An instrument belongs in the trading book only if it meets the specifications of RBC25.2 to 25.13; everything else is banking book (RBC25.1). A trading book instrument must be free of legal impediments to selling or fully hedging it and must be fair valued daily through profit and loss (RBC25.3 to 25.4). Instruments held for short-term resale, profiting from short-term price moves, locking in arbitrage profits or hedging such positions must be designated trading book at inception, as must correlation trading portfolio instruments, instruments that would create a net short credit or equity position in the banking book and securities underwriting commitments expected to be taken up (RBC25.5 to 25.6), subject to the listed exclusions and presumptions (RBC25.7 to 25.10). Movement between books after designation is strictly limited: switching for regulatory arbitrage is prohibited, reassignment is allowed only in extraordinary circumstances such as a publicly announced restructuring that closes desks or a change in accounting standards, and market events, liquidity changes or a change of intent alone are not reasons (RBC25.14). No capital benefit may result from a switch: any reduction is imposed as a disclosed Pillar 1 surcharge that runs off as positions mature (RBC25.15). Every reassignment must be approved by senior management, documented, checked against policy, approved in advance by the supervisor and publicly disclosed, and is irrevocable (RBC25.16).
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.