7.1

The LFI must assess and document regularly whether the Credit Risk of a financial instrument has increased significantly since its initial recognition. The identification of Significant Increase in Credit Risk (“SICR”) must be done in accordance with accounting standards and the LFI’s internal policy on SICR -and must incorporate the requirements set outin this regulation and the accompanyingstandards.
 

7.2

The presence of SICR must be used by the LFI to determine the classification of facilities and their associated provisioning.
 

7.3

LFIs must implement a process and develop a methodology to determine if an SICR has occurred, for all types of Obligors. The process and criteria for the identification of SICR must be linked to and consistent with the identification of unlikeliness to pay.