The bank must have documented, senior-management-approved policies that define which instruments go in the trading book, with transfers between books allowed only in very limited circumstances (SRP33.1, SRP33.2). The policies must cover trading and hedging activities, desk trading strategies and holding horizons, daily marking to market or model standards, external validation of valuations, impediments to liquidation, limits, stale-position monitoring, trader autonomy and senior management reporting (SRP33.2). Internal risk transfers from the banking book must be documented, supported by an approved list of procedures sent to the supervisor, reported regularly and managed with a consistent methodology whose material changes need committee approval and prior supervisory approval (SRP33.3 to SRP33.6). Prudent valuation is the foundation of market risk capital, and concentrated, illiquid or model-marked portfolios may require extra capital (SRP33.7). Internal models banks must hold capital covering Pillar 1 plus their stress test results, and positions may be removed from the model where liquidity or price transparency is limited (SRP33.8, SRP33.9). For its ICAAP the bank must assess market risk at position, desk, business line and firm level and supplement value-at-risk with stress tests capturing illiquidity, concentrations, one-way markets, non-linear products, jumps to default and correlation shifts (SRP20.17 to SRP20.23).
This control maps to 1 controls across 1 other frameworks. If you already hold one of them, the evidence you collected for it is the starting point here rather than new work.
Every mapping shown was judged rather than inferred from wording similarity, and the ones that failed review are published too. See the coverage reports and what was rejected.
The graph holds this control, the 1 it maps to, and the evidence behind each claim, over MCP and REST.