The EBA has launched a consultation on its draft Regulatory Technical Standards (RTS) that specify the conditions under which competent authorities assess the significance of positions included in the scope of market risk internal models, as well as the methodology that competent authorities shall apply to assess an institution's compliance with the requirements to use an Internal Model Approach (IMA) for market risk.

The draft RTS provide objective criteria to be applied in the assessment of the significance of those positions included in the scope of the internal model and propose two different methodologies for general and specific risk categories, both of them based on the standardised rules for market risk.

In addition, the draft RTS set out the standards for the assessment by competent authorities of an institution's compliance with IMA requirements when the institution applies to use an internal model to determine market risk capital requirements or introduces any material changes or extensions to the IMA approach already in use.

Responses should be provided by 13 March 2016.