Document ID: chunk:federal_register_of_legislation:F2024C01107:body:0:p58
Version: federal_register_of_legislation:F2024C01107
Segment Type: other
Provision Reference: 
Character Range: 157319–160408

the absolute sum of the individual position risk amounts for equity positions calculated for each country using the methods of calculation set out in this Annexure 3.

A3.1.2 Overview of methods
(1) The standard method is the main method for measuring the equity position risk amount. This is supplemented by other methods, the use of which largely depends on the Financial Instruments in which principal positions are taken.
(2) In calculating the equity position risk amount, the following methods must be used.
Table A3.1: Methods
Nature of Positions               Standard Method                                   Margin Method                                                                   Basic Method
Physical (not equity derivative)  Yes                                               No                                                                              No
Non-option equity derivatives     Yes, if converted to equity equivalent positions  Yes, if exchange traded and margined and not calculated under any other method  No
Equity options                    No                                                Yes, if exchange traded and margined and not calculated under any other method  Yes

(3) For the purposes of Parts A3.1 to A3.9, a right over an equity must be treated as an Option position.

A3.1.2A Equity position risk amount
Without limitation, a Market Participant must calculate an equity position risk amount under this Annexure 3 in the following circumstances:
(a)        where the Market Participant has entered into an on-market purchase or sale transaction as principal, the Market Participant will be required to calculate an equity position risk amount unless the trade is done for the purposes of unwinding an existing principal position;
(b)       where the Market Participant has entered into an off-market purchase or sale and acts as principal on one side of the transaction, the Market Participant will be required to calculate an equity position risk amount from the time that the trade is executed until the trade is sold to the client;
(c)        where the Market Participant agrees to buy stock as principal from its client and then seeks to close its principal position by selling the stock to other clients (an off-market client facilitation), the Market Participant will be required to calculate an equity position risk amount on the long Equity position from the time the trade is executed until the position is sold to the other clients (a position risk amount will continue to be required on any part of the position that is not closed out), regardless of whether the client facilitation is fully completed within the day;
(d)       where the Market Participant conducts an off-market underwritten placement of existing shares via a book build, the Market Participant will be required to calculate an equity position risk amount from the time that the deadline for the placement is reached, for any shares that have not been sold to buying clients by that time, where the position risk amount is based on the "final" price for the