For the purpose of regulatory capital calculations, a "trading desk" is defined as a group of traders or trading accounts (key element #1 below) that implements a well-defined business strategy (key element #2 below), operating within a clear risk management structure (key element #3 below), defined by the bank but with the definition approved by supervisors for capital purposes (key element #4 below).
Key element #1: a "trading desk" for the purposes of the regulatory capital framework is an unambiguously defined group of traders or trading accounts.
- An individual trader or trading account is an indisputable and unambiguous unit of observation in accounting for trading activity.
- The desk must have a Head Trader.
- The head trader must have direct oversight of the group of traders or trading accounts.
- Each trader or each trading account in the desk must have a clearly defined specialty(ies).
- Each trader or each trading account must be assigned to only one trading desk. For the
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