Arxo Findings Register · Arxo Law

ARXO-2026-0399 · Reported

Basel Framework: RBC25.9 FAQ3

RBC25.9 FAQ3 says an FX option hedging a banking book position is covered by RBC25.9(6), which only lists options on credit or equity risk from the bank's own issued instruments.

Consequence

Position: Bought EUR/USD option, notional 50, hedging FX risk of a banking-book SME loan. Reading a: FAQ3: presumptive trading book unless supervisor approves; RBC25.8(8) overridden. Reading b: RBC25.9(6) does not apply; RBC25.8(8) applies, banking book. Difference: Market risk capital on notional 50 vs none.

Proposed correction

Clarify or correct the cited passage so that the rule and its references give one result for the stated case.

Issued by
Basel Committee on Banking Supervision
Act
Basel Framework RBC25 (in force 2023-01-01, published 2020-03-27)
Place
RBC25.9 FAQ3
Record
Discrepancy
Class
Text of the act
Where it arose
The text of the act
Arxo's conclusion
Confirmed
Official text
Unchanged at last check
Last checked
2026-10-31

Evidence

Contradiction within the text. Quotations are verbatim from the official material; translations are ours and marked.

An option that manages FX risk in the banking book is covered by the presumptive list of trading book instruments included in RBC25.9(6).
Normative text · Basel Framework RBC25 (in force 2023-01-01, published 2020-03-27) · RBC25.9 FAQ3 · Published 2020-03-27 · retrieved 2026-10-31 · SHA-256 b168d28f630407304f9593368dc687fbbe5358dd9dce0d6f2bdc77481b398452 · copy
options including embedded derivatives[fn5] from instruments that the institution issued out of its own banking book and that relate to credit or equity risk.
Normative text · Basel Framework RBC25 (in force 2023-01-01, published 2020-03-27) · RBC25.9 FAQ3 · Published 2020-03-27 · retrieved 2026-10-31 · SHA-256 b168d28f630407304f9593368dc687fbbe5358dd9dce0d6f2bdc77481b398452 · copy

How to check it without Arxo's tools

  1. Open Basel Framework RBC25 (in force 2023-01-01, published 2020-03-27) and find RBC25.9 FAQ3. Compare the text with the quotation above. A copy is kept in this register: b168d28f63040730-RBC25@2023-01-01~2020-03-27.txt (SHA-256 b168d28f630407304f9593368dc687fbbe5358dd9dce0d6f2bdc77481b398452, copy of the official file).
  2. The finding holds if the quoted passages read as shown and the comparison gives the result stated at the top of this page. If it does not, write to us with the record ID.

How this finding was made

AI models read the texts, built the examples and reviewed the findings.

Responsible institutions

Reported to

DateInstitutionChannelReference
2026-10-31Basel Committee on Banking Supervisione-mailhttps://mail.google.com/mail/u/0/#sent/KtbxLthRTjRNkqRtWGvxMWmXhVdckfWkGV

Responses

No response recorded.

History

  1. 2026-10-31Confirmed by Arxo
  2. 2026-10-31Entered in the register
  3. 2026-10-31Reported to Basel Committee on Banking Supervision (e-mail)

Cite this record

Arxo Law, Arxo Findings Register, ARXO-2026-0399, https://arxo.io/findings/ARXO-2026-0399/ (status as of 2026-10-31). Data: ARXO-2026-0399.json.