Policy for identifying exposures subject to partial use

3.1 Firms should have a well-documented policy explaining the basis on which exposures would be selected for permanent exemption from the requirements in Article 147C of the Credit Risk: Internal Ratings Based Approach (CRR) Part. This policy should be provided to the PRA when the firm applies for permission and maintained on an ongoing basis thereafter.

3.2 The PRA expects that where a firm submits a roll-out plan in accordance with Article 148(3) of the Credit Risk: Internal Ratings Based Approach (CRR) Part, this should provide for the continuing application of the policy referred to in paragraph 3.1 on a consistent basis over time.

Roll-out following significant acquisitions

3.3 In the event that a firm with an IRB permission acquires a significant new business, it should discuss with the PRA whether sequential roll-out of the firm's IRB approach to the acquired exposures would be appropriate, and whether any changes to any existing time period and conditions for sequential roll-out are required. Firms should apply for any necessary permissions under Articles 148 and 150 of the Credit Risk: Internal Ratings Based Approach (CRR) Part.

Permanent partial use of the Standardised Approach to a roll- out class

3.4 Points (i), (ii) and (iii) of Article 150(1)(k) of the Credit Risk: Internal Ratings Based Approach (CRR) Part, sets out criteria for the permanent use of the SA to a roll-out class. Under these criteria, firms can apply the SA to a roll-out class (with PRA permission) if any of the following applies: