Where the conditions set out in this Chapter are met, the competent authority shall permit institutions to calculate their risk‑weighted exposure amounts using the IRB Approach. Prior permission to use the IRB Approach, including own estimates of LGD and IRB‑CCF, is required for each exposure class, for each rating system and for each approach to estimating LGDs and CCFs. Institutions must obtain prior permission for material changes to the range of application of, or to, a rating system for which permission has been granted; the range of application comprises all exposures of the relevant type for which that rating system was developed. Institutions shall notify the competent authorities of all changes to rating systems.

EBA shall develop draft regulatory technical standards to specify the conditions for assessing the materiality of using an existing rating system for additional exposures not already covered and for changes to rating systems under the IRB Approach, and shall submit those drafts to the Commission by 10 January 2026. Power is delegated to the Commission to supplement this Regulation by adopting those regulatory technical standards in accordance with Articles 10 to 14 of Regulation (EU) No 1093/2010.