BIPRU TP 21 Close substitutes for commodities
1Application |
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21.1 |
R |
This section applies to a BIPRU firm that on 31 December 2006 was applying the approach referred to in the first column of the table in BIPRU TP 21.3R with respect to particular grades or brands of the same commodity-class. |
Commodities: close substitutes |
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21.2 |
R |
A notice given under the IPRU provision in the second column of the table in BIPRU TP 21.3R is treated as having been given under BIPRU 7.4.23 R (Notice to the FSA about treatment of different grades or brands of the same commodity) for the purposes of BIPRU 7.4.22 R (Treatment of different grades or brands of the same commodity) with respect to the commodity grades or brands referred to in BIPRU TP 21.1R. |
21.3 |
R |
Table: Commodity treatments under IPRU This table belongs to BIPRU TP 21.2R |
IPRU provisions under which notice given |
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Paragraph 22(2) of appendix 6 of chapter 10 of IPRU(INV) |
Paragraph 23 of appendix 6 of chapter 10 of IPRU(INV) |
Paragraph 22(2) of chapter CM of IPRU(BANK) |
Paragraph 23 of chapter CM of IPRU(BANK) |
Explanation |
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21.3 |
G |
BIPRU 7.4.22 R (1)(b) says that a firm should treat positions in different grades or brands of the same commodity-class as different commodities unless they are close substitutes and have price movements which have exhibited a stable correlation coefficient of at least 0.9 over the last 12 months. BIPRU 7.4.23 R says that a firm should notify the FSA in writing at least 20 business days prior to the date the firm starts relying on this treatment. The purpose of this section is to allow a notice given under the corresponding provisions of chapter 10 of IPRU(INV) or IPRU(BANK) to continue to have effect without the firm having to serve a new notice under BIPRU 7.4.23 R. |