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Version date: 27 March 2020 - onwards
Version 2 of 2

RBC25 Boundary between the banking book and the trading book (paras. 25.1-25.34) (effective as of 1 January 2023)

This chapter sets out guidance on instruments to be included in the trading book.

Version effective as of 01 Jan 2023

Updated to take account of the January 2019 market risk publication and the revised implementation date announced on 27 March 2020.

Scope of the trading book

25.1 A trading book consists of all instruments that meet the specifications for trading book instruments set out in RBC25.2 through RBC25.13. All other instruments must be included in the banking book.

25.2 Instruments comprise financial instruments, foreign exchange (FX), and commodities. A financial instrument is any contract that gives rise to both a financial asset of one entity and a financial liability or equity instrument of another entity. Financial instruments include both primary financial instruments (or cash instruments) and derivative financial instruments. A financial asset is any asset that is cash, the right to receive cash or another financial asset or a commodity, or an equity instrument. A financial liability is the contractual obligation to deliver cash or another financial asset or a commodity. Commodities also include non-tangible (ie non-physical) goods such as electric power.

FAQ

FAQ1

Does the credit spread risk (CSR) capital requirement under the market risk framework apply to money market instruments (eg bank bills with a tenor of less than one year and interbank placements) ?