These ratios are calculated monthly and reported prior to the end of the following month.

• If the mean ratio is outside of the range of -10% to +10%, or if the variance ratio is in excess of 20%, then the desk experiences a breach.
• If the desk experiences four or more breaches within the prior 12 months then it must be capitalized under the standardised approach.

The desk must remain on the standardised approach until it can pass the monthly P&L attribution requirement and provided it has satisfied its backtesting exceptions requirements over the prior 12 months.