| (2) | For the measurement of a bank's aggregate risk-weighted exposure as contemplated in section 70(2), 70(2A) or 70(2B) of the Act, the bank— |
| (a) | shall at the discretion of the bank, use one of the alternative methodologies specified below to determine the bank's exposure to credit risk: |
| (i) | The standardised approach, using one of the alternative frameworks prescribed in regulation 23(5) read with the relevant provisions of regulations 23(6) to 23(9); |
| (ii) | Subject to the prior written approval of the Registrar and such conditions as may be specified in writing by the Registrar, the IRB approach, using one of the alternative frameworks prescribed in regulation 23(10) read with the relevant provisions of regulations 23(11) to 23(14); |
| (iii) | Subject to the prior written approval of the Registrar and such conditions as may be specified in writing by the Registrar, a combination of the approaches envisaged in subparagraphs (i) and (ii) above. |
| (b) | shall at the discretion of the bank, use one of the alternative methodologies specified below to determine the bank’s exposure to counterparty credit risk: |
| (i) | the standardised approach specified in regulation 23(18); |
| (ii) | subject to the prior written approval of and such further conditions as may be specified in writing by the Authority the internal model method specified in regulation 23(19); |
| (iii) | subject to the relevant requirements specified in regulation 23(15) and the prior written approval of and such conditions as may be specified in writing by the Authority, a combination of the approaches envisaged in subparagraphs (i) and (ii) above; |
[Regulation 38(2)(b) substituted by section 9(a) of Notice No. 1427, GG44048, dated 31 December 2020 - effective 1 January 2021]
| (c) | shall at the discretion of the bank, use one of the alternative methodologies specified below to determine the bank's exposure to market risk: |
| (i) | The standardised approach prescribed in regulation 28(7); |
| (ii) | Subject to the fulfilment of certain quantitative and qualitative requirements, the prior written approval of the Registrar and such further conditions as may be specified in writing by the Registrar, the internal model approach prescribed in regulation 28(8); or |
| (iii) | Subject to the prior written approval of the Registrar and such further conditions as may be specified in writing by the Registrar, a combination of the approaches envisaged in subparagraphs (i) and (ii) above. |
| (d) | shall at the discretion of the bank, use one of the alternative methodologies specified below to determine the bank's exposure to operational risk: |
| (i) | The basic indicator approach prescribed in regulation 33(7); |
| (ii) | Subject to the prior written approval of the Registrar and such conditions as may be determined by the Registrar, the standardised or alternative standardised approach prescribed in regulation 33(8); |
| (iii) | Subject to the prior written approval of the Registrar and such conditions as may be determined by the Registrar, the advanced measurement approach prescribed in regulation 33(9); |
| (iv) | Subject to the prior written approval of the Registrar and such further conditions as may be specified in writing by the Registrar, a combination of the approaches envisaged in subparagraphs (i) to (iii) above. |
| (i) | the approach adopted by the bank for the measurement of the bank's exposure to credit risk, as envisaged in paragraph (a) above; |
| (ii) | such conditions as may be specified in writing by the Registrar, |
use one of the alternative approaches specified below to determine the bank's exposure in respect of securitisation schemes:
| (A) | the standardised approach prescribed in regulation 23(5) read with the relevant provisions of regulations 23(6)(h) and 23(8)(h) respectively; |
| (B) | the IRB approach prescribed in regulation 23(10) read with the relevant provisions of regulations 23(11) and 23(13) respectively. |
