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Repealed by LN. 2013/198 as from 1.1.2014 - page 13 / 94

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Financial Services (Investment and Fiduciary Services)

FINANCIAL SERVICES (CAPITAL ADEQUACY OF INVESTMENT FIRMS) REGULATIONS 2007 PART III Trading book

Trading book.

7(1) The trading book of an investment firm shall consist of all positions in financial instruments and commodities held either with trading intent or in order to hedge other elements of the trading book and which shall either be free of any restrictive covenants on their tradability or able to be hedged.

  • (2)

    For the purposes of sub-regulation (1)

    • (a)

      positions held with trading intent shall be those held intentionally for short-term resale or with the intention of benefiting from actual or expected short-term price differences between the buying and selling prices or from other price or interest rate variations;

  • (b)

    “positions” shall include proprietary positions, positions arising from client servicing and market making.

    • (3)

      Trading intent shall be evidenced based on the strategies, policies and

procedures set up by the investment firm to manage the position or portfolio in accordance with Part A of Schedule 7.

(4) An investment firm shall establish and maintain systems and controls to manage its trading book in accordance with the provisions of Parts B and D of Schedule 7.

(5) Internal hedges may be included in the trading book of investment firms on condition that they comply with the provisions of Part C of Schedule 7.

PART IV Own funds

Interpretation.

8. For the purposes of this Part, original own funds” means the aggregate of the amounts represented by

(a)

the capital, which for the purposes of this regulation shall be taken to include all amounts, regardless of their actual designation, which, in accordance with an investment firm’s legal structure, are regarded as equity capital subscribed by shareholders or other proprietors in so far as it has been paid up, plus the related share premium accounts, it fully absorbs

© Government of Gibraltar (www.gibraltarlaws.gov.gi)

1989-47

Repealed Subsidiary 2007/002

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