The IRB Approach may be applied by institutions, including parent undertakings and subsidiaries, provided they implement it for at least one designated exposure class. Upon implementing the IRB Approach for a specific exposure type, institutions are required to extend it across all exposures within the class, unless exceptions are granted by the competent authority to revert to the Standardised Approach.

Competent authorities will set a timeline for complete implementation, considering the institution's scale, activities, and complexity of rating systems. Institutions must adhere to stipulated conditions to prevent selective use of the flexibility intended to avoid reductions in capital requirements.