The independent validation process must include a review of the model conceptual soundness, design and suitability of the development process. The scope of the qualitative validation varies depending on the statistical or deterministic nature of the model. This must include, at a minimum, a review of the following elements:
(i)
The model governance and decision process,
(ii)
The model conceptual soundness, purpose and scope,
(iii)
The methodology including the mathematical construction,
(iv)
The suitability of the output in terms of economic intuition and business sense as defined in the MMS, and
(v)
The suitability of the implementation (when the model is implemented)
In addition, for statistical models:
(vi)
The choice of variables and their respective transformation,
(vii)
The suitability of the data in terms of sources, filters and time period, and
(viii)
The suitability of the sampling techniques, if any.