Regulatory Alerts2025-07-03
Added · Updated
Commission Delegated Regulation (EU) 2025/1311 on assessing materiality of changes to alternative internal models and modellable risk factors
The European Commission establishes regulatory technical standards requiring institutions to classify extensions and changes to alternative internal models and modellable risk factors as either material or non-material. Material changes require prior competent authority permission based on specific qualitative criteria and quantitative thresholds, such as a 1% change in risk numbers triggering capital requirement impacts of 10% to 20%. Non-material changes require notification at least four weeks before implementation, with specific sub-categories for additional or basic information based on lower quantitative impact ranges. Institutions must calculate risk metrics over a 15-business-day observation period to determine if these thresholds are breached.