Book moves

The trading-desk row is the one that surprises. A move between two desks of the same entity and classification is permitted; the desk's P&L attribution and backtesting see the position arrive or leave, and the move must not be made to improve the outcome of those tests. FRTB trading book / banking book boundary covers the regulatory classification itself.

The analysis notes on books record what the front office expects:

• A deal can change book freely when the move keeps it within the same logical grouping — same legal entity, same branch — so that there is no legal impact, and the system should support that automatically.
• A move to a book with a different owner goes through a close-out and a rebooking, linked.
• A move should be a single transaction pairing a deal that backs out the original trade with the new trade in the destination book.
• Moves can be made in bulk, "with or without historic cash flow moves", and an erroneous move is reversed by an explicit Undo Book Move.

The same notes list book moves first in the priority order of reasons for update — the reasons a trade version records — and the notes on confirmations list them among the internal changes that are "not the customer's business". In those systems an allowed move is therefore an internal amendment of the same trade: the trade keeps its identity, its internal version moves, and its external version does not.

The back-out and the new trade belong to the ledger side of that amendment. They are the postings that close the position in the source book and open it in the destination, written in one transaction so that no report sees the position in neither book or in both.

Three properties, common in older systems, make every move look like an accounting impossibility:

1. The sub-ledger is keyed by book. Accruals, realised P&L and cash are held per book, so moving the trade without moving them leaves the source book holding a balance for a trade it no longer has.
2. Only the current book is kept. The analysis notes call book moves a source of P&L breaks that are hard to explain, because "only the current book ID is reported": a P&L explain has to find the previous day's record to learn where the trade was.
3. Books are mapped to ledger entities. Where books map to different ledger entities or general ledger accounts, a move that changes the mapping changes the balance sheet, and is genuinely a new trade.

The third is the real restriction, and the boundary table states it. The first two are limits of the system, not of the domain: a booking that keeps its history, and a move that carries its own valuation, remove them.

A trade in a virtual book of a sandbox is a draft, a test or a hypothetical, and it holds no position. It leaves its sandbox through the lifecycle — a draft is executed into a real book, and a hypothetical is dealt as a new trade — not through a book move. A live trade never enters a virtual book.

Two mechanisms move risk rather than trades, and neither is a book move:

• Intra-book hedging. A trader moves an amount of risk between two books they manage by booking a deal in the source book and an offsetting deal with the inverse direction in the destination book, both against an internal counterparty. The two deals are booked and tracked together.
• Risk routing. Routing rules split and aggregate client trades to reach the desk that manages the risk, through wash books and back-to-backs. See Wash books and risk routing.

This section is analysis rather than reported practice.

• A book carries the four attributes. Legal entity, branch, regulatory book (trading or banking) and accounting classification are attributes of the book, not of the trade.
• An allowed move amends the booking. When the source and destination books agree on all four, the move is a new version of the trade's booking, with book move as its reason. The trade keeps its id, its internal version moves and its external version does not.
• Any other change of book is refused as a move. The schema can enforce it: a booking change whose books differ on any of the four attributes is rejected, and the change must be made as a close-out and rebooking linked by a book move link, or as internal risk transfer trades.
• The move carries its valuation. The move records the trade's fair value at the moment of the move, and whether historic cash flows move with it, so the ledger can post the close in the source book and the open in the destination without new trades.
• The booking keeps its history. Because the booking is versioned in time, the book a trade sat in on any date is a plain read as of that date. That removes the P&L break the analysis notes describe.
• Undo is a version. Undoing a move is a further version of the booking that restores the source book, with its own reason; the erroneous version stays in the record.
• Bulk moves are one trade group. A bulk move of many trades is one operation over a set of trades. The trades it moved are one trade group, and the run records who moved them, when, why, and whether historic cash flows moved.