All trading book positions and non-trading positions at fair value must meet prudent valuation standards. Institutions must keep systems and controls with documented valuation policies (responsibilities, market data sources, unobservable inputs, independent price verification frequency, closing price timing, adjustment and verification procedures) and reporting lines for valuation independent of the front office and ultimately to the management body, revalue trading book positions at fair value at least daily, mark to market or to model under the stated conditions, perform independent price verification, and establish valuation adjustments for unearned credit spreads, close-out costs, operational risks, market price uncertainty, early termination, investing and funding costs, future administrative costs and model risk, with further adjustments for less liquid and concentrated positions, deducting the resulting additional value adjustments from Common Equity Tier 1.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.