Document ID: chunk:federal_register_of_legislation:F2024L01182:body:0:p5
Version: federal_register_of_legislation:F2024L01182
Segment Type: other
Provision Reference: 
Character Range: 11424–14262

to making any material changes to its approved IRRBB model. An ADI must notify APRA of any non-material changes no later than three months after making the change.
 3.          An ADI that has IRRBB model approval must continue to use its approved IRRBB model to determine its IRRBB capital charge unless APRA revokes the approval.
 4.          An ADI that has IRRBB model approval must determine its IRRBB capital charge in accordance with Attachment A to this Prudential Standard. The ADI may rely on its own internal methods and estimates for those parts of the calculation where a method or estimate is not prescribed in Attachment A to this Prudential Standard.
 5.          APRA may, at any time, vary or revoke an ADI's IRRBB model approval, or impose additional conditions on the approval if it determines that:
         1.           the ADI does not comply with this Prudential Standard; or
         2.           it is appropriate, having regard to the particular circumstances of the ADI.
 6.          For an IRB ADI that does not have IRRBB model approval, the ADI must determine its IRRBB capital charge using a method specified by APRA.
 7.          APRA may require an ADI to reduce its level of IRRBB or increase its IRRBB capital charge.

Partial use of internal model
 1.          An IRRBB model approval may permit partial use, which allows an ADI to use a combination of the approved IRRBB model and an alternative approach approved by APRA for the purposes of calculating its IRRBB capital charge.
 2.          As part of an application for IRRBB model approval, an ADI must provide APRA with appropriate written information on the proposed scope of its approved IRRBB model. An ADI must not change the scope of its approved IRRBB model unless it has obtained APRA's prior approval for the change.
 3.          An ADI with approval for partial use must notify APRA prior to commencing any new business activity that generates IRRBB and which the ADI did not include in the application for IRRBB model approval.
 4.          Approval for partial use will, at a minimum, require that:
         1.           the ADI's IRRBB capital charge captures all material sources of IRRBB; and
         2.           the calculation of the IRRBB capital charge does not recognise diversification benefits for any part of the ADI's operations that the approved IRRBB model excludes.
 5.          APRA may approve partial use on a short-term basis. An ADI that has received such approval must have a written, APRA-approved implementation plan that specifies the extent and timing of the extension of the approved IRRBB model to cover all material business activities.
 6.          APRA will approve permanent partial use only in exceptional circumstances and where an ADI is able to demonstrate to APRA's satisfaction that the business