THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 [OJ L 176, 27.6.2013, p. 1.], and in particular Articles 180(3), 181(3) and 182(4) thereof,

Whereas:

(1) Once it starts implementing the Internal Ratings Based Approach (IRB Approach), an institution and any parent undertaking and its subsidiaries may request the competent authority's permission to use data covering a period of two rather than five years for probability of default (PD), own-loss given default (own-LGD) and own-conversion factor estimates for certain types of exposures. The conditions according to which the competent authorities may grant data waiver permissions should be set out.

(2) Competent authorities should verify that institutions comply with the requirements laid down in Regulation (EU) No 575/2013 before they grant the data waiver permission. This Regulation however does not impose requirements for competent authorities for any specific regular review of the institutions' compliance with requirements for data waiver permission, therefore institutions ceasing to comply with the requirements of this Regulation have recourse to Article 146 of Regulation (EU) No 575/2013.