Trading transaction (financial instrument)
As trading business is called in banks to trade with financial instruments .
species
Among the tradable financial instruments include in particular transactions with securities (including registered bonds , repurchase agreements and securities lending , but not the issue of securities), foreign exchange , varieties , tradable assets (transactions in credit trading , promissory notes ), money market transactions (see Money Market ), goods (mainly commodities ) or derivatives .
The term trading business comes from the MaH and was adopted in the minimum requirements for risk management (MaRisk), whereby precious metal deals were generally replaced by goods deals. In the MaRisk, the German banking supervisory authority has set certain requirements for the structure and process organization with regard to trading transactions (Section BTO 2 of MaRisk). These requirements, in particular the part of functional separation between trading one hand and handling , risk controlling and accounting on the other hand (separation of market side and back office ).
Stores are often standardized and are in accordance with standardized procedures handled . Trading transactions are typically easy to trade ( liquid and liquidable ). They are therefore suitable for entering into or relinquishing market price risk positions. They are also subject to counterparty risks and, in some cases, issuer risks .
Demarcation
The term trading business must be differentiated from the term trading portfolio, which comes from accounting , and the term trading book from the German Banking Act . Trading transactions can be concluded for the trading portfolio as well as for the liquidity reserve or the investment portfolio . They can also be assigned to both the trading book and the banking book, which results in different regulations for regulatory capital backing (see solvency ).
