Ongoing review of the permission to use internal models

(1) The Bundesanstalt regularly reviews, at least every three years, whether the securities institution satisfies the requirements for permission to use internal models under Article 22 of Regulation (EU) 2019/2033. In doing so the Bundesanstalt has particular regard to changes in the securities institution's business activity and to the application of the internal models to new products, and reviews and assesses whether the securities institution applies appropriate and up-to-date techniques and practices in those models.
(2) Where the Bundesanstalt establishes, or becomes aware, that the internal models have material deficiencies in capturing risks, the Bundesanstalt orders appropriate and suitable measures, to be implemented within a period set by it, to ensure that the deficiencies are remedied without delay and their consequences limited. A suitable measure is in particular the setting of higher own funds requirements or higher multiplication factors.
(3) Where an internal model for market risk permitted by the Bundesanstalt repeatedly exceeds the multiplication factors within the meaning of Article 366 of Regulation (EU) No 575/2013, or such exceedances repeatedly threaten to occur, the internal model is presumed not to be precise. In this case the Bundesanstalt revokes the permission to use the internal model, or orders appropriate measures ensuring that the model is improved without delay within a period set by the Bundesanstalt.
(4) Where a securities institution no longer satisfies the requirements for the use of internal models, the Bundesanstalt requires the securities institution to submit
1. a plan ensuring that the requirements are again satisfied within a specified implementation period; or
2. evidence that the effects of the non-compliance with the requirements are immaterial. Where, in the case of the first sentence, the own funds requirements are insufficient for adequate risk coverage, the Bundesanstalt orders additional own funds requirements.
(5) Where the Bundesanstalt concludes that the securities institution is not implementing the plan submitted under subsection (4), first sentence, no. 1 for the full restoration of compliance with the requirements, or that the implementation period envisaged by the securities institution is unreasonably long, the Bundesanstalt requires an improvement of the plan within a period it sets.
(6) Where the Bundesanstalt concludes that the securities institution will not again satisfy the requirements for the use of internal models within a reasonable period, and the securities institution has also not provided evidence within the meaning of subsection (4), first sentence, no. 2, the Bundesanstalt revokes the permission to use the internal models entirely, or for the areas in which the securities institution does not satisfy the requirements for the use of internal models.
(7) In the review and evaluation under subsection (1), the Bundesanstalt takes into account the analyses and guidelines of the European Banking Authority under Article 37(4) of Directive (EU) 2019/2034.