5
Corporate governance
5.1
Where a firm’s rating systems are used on a unified basis pursuant to CRR Article 20(6), the PRA considers that the governance requirements in CRR Article 189 can be met only if the subsidiary undertakings have delegated to the governing body or designated committee of the UK parent institution, UK parent financial holding company or UK parent mixed financial holding company responsibility for approval of all material aspects of rating and estimation processes.
- 01/01/2022
5.2
The PRA expects an appropriate individual in a Senior Management Function (SMF) role to provide to the PRA on an annual basis written attestation that:
- (i) the firm’s internal approaches for which it has received a permission comply with the CRR requirements and any applicable PRA IRB supervisory statements; and
- (ii) where a model rating system has been found not to be compliant, a credible plan for a return to compliance is in place and being completed.
- 01/01/2022
5.3
Firms should agree with the PRA the appropriate SMF for providing this attestation. The PRA would not expect to agree more than two SMFs to cover all the firm’s IRB models. In agreeing which SMF(s) may provide the annual attestation, the PRA will consider the firm’s arrangements for approving rating and estimation processes under CRR Article 189.
(CRR Article 189, 20(6) and 4(1)(9))
- 01/01/2022