Timelines for waiver applications for advanced approaches
The nature of applications for advanced approaches under the CRD means that the FSA will have to review the relevant models and associated systems and controls before making a decision.
Article 129 applications
Article 129 requirements apply to applications for IRB, AMA and CCR IMM methodologies from an EEA group. The CRD requires all relevant EEA supervisors to do everything within their power to reach a joint decision within six months of receipt of a complete application. If a joint decision is not reached within six months, then the home supervisor will make its own decision.
Where we are the home or consolidating supervisor, we will aim to reach a joint decision on a complete application within six months.
Where an EEA group containing a firm for whom we are a host supervisor makes an Article 129 application, we will work in coordination with the home supervisor and other relevant supervisors to reach a joint decision. In this situation there is no application direct to the FSA and we cannot set a timeline for these decisions.
IRB and AMA (Credit and operational risk model approval) and CCR IMM/EEPE (counterparty credit risk model approval)
| 1 October 2007 onwards | We aim to give a decision on 70% of applications within 6 months from the date of receipt of a complete application* |
* Our aim, as any expectation, is subject to the complexity of the application and our ability to obtain expeditiously access to relevant firm documentation and/or key individuals to support our analysis.
We expect firms to submit formal waiver applications to us at least 12 months before the planned date of first use of advanced approaches. Our planning and processes are aimed at meeting that timetable.
Where our review work identifies weaknesses in an application we may delay making our decision in order to enable an applicant to remedy that weakness. We may also choose to grant a waiver subject to the applicant meeting certain conditions before it is allowed to use the advanced approach.
An application is not a guarantee of approval. Firms should consider their contingency plans for compliance in the event that their application is refused or conditional on remedying weaknesses.