AI Summary of Article 361 Extended maturity ladder approach
The provisions outlined in Article 359 allow institutions engaged in substantial commodities trading to utilise the minimum spread, carry, and outright rates specified in Table 2. This alternative framework is contingent upon the institution demonstrating a significant commitment to commodities business and maintaining a sufficiently diversified commodities portfolio.
Table 2 delineates the applicable rates for various categories: precious metals (excluding gold) at a spread of 1.0%, base metals at 1.2%, agricultural products at 1.5%, and other including energy products at 1.5%. Carry rates and outright rates follow accordingly. Institutions are obligated to inform their competent authorities regarding the application of these rates.
Article 361 Extended maturity ladder approach
Institutions may use the minimum spread, carry and outright rates set out in the following Table 2 instead of those indicated in Article 359 provided that the institutions:
(a) undertake significant commodities business;
(b) have an appropriately diversified commodities portfolio;
(c)[deleted]
Table 2
|
Precious metals (except gold) |
Base metals |
Agricultural products (softs) |
Other, including energy products |
|
|---|---|---|---|---|
|
Spread rate (%) |
1,0 |
1,2 |
1,5 |
1,5 |
|
Carry rate (%) |
0,3 |
0,5 |
0,6 |
0,6 |
|
Outright rate (%) |
8 |
10 |
12 |
15 |
Institutions shall notify the use they make of this Article to their competent authorities.