Recital 1

(1)Institutions are only allowed to use internal models for market risk if they comply with the requirements laid down in Regulation (EU) No 575/2013. Institutions should not only comply with those requirements when they apply for permission to use those internal models, but also when they use those models, and when they apply for material extensions or changes to such internal models. It is therefore appropriate to lay down that competent authorities, when they verify whether institutions comply with those requirements, apply the same criteria and the same assessment methodology to each of those phases. However, for reasons of efficiency and to reduce administrative burdens, competent authorities, when assessing compliance by institutions that have already been granted permission to use such alternative internal models, should not be required to reassess such permission. They should rather only assess compliance with those rules that are relevant to the scope of the assessment concerned, and build, in each case, on the conclusions from previous assessments.