the said subsidiaries, in order for the Registrar to determine and assess— |
| (i) |
the significance and the risk profile of the said subsidiaries; and |
| (ii) |
the appropriateness of the allocation methodology with consideration at least being given to matters such as the stage of development of risk-sensitive allocation techniques and the extent to which it reflects the level of operational risk in the legal entities and across the relevant banking group. |
[Regulation 33(9)(c) substituted by regulation 5(b) of Notice No. R. 261 dated 27 March 2015]
Medicines and Related Substances Act, 1965
