| (i) | As a minimum, a bank that wishes to adopt the advanced measurement approach for the calculation of the bank's capital requirement in respect of operational risk shall demonstrate to the satisfaction of the Registrar— |
| (A) | that the bank's board of directors and senior management are actively involved in the oversight of the bank's operational risk management framework; |
| (B) | that the bank's operational risk management system is conceptually sound and implemented with integrity; |
| (C) | that the bank has sufficient resources for the use of the approach in the bank's major business lines, and in the bank's control and audit units; |
| (D) | that the bank's internal measurement system is able to reasonably estimate unexpected losses based on the combined use of— |
| (ii) | relevant external loss data; |
| (iv) | the bank's internal control factors and the business environment in which the bank operates; |
| (E) | that the bank's measurement system is capable of supporting the allocation of economic capital for operational risk across business lines in such a manner that incentives are created to improve the risk management capabilities in each relevant business line; |
| (F) | that the bank complies with the qualitative and quantitative standards specified below; |
[Regulation 33(9)(d)(i)(F) substituted by regulation 15 of Notice No. 297, GG 40002, dated 20 May 2016]
| (G) | that the bank has in place a credible, transparent, well-documented and verifiable approach for weighting the fundamental elements as specified in item (D) above in its overall operational risk measurement system, and in all cases the bank's approach for weighting these four fundamental elements shall be internally consistent and avoid double counting of qualitative assessments or risk mitigants already recognised in other elements of these Regulations. |
[Regulation 33(9)(d)(i)(G) inserted by regulation 5(c) of Notice No. R. 261, GG 38616, dated 27 March 2015]
