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Banking (prudential standard) determination No. 7 of 2024
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Key principles
- An ADI that wishes to operate a trading book must, in accordance with Attachment A, submit for APRA’s approval a trading book policy statement that specifies those activities that belong in the trading book.
- An ADI must allocate positions in financial instruments to its trading book if they are held with trading intent or in order to hedge other elements of the trading book. In allocating positions, an ADI must be guided by its trading book policy statement.
- An ADI must maintain a framework for prudent valuation practices for trading book positions.
- An ADI operating in the foreign exchange, commodities, interest rate or equities markets must ensure that appropriately robust risk measurement and management systems are in place.
- An ADI must hold capital against:
- market risks arising from positions allocated to the trading book; and
- all foreign exchange and commodity risks.