ScopeScope

Scope

1. This Prudential Standard applies to all:
   1. trading book positions; and
   2. banking and trading book positions that give rise to foreign exchange or commodity risks.

For the purposes of this Prudential Standard, no distinction is drawn, in principle, between risks arising from physical positions and from positions in derivative instruments.

1. The treatment of counterparty credit risk capital requirements is excluded from this Prudential Standard and must be determined in accordance with Prudential Standards APS 112 Capital Adequacy: Standardised Approach to Credit Risk (APS 112) or APS 113 Capital Adequacy: Internal Ratings-based Approach to Credit Risk (APS 113), as appropriate.