Delineation of classification of head
offices, holding and SPEs
AEG
New York, 23 -25 April 2012
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SNA 1993 and SNA 2008
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SNA 1993: Holdings to be classified according to the
activity of the subsidiaries; no explicit guidance on
classification of head offices and SPEs
SNA 2008:
– Head offices: according to main activity of the subsidiaries
(S.11 or S.126 (financial auxiliaries))
– Holdings: S.127 (Captive financial inst. and money lenders)
– SPEs owned by residents (recognized as institutional units)
and SPEs owned by non-residents:
• Captive financial institutions: S.127
• Artificial subsidiaries (only the ones owned by non-residents):
according to main activity
• SPEs of (non-resident) government: S.125 or S.127?
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Head offices versus holdings
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Head offices: “overseeing and managing of other
units of the company; undertaking the strategic and
organizational planning and decision taking role of
the company; exercising control and manage day-today operations of their related units”
Holdings: units that hold the assets (owning
controlling levels of equity) of a group of subsidiary
corporations and whose principal activity is owning
the group. … do not provide any other service to the
enterprises in which the equity is held, i.e. they do
not administer or manage other units”
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Head offices versus holdings

Question 1: What level of management control is
required, in particular in cases when the company is
responsible for the main business decisions for the
entire group and exercises managerial control over
the companies of the group?
– Borderline between providing and not providing services?
– Holding issuing bonds on behalf of the enterprise group,
and providing part of the management services?
– Should the income of a holding only relate to the assets of
the subsidiaries?
– Head office holding the assets of its subsidiaries?
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Head offices versus holdings
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Question 2: Institutional independence of holdings:
“head offices and holding companies are
institutional units” (ESA 2010); “holdings that
simply own the assets of subsidiaries” are to be
treated as captive financial institutions (SNA 2008).
Question 3: How to record holdings owning a single
corporation?
Question 4: Are all head offices of financial
subsidiaries to be classified as financial auxiliaries?
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SPEs
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Question 5: More precise definition and
classification for SPEs needed (see e.g. decision
trees developed by Eurostat, Guide on
Globalization)?
Question 6: More guidance needed for the
delineation of S.125, S.126, and S.127?
– FVCs engaged in securitization versus SPEs holding assets
for securitization?
– SPEs owned by non-resident governments?
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