# Commission Delegated Regulation (EU) 2018/959 of 14 March 2018 supplementing Regulation (EU) No 575/2013 of the European Parliament and of the Council with regard to regulatory technical standards of the specification of the assessment methodology under which competent authorities permit institutions to use Advanced Measurement Approaches for operational risk (Text with EEA relevance), Article 20: General principles

Extent: E+W+S+N.I.

Competent authorities shall assess an institution's compliance with the standards relating to the use of internal data, external data, scenario analysis and BEICF (‘the four elements’), as referred to in Article 322 of Regulation (EU) No 575/2013, by verifying at least the following:
(a) that the institution has internal documentation specifying in detail how the four elements are gathered, combined and/or weighted, including a description of the modelling process that illustrates the use and combination of the four elements and of the rationale for the modelling choices;
(b) that the institution has a clear understanding of how each of the four elements influence the AMA own funds requirements;
(c) that the combination of the four elements used by the institution is based on a sound statistical methodology, sufficient for estimating high percentiles;
(d) that the institution applies at least the following when collecting, generating and treating the four elements:
(i) the criteria set out in Articles 21 to 24 relating to internal data;
(ii) the criteria set out in Article 25, relating to external data;
(iii) the criteria set out in Article 26, relating to scenario analysis;
(iv) the criteria set out in Article 27, relating to BEICF.

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Source: https://www.legislation.gov.uk/eur/2018/959/article/20 (the official version)
Page: https://openlegislation.uk/eu-regulation-2018-959/article-20
Contains public sector information licensed under the Open Government Licence v3.0. Source: legislation.gov.uk, The National Archives.