Trading book
CA-1.3.1
The trading book means the bank's proprietary positions in financial instruments (including positions in derivative products and off-balance-sheet instruments) which are intentionally held for short-term resale and/or which are taken on by the bank with the intention of benefiting in the short-term from actual and/or expected differences between their buying and selling prices, or from other price or interest rate variations, and positions in financial instruments arising from matched principal brokering and market making, or positions taken in order to
hedge other elements of the trading book.CA-1.3.2
Each bank should agree a written policy statement with the Agency on which activities are normally considered trading and which, therefore, constitute the trading book.
CA-1.3.3
It is expected that the trading activities will be managed and monitored by a separate unit and that such activities should be identifiable because of their intent, as defined in paragraph CA-1.3.1 above.
