The MMS and the MMG apply to all licensed banks in the UAE, which are referred to herein as “institutions”. This scope covers Islamic institutions.
2.1.2
All institutions must ensure that their models meet minimum quality standards. Simple models must not be confused with poorly designed models. Poorly designed models can be misleading and interfere with sound decision-making. Consequently, the MMS and the MMG apply to all institutions irrespective of their size or sophistication. Small and/or unsophisticated institutions can employ simple models that are properly designed.
2.1.3
At a minimum, UAE branches or subsidiaries of foreign institutions must apply the MMS and the MMG. Where certain elements of the requirements of the parent company’s regulator are more stringent, then these requirements should be implemented. The degree of conservatism must be assessed for each model individually and the associated calibration. The compliance of the UAE branch or subsidiary with the MMS / MSG may require the operational support of their parent company.
2.1.4
An institution that is a parent company incorporated in the UAE must ensure that all its branches and subsidiaries, that are also institutions, comply with the MMS and the MMG.