CENTRAL BANK OF CYPRUS
ESA 95/4 – Annex 4
EUROSYSTEM
Guidance Notes on the Classification of Institutional Units
into Institutional Sectors and Sub-sectors
S.1
DOMESTIC SECTORS
This sector comprises all residents of Cyprus, as defined in Annex 1.
S.11
Non-Financial Corporations
This sector consists of independent legal entities which are market
producers and whose principal activity is the production of goods and
non-financial services. The institutional units included in this sector can
take the following legal forms:
a) private and public corporations, co-operative corporations and
partnerships;
b) non-profit institutions or associations serving non-financial
corporations;
c) holding corporations controlling a group of corporations whose
predominant activity is the production of goods and non-financial
services; and
d) public producers which by virtue of special legislation are recognised
as independent legal entities and which are market producers
The units currently identified and included in the Electronic Register of
Institutional Units are:
a) corporations registered with the Registrar of Companies and Official
Receiver, which are classified as non-financial corporations.
b) corporations or partnerships registered with the Commissioner of Cooperative Societies’ Supervision and Development Authority, which are
classified as non-financial corporations; and
c) semi-government organisations and other organisations controlled by
the Government which are market producers and do not fall under the
sub-sector Central Government.
Any units not covered by the Electronic Register should be identified and
classified accordingly by the MFIs.
The sector non-financial corporations is further divided into three subsectors. However, this breakdown is not currently requested.
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S.11001
Public Non-Financial Corporations
S.11002
National Private Non-Financial Corporations
S.11003
Foreign Controlled Non-Financial Corporations
S.12
Financial Corporations
This sector consists of all corporations which are principally engaged in
financial intermediation and/or in auxiliary financial activities.
Financial intermediation is the activity in the context of which an
institutional unit acquires financial assets and, at the same time incurs
liabilities on its own account by engaging in financial transactions on the
market.
Through the financial intermediation process, funds are
channeled between third parties with a surplus on one side and those with
a lack of funds on the other. A financial intermediary does not simply act
as an agent, but places itself at risk by acquiring financial assets and
incurring liabilities on its own account.
Auxiliary financial activities are activities that facilitate financial
intermediation. Financial auxiliaries do not set themselves at risk by
acquiring financial assets or incurring liabilities·
The Institutional units included in this sector can take the following legal
forms:
a) private and public corporations, co-operatives and partnerships which
are recognised as independent legal entities;
b) non-profit institutions or associations recognised as independent legal
entities which are principally engaged in financial intermediation and/or
auxiliary financial activities or which are serving financial corporations;
c) holding corporations, if the group of subsidiaries within the economic
territory as a whole is principally engaged in financial intermediation
and/or in auxiliary financial services;
d) unincorporated mutual funds owned by a group of participants, and
whose management is undertaken by other financial corporations.
These funds are institutional units by convention, separate from the
managing financial corporation;and
e) public producers, which by virtue of special legislation are recognised
as independent legal entities, which are principally engaged in financial
intermediation and/or in auxiliary financial activities;
Each sub-sector of the financial corporations sector can be further
subdivided into Public Corporations, National Private Corporations and
Foreign Controlled Corporations. The criteria for this classification are the
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same as those mentioned for sub-sectors S.11001, S.11002 and S.11003,
above. However, this classification is currently not requested.
S.121
Central Bank of Cyprus
The Central Bank of Cyprus (CBC) should be classified in this sub-sector.
S.122
Other Monetary Financial Institutions (MFIs)
This sub-sector consists of all resident credit institutions and all other
resident financial institutions the principal activity of which is:
a) to receive deposits and/or close substitutes for deposits from
institutional units other than Monetary Financial Institutions (MFIs), and
b) to grant credits and/or to make investments in securities for their own
account (at least in economic terms).
S.122.1
Credit Institutions
Credit Institutions as defined in Article 4(1) of Directive 2006/48/EC are
undertakings whose business is to receive deposits or other repayable
funds from the public and to grant credits for their own acount, as well as
electronic money institutions within the meaning of Directive 2006/46/EC.
For residents of Cyprus, category S.122.1 includes:
a) credit institutions licenced by the CBC to carry on banking business
under the provisions of the Banking Laws of 1997 to 2009
b) electronic money institutions licensed by the CBC under the provisions
of the Electronic Money Institutions Law of (86(I)) of 2004;
c) co-operative credit institutions licensed under the provisions of the Cooperative Societies Laws of 1985 to 2009; and
d) branches established in Cyprus by banks or electronic money
institutions licensed in a EU Member State other than Cyprus under the
freedom of establishment and without the need for a license to be
granted by the CBC.
A list of all institutional units identified and classified in the sub-sector
S.122.1 is found in Annex 3 and included in the Electronic Register. The
list may also be found at the ECB website (see para 3.1.0 of the basic
Guidelines).
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S.122.2
Money Market Funds (MMFs)
This category includes Money Market Funds established in Cyprus.
MMFs are defined as those collective investment institutions
a) the shares/units of which are, in terms of liquidity, close substitutes for
deposits, and
b) which primarily invest in money market instruments and/or in MMF
shares/units and/or in other transferable debt instruments with a
residual maturity of upto and including one year, and/or in bank
deposits, and/or which pursue a rate of return that approaches the
interest rates of money market instruments.
So far, no resident MMFs have been identified.
S.123
Other Financial Intermediaries, except Insurance Corporations and
Pension Funds
This sub-sector consists of all financial corporations which are principally
engaged in financial intermediation by incurring liabilities in forms other
than deposits and/or close substitutes for deposits, from institutional units
other than MFIs, or insurance technical reserves.
The borderline with MFIs (S.122) is determined by the non-existence of
liabilities in the form of deposits or close substitutes of deposits vis-à-vis
non MFIs, while the borderline with “Insurance corporations and pension
funds” (S.125) is determined by the non-existence of liabilities in the form
of insurance technical reserves.
S.123.1
Investment Funds
This category consists of all types of investment funds, except from Money
Market Funds (MMFs), as defined in paragraph S.122.2, which are
classified in sub-sector “Other Monetary Financial Institutions” S.122.
Investment funds consist of all collective investment undertakings investing
in financial and non-financial assets to the extent that their sole objective is
the investment of capital raised from the public. They include those
undertakings whose units/shares are, at the request of the holder,
repurchased or redeemed directly or indirectly out of the undertaking’s
assets and those undertakings which have a fixed number of issued
shares and whose shareholders have to buy or sell existing shares when
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entering or leaving the fund. Investment funds may be constituted
pursuant to Community or national law under contract law (as a common
fund managed by management companies), trust law (as a unit trust),
company law (as an investment company) or any other similar mechanism.
A list of the institutional units which have been identified and classified in
category S.123.1 can be found in Annex 3 and is also included in the
Electronic Register.
S.123.2.1
Financial Vehicle Corporations
This category includes the undertakings whose principal activity meets
both of the following criteria:
a) they intend to carry out, or carry out, one or more securitisation
transactions and are insulated from the risk of bankruptcy or any other
default of the originator:
b) they issue, or intend to issue, securities, securitsation fund units, other
debt instruments and/or financial derivatives and/or legally or economically
owns, or may own, assets underlying the issue of securities, securitisation
fund units, other debt instruments and/or financial derivatives that are
offered for sale to the public or sold on the basis of private placements.
Securitisation means a transaction or scheme whereby an asset (or pool of
assets) is transferred to the financial vehicle corporation, which is separate
from the originator and serves the purpose of the securitisation; and/or the
credit risk of an asset (or pool of assets), or part thereof, is transferred to
the investors in the securities, securitsation fund units, other debt
instruments and/or financial derivatives issued by the financial vehicle
corporation.
Financial vehicle corporations shall be constituted according to EU Law or
national regulatory provisions, either: (i) under the law of contract (as
common funds managed by management companies), or (ii) under trust
law, or (iii) under a statute (as a public limited company) or (iv) according
to any other arrangement with similar effects.
So far, no resident financial vehicle corporations have been identified.
S.123.2.2
Security and Derivative Dealers
This category consists of all investment firms which provide investment
services for third parties by investing in securities on own account as their
main business. Investment services are defined as follows: trading of new
or outstanding financial instruments through the acquisition and sale of
those financial instruments for the account and/or risk of the “security and
derivative dealer” for the exclusive purpose of benefiting from the margin
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between the acquisition and selling price; this also includes market making
activities. The security and derivative dealers on own account shall be
constituted according to EU or national regulatory provisions.
A list of the institutional units which have been identified and classified in
category S.123.2.1 can be found in Annex 3 and is also included in the
Electronic Register.
S.123.2.3
Central Counterparties
This category consists of all financial institutions that act as intermediaries
between security market participants. Central counterparties interpose
themselves between the counterparties of the contracts traded in one or
more financial markets, becoming the buyer to every seller and the seller
to every buyer.
Currently, no resident Central Counterparties exist.
S.123.2.4
Others
This category includes all remaining financial intermediaires not included
elsewhere. Such intermediaries may be:
a) financial corporations engaged in lending i.e. entities specialised in
lending. Lending activity comprises financial leasing, hire purchase,
factoring, mortgage lending, mutual guarantee, consumer lending and
any other type of lending as defined according to EU and/or national
regulatory provisions. Financial corporations engaged in lending may
be constituted under the legal form of a joint-stock company or limited
liability company subject to a specialised legal EU and/or national
framework.
Alternatively, the criteria applied to identify such
corporations shall be derived from the instruments of incorporations,
established statues or by-laws, contracts, statutory financial reports or
any other statement with similar effect.
b) financial holding corporations which are principally engaged in
controlling financial corporations or groups of subsidiary financial
corporations and that are not conducting business of such financial
corporations themselves. Control over a corporation is secured by
owning more than half of the voting shares, or by controlling more than
half of the shareholders’ voting power, or by otherwise being able to
determine the general corporate policy, or by controlling entities which
control financial corporations or groups of subsidiary financial
corporations. The criteria in order to identify such corporations shall be
derived from the instruments of incorporations, established statutes or
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by-laws, contracts, statutory financial reports or any other statement
with similar effect of the Financial Holding Corporation according to EU
or national regulatory provisions.
c) specialised financial corporations e.g. venture and development capital
companies and export/import financing companies; and
d) financial intermediary corporations which accept deposits and/or close
substitutes for deposits only from MFIs;
The list of institutional units which have so far been identified and
classified in category S.123.2.4 is included in Annex 3 and is also
included in the Electronic Register.
S.124
Financial Auxiliaries
This sub-sector consists of all financial corporations which are principally
engaged in auxiliary financial activities i.e. activities closely related to
financial intermediation but which are not financial intermediation
themselves.
The following financial corporations should be classified in this sub-sector:
a) insurance brokers, insurance and pension consultants;
b) loan brokers, securities and derivatives brokers, and investment
advisers e.g. Cypriot investment firms providing investment services,
investment firms incorporated in a European Union Member State
which are granted authorisation by the respective supervisory authority
and provide services in Cyprus through a branch ;
c) flotation corporations which manage the issue of securities;
d) corporations whose principal function is to guarantee, by endorsement,
bills and similar instruments;
e) corporations which manage, without issuing, derivative and hedging
instruments, such as currency or interest rate swaps, options and
futures;
f) supervisory authorities of financial intermediaries and financial markets
when they are separate institutional units e.g. the Cyprus Securities
and Exchange Commission;
g) managers of pension funds, mutual funds etc;
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h) corporations providing stock exchange and insurance exchange
services e.g. the Cyprus Stock Exchange;
i) corporations providing infrastructure for financial markets; and
j) non-profit institutions recognised as independent legal entities serving
financial corporations, but not engaged in financial intermediation or
auxiliary financial activities.
A list of institutional units which have so far been identified and classified
in sector S.124 is included in Annex 3 as well as in the Electronic Register.
S.125
Insurance Corporations and Pension Funds
This sub-sector consists of all financial corporations whose principal
activity is financial intermediation as the consequence of the pooling of
risks. The insurance contracts might relate to individuals and/or groups,
irrespective of whether or not participation results from a general obligation
imposed by the government.
Furthermore, social insurance contracts
sometimes form a considerable part of the contracts administered.
S.125.1
Insurance Corporations
This category includes insurance, captive insurance and reinsurance
undertakings (irrespective of the types of risks they insure), established
and authorised in Cyprus, including insurance or reinsurance undertakings
established and authorized in an EU Member State, which operate in
Cyprus under the freedom of establishment.
It also includes the
Agricultural Insurance Organisation.
Annex 3 and the Electronic Register include a list of institutional units
which have so far been identified and classified in sub-sector S.125.1.
S.125.2
Pension Funds
This category includes pension funds, provident funds and medical
funds, which have autonomy of decision and keep a complete set of
accounts and, therefore, are institutional units. Non-autonomous pension
funds are not institutional units and they remain part of the institutional unit
that sets them up.
Pension funds may be described as institutions which insure group risks
relating to social risks (e.g. sickness, old age, accidents at work,
dependents, incapacitation, maternity, family) and needs of the insured
persons. Typical groups of participants in such policies include employees
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of an enterprise or a group of enterprises, employees of a sector or an
industry, and persons having the same profession. The benefits provided
in the insurance contract might encompass benefits which are paid after
death of the insured to his/her family (mainly death in service), benefits
which are paid after the retirement and benefits which are paid after the
insured became disabled. It should be noted that Social Security Funds
are classified in the “General Government Sector (S.13)”.
S.13
General Government
This sector consists of all institutional units which are other non-market
producers i.e. their output is provided free of charge or at prices which are
not economically significant, whose output is intended for individual and
collective consumption and are mainly financed by compulsory payments
made by units belonging to other sectors, and/or institutional units
principally engaged in the redistribution of national income and wealth.
S.1311
Central Government
This sub-sector consists of all administrative services of the Republic of
Cyprus and the remaining central agencies/bodies/organisations whose
competence extends over the whole economic territory, except for the
administration of Social Security Funds. Non-profit institutions which are
controlled and mainly financed by the central government and whose
competence extends over the whole economic territory are also included.
This sub-sector is further divided into the following categories:
S.1311.1
Ministries and Other Administrative Services
This category consists of all the Ministries of the Central Government, the
Offices and Committees falling under the Presidency (e.g. the Office of the
Government Spokesman, the Council of Ministers), the House of
Representatives and the Independent Services (e.g. the Law Office of the
Republic, the Supreme Court of Cyprus and other Courts, the Audit Office,
the Office of the Commissioner for Administration (Ombudsman), the
Public Service Commission and the Educational Service Commission.
A list of institutional units which have so far been identified and classified
in category S.1311.1 is included in Annex 3 and in the Electronic Register.
S.1311.2
Semi-Government Organisations
This category includes only the following semi-government organisations,
which were found to be other non-market producers :
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a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
m)
n)
o)
p)
all School Committees
the Cyprus Sports Organisation
the Cyprus Tourism Organisation
the Cyprus Theatrical Organisation
the University of Cyprus
the Office of the Commisssioner of Electronic Communications and
Postal Regulation
Cyprus Energy Regulatory Authority
Research Promotion Foundation
Technological Centre
Pancyprian Refugee Union
Health Insurance Organisation
Cyprus Institute of Energy
Cyprus Symphony Orchestra Foundation
Cyprus Coultural Foundation
Cyprus University of Technology
Open University of Cyprus
A list of the School Committees and the organisations mentioned above is
found in Annex 3 and in the Electronic Register.
S.1312
State Government
Under the Constitution of the Republic of Cyprus, this sub-sector does not
apply.
S.1313
In principle, the sub-sector S.1312 consists of state governments which
are separate institutional units exercising some of the functions of the
government at a level below that of the central government and above that
of the government institutional units existing at a local level, except for the
administration of social security funds.
Local Government
This sub-sector includes those types of public administration whose
competence extends to only a local part of the economic territory. The
local offices of social security funds are excluded. Non-profit institutions
which are controlled and mainly financed by local governments and whose
competence is restricted to the economic territories of the local
government are also included. This sub-sector comprises the following
categories:
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S.1313.1
Local authorities (Municipalities)
S.1313.2
Community Councils
A list of institutional units that have so far been identified and classified in
categories S.1313.1 and S.1313.2 is included in Annex 3 as well as the
Electronic Register.
S.1314
Social Security Funds
This sub-sector includes all the central, state and local institutional units
whose principal activity is to provide social benefits and which fulfill each of
the following criteria:
a) by law or by regulation certain groups of the population are obliged to
participate in the scheme or to pay contributions
b) the general government sector is responsible for the management of
these units and for the settlement or approval of the contributions and
benefits, independently from its role as supervisory body or employer.
Usually there is no direct link between the amount of the contribution paid
by an individual and the risk to which this individual is exposed.
The following units are classified under this sub-sector:
a) General Benefit Account
b) Supplementary Benefit Account
c) Unemployment Benefit Account
d) Redundancy Fund
e) Central Holiday Fund
f) Medical Treatment and Welfare Scheme for hourly paid employees
g) Insolvency Fund.
The abovementioned institutional units are also included in Annex 3 as
well as in the Electronic Register.
S.14
Households
This sector comprises individuals or groups of individuals in their capacity
as consumers and possibly also as entrepreneurs producing market
goods and non-financial and financial services. It also includes individuals
or groups of individuals as producers of goods and non-financial services
for exclusively own final use.
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Households, in their capacity as consumers, may be defined as small
groups of persons who (a) share the same living accommodation, (b)
pool some or all of their income and wealth and (c) consume certain types
of goods and services collectively, mainly housing and food.
The abovementioned units’ principal source of income is derived from
employee compensation, property income, transfers from other sectors
and receipts from the disposal of market products.
The “Households” S.14 sector includes:
a) individuals or groups of individuals whose principal activity is
consumption or production of goods and non-financial services for
exclusively own final use;
b) sole proprietorships and partnerships without independent legal status
owned by households which are market producers. Such enterprises
may be registered as “Business Names” with the Registrar of
Companies and Official Receiver, a list of which is included in the
Electronic Register;
c) non-profit institutions serving households, which either do not have
independent legal status or have an independent legal status but are of
minor significance;and
d) Persons living permanently in institutions who have little or no
autonomy of action or decision in economic matters e.g. members of
religious orders living in monasteries, long-term patients in hospitals,
prisoners serving long sentences, old persons living permanently in
retirement homes. Such people are treated as comprising, together, a
single institutional unit i.e. a single household.
S.14.1
Employers (including own-account workers)
This sub-sector consists of the group of households who are owners of
unincorporated enterprises, including own account workers, with or without
paid employees. The largest source of income for the household as a
whole, even if it does not always exceed the half of total household
income, emanates from their activity as producers of market goods and
services. For the purposes of these Guidelines, households who are
employers of housemaids only, should be excluded from this sub-sector
and included in sub-sector “Private Individuals (S.14.2)”.
In cases where law offices or other similar partnerships classified as
S.14.1 change their names and are registered as limited liability
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companies, they should be reclassified as S.11 as from the date of their
registration as limited liability companies.
S.14.2
Private individuals
This sub-sector consists of all units classified in the “Households (S.14)”
sector, except those classified as “Employers (S.14.1)”, but includes those
households who are employers of housemaids only. It mainly consists of
households whose largest source of income is either their compensation
as employees, or property income, or income from their retirement and
other pensions, including pensions from previous employers or other
current transfers, or persons living permanently in institutions, for who the
criterion of the largest source of income does not apply.
S.15
Non-Profit Institutions Serving Households (NPISHs)
This sector consists of non-profit institutions which are separate legal
entities providing non-market goods and services to households. Their
principal source of income, apart from those derived from occasional
sales, emanate from voluntary contributions in cash or in kind, from
households in their capacity as consumers, from payments made by
General Governments and from property income. When NPISHs:
a) are mainly funded and controlled by the General Government, then
they are classified under the “General Government” sector S.13;
b) are either not independent legal entities or they are independent legal
entities but are not very significant, then they are included in the sector
“Households” S.14. Paragraph S.14(c) is relevant.
The NPISHs sector includes the following types of NPISHs that provide
non-market goods and services to households:
a) trade unions e.g. the Cyprus Union of Bank Employees (ETYK), the
Cyprus Workers Confederation (SEK), the Pancyprian Federation of
Labour (PEO), professional and scientific associations, consumers’
associations, political parties, churches, convents, metropolis and
religious societies, including those financed but not controlled by
governments;
b) social, cultural, recreational and sports clubs, societies, associations,
groups, organisations and unions; and
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c) charities, relief and aid organisations financed by voluntary transfers in
cash or in kind from other institutional units, including those serving
non- resident units.
S.2
OTHER MONETARY UNION MEMBER STATES SECTORS
This section provides description on the sector breakdown of the units that
are residents of the Member States that have adopted the euro, other than
Cyprus (Other Monetary Union Member States).
All residents in Other Monetary Union Member States should be further
classified by country based on the guidelines described in paragraphs
3.2.1, 3.2.3, 3.2.4 of these Guidelines.
S.211
Non-Financial Corporations
This sector consists of independent legal entities which are market
producers and whose principal activity is the production of goods and
non-financial services. The institutional units included in this sector can
take the following legal forms:
a) private and public corporations, co-operatives and partnerships;
b) non-profit institutions or associations serving non-financial
corporations;
c) holding corporations controlling a group of corporations whose
predominant activity is the production of goods and non-financial
services; and
d) public producers which by virtue of special legislation are recognised
as independent legal entities and which are market producers.
S.212
Financial Corporations
This sector consists of all corporations which are principally engaged in
financial intermediation and/or in auxiliary financial activities.
Financial intermediation is the activity in the context of which an
institutional unit acquires financial assets and, at the same time incurs
liabilities on its own account by engaging in financial transactions on the
market.
Through the financial intermediation process, funds are
channeled between third parties with a surplus on one side and those with
a lack of funds on the other. A financial intermediary does not simply act
as an agent, but places itself at risk by acquiring financial assets and
incurring liabilities on its own account.
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Auxiliary financial activities are activities that facilitate financial
intermediation. Financial auxiliaries do not set themselves at risk by
acquiring financial assets or incurring liabilities.
The Institutional units included in this sector can take the following legal
forms:
a) private and public corporations, co-operative corporations and
partnerships which are recognised as independent legal entities;
b) non-profit institutions or associations recognised as independent legal
entities which are principally engaged in financial intermediation and/or
auxiliary financial activities or which are serving financial corporations;
c) holding corporations, if the group of subsidiaries within the economic
territory as a whole is principally engaged in financial intermediation
and/or in auxiliary financial services;
d) unincorporated mutual funds owned by a group of participants, and
whose management is undertaken by other financial corporations.
These funds are institutional units by convention, separate from the
managing financial corporation; and
e) public producers, which by virtue of special legislation are recognised
as independent legal entities, which are principally engaged in financial
intermediation and/or in auxiliary financial activities;
S.2121
Central Banks
This sub-sector consists of all financial corporations whose principal
function is to issue currency, to maintain the internal and external value of
the currency and to manage and administer all or part of the international
reserves of a country.
S.2121.1
European Central Bank
This sector includes the European Central Bank which, by convention,
should be classified as an MFI in Germany (ISO Country code: 4F).
S.2121.2
National Central Banks
This sector includes the National Central Bank or central monetary
agencies of public origin (e.g. agencies managing foreign exchange or
issuing currency), which keep a complete set of accounts and enjoy
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autonomy of decision in relation to central government. This sub-sector
does not include bodies, other than the central bank, which regulate or
supervise financial corporations or financial markets. These are classified
in sub-sector “Financial Auxiliaries”.
S.2122
Other Monetary Financial Institutions
This sub-sector consists of all credit institutions and all other financial
institutions the principal activity of which is:
a) to receive deposits and/or close substitutes for deposits from
institutional units other than Monetary Financial Institutions (MFIs), and
b) to grant credits and/or to make investments in securities for their own
account (at least in economic terms).
S.2122.1
Credit Institutions
Credit Institutions as defined in Article 4(1) of Directive 2006/48/EC are
undertakings whose business is to receive deposits or other repayable
funds from the public and to grant credits for their own acount, as well as
electronic money institutions within the meaning of Directive 2006/46/EC.
S.2122.2
Money Market Funds (MMFs)
MMFs are defined as those collective investment institutions
c) the units of which are, in terms of liquidity, close substitutes for
deposits, and
d) which primarily invest in money market instruments and/or in MMF
shares/units and/or in other transferable debt instruments with a
residual maturity of upto and including one year, and/or in bank
deposits, and/or pursuing a rate of return that approaches the interest
rates of money market instruments.
The country lists of all institutional units identified and classified in the subsectors S.2122.1 and S.2122.2 of Other Monetary Union Member States
can be found at the ECB website (www.ecb.int).
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S.2123
Other Financial Intermediaries, except Insurance Corporations and
Pension Funds
This sub-sector consists of all financial corporations which are principally
engaged in financial intermediation by incurring liabilities in forms other
than deposits and/or close substitutes for deposits, from institutional units
other than MFIs/banks or insurance technical reserves.
The borderline with MFIs/banks is determined by the non-existence of
liabilities in the form of deposits vis-à-vis non-MFIs/non-banks, while the
borderline with “Insurance Corporations and pension funds” (S.2125) is
determined by the non-existence of liabilities in the form of insurance
technical reserves.
S.2123.1
Investment Funds
This category consists of all types of investment funds, except from Money
Market Funds (MMFs), which are classified under sub-sector “Other
Monetary Financial Institutions/Banks (S.2122.2)”.
Investment funds consist of all collective investment undertakings investing
in financial and non-financial assets to the extent that their sole objective is
the investment of capital raised from the public. They include those
undertakings whose units/shares are, at the request of the holder,
repurchased or redeemed directly or indirectly out of the undertaking’s
assets and those undertakings which have a fixed number of issued
shares and whose shareholders have to buy or sell existing shares when
entering or leaving the fund. Investment funds may be constituted
pursuant to Community or national law under contract law (as a common
fund managed by management companies), trust law (as a unit trust),
company law (as an investment company) or any other similar mechanism.
A list comprising the Investment Funds of all Euro Area Member States
can
be
found
at
the
ECB
website
(http://www.ecb.int/stats/money/mfi/funds/html/index.en.html)
S.2123.2.1
Financial Vehicle Corporations
This category includes the undertakings whose principal activity meets
both of the following criteria:
a) they intend to carry out, or carry out, one or more securitisation
transactions and are insulated from the risk of bankruptcy or any other
default of the originator:
b) they issue, or intend to issue, securities, securitsation fund units, other
debt instruments and/or financial derivatives and/or legally or economically
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owns, or may own, assets underlying the issue of securities, securitisation
fund units, other debt instruments and/or financial derivatives that are
offered for sale to the public or sold on the basis of private placements.
Securitisation means a transaction or scheme whereby an asset (or pool of
assets) is transferred to the financial vehicle corporation, which is separate
from the originator and serves the purpose of the securitisation; and/or the
credit risk of an asset (or pool of assets), or part thereof, is transferred to
the investors in the securities, securitsation fund units, other debt
instruments and/or financial derivatives issued by the financial vehicle
corporation.
Financial vehicle corporations shall be constituted according to EU Law or
national regulatory provisions, either: (i) under the law of contract (as
common funds managed by management companies), or (ii) under trust
law, or (iii) under a statute (as a public limited company) or (iv) according
to any other arrangement with similar effects.
S.2123.2.2
Security and Derivative Dealers
This category consists of all investment firms which provide investment
services for third parties by investing in securities on own account as their
main business. Investment services are defined as follows: trading of new
or outstanding financial instruments through the acquisition and sale of
those financial instruments for the account and/or risk of the “security and
derivative dealer” for the exclusive purpose of benefiting from the margin
between the acquisition and selling price; this also includes market making
activities. The security and derivative dealers on own account shall be
constituted according to EU or national regulatory provisions
S.2123.2.3
Central Counterparties
This category consists of all financial institutions that act as intermediaries
between security market participants. Central counterparties interpose
themselves between the counterparties of the contracts traded in one or
more financial markets, becoming the buyer to every seller and the seller
to every buyer. Currently, the following Central Counterparties are
resident in Other Euro Area Member States:
Name
LCH CLEARNET SA
CCP AUSTRIA ABWICKLUNGSSTELLE FUER
BOERSENGESCHAEFTE GMBH
CASSA DI COMPENSAZIONE E GARANZIA
Page 18 of 35
Country code
FR
AT
IT
CENTRAL BANK OF CYPRUS
ESA 95/4 – Annex 4
EUROSYSTEM
S.2123.2.4
EUROPEAN COMMODITY CLEARING AG
DE
EUROPEAN MULTILATERAL CLEARING FACILITY
NL
EUREX CLEARING AG
HELLENIC EXCHANGES S.A. HOLDING, CLEARING,
SETTLEMENT AND REGISTRY
MEFFCLEAR
OMICLEAR – SOCIEDATDE DE COMPENSACAO DE
MERCADOS DE ENERGIA – SGCCCC SA
DE
GR
ES
PT
Others
This category includes all remaining financial intermediaires not included
elsewhere. Such intermediaries may be
a) financial corporations engaged in lending i.e. entities specialised in
lending. Lending activity comprises financial leasing, hire purchase,
factoring, mortgage lending, mutual guarantee, consumer lending and
any other type of lending as defined according to EU and/or national
regulatory provisions. Financial corporations engaged in lending may
be constituted under the legal form of a joint-stock company or limited
liability company subject to a specialised legal EU and/or national
framework.
Alternatively, the criteria applied to identify such
corporations shall be derived from the instruments of incorporations,
established statues or by-laws, contracts, statutory financial reports or
any other statement with similar effect.
b) financial holding corporations which are principally engaged in
controlling financial corporations or groups of subsidiary financial
corporations and that are not conducting business of such financial
corporations themselves. Control over a corporation is secured by
owning more than half of the voting shares, or by controlling more than
half of the shareholders’ voting power, or by otherwise being able to
determine the general corporate policy, or by controlling entities which
control financial corporations or groups of subsidiary financial
corporations. The criteria in order to identify such corporations shall be
derived from the instruments of incorporations, established statutes or
by-laws, contracts, statutory financial reports or any other statement
with similar effect of the Financial Holding Corporation according to EU
or national regulatory provisions.
c) specialised financial corporations e.g. venture and development capital
companies and export/import financing companies; and
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d) financial intermediary corporations which accept deposits and/or close
substitutes for deposits only from MFIs;
S.2124
Financial Auxiliaries
This sub-sector consists of all financial corporations which are principally
engaged in auxiliary financial activities i.e. activities closely related to
financial intermediation but which are not financial intermediation
themselves.
The following financial corporations should be classified in this sub-sector:
a) insurance brokers, insurance and pension consultants, etc;
b) loan brokers, securities and derivatives brokers, and investment
advisers etc;
c) flotation corporations which manage the issue of securities;
d) corporations whose principal function is to guarantee, by endorsement,
bills and similar instruments;
e) corporations which manage, without issuing, derivative and hedging
instruments, such as currency or interest rate swaps, options and
futures;
f) central supervisory authorities of financial intermediaries and financial
markets when they are separate institutional units;
g) managers of pension funds, mutual funds, etc;
h) corporations providing stock exchange and insurance exchange
services;
i) corporations providing infrastructure for financial markets;and
j) non-profit institutions recognised as independent legal entities serving
financial corporations, but not engaged in financial intermediation or
auxiliary financial activities.
S.2125
Insurance Corporations and Pensions Funds
This sub-sector consists of:
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a) Insurance corporations, which include insurance companies (without
reference to the types of risks they insure), captive insurance
corporations and reinsurance companies; and
b) Pension funds, which have autonomy of decision and keep a
complete set of accounts. Pension funds may be described as
institutions which insure group risks relating to social risks (e.g.
sickness, old age, accidents at work, dependents, incapacitation,
maternity, family) and needs of the insured persons. Typical groups of
participants in such policies include employees of an enterprise or a
group of enterprises, employees of a sector or an industry, and persons
having the same profession. The benefits provided in the insurance
contract might encompass benefits which are paid after death of the
insured to his/her family (mainly death in service), benefits which are
paid after the retirement and benefits which are paid after the insured
became disabled. It should be noted that Social Security Funds are
classified in the “General Government Sector S.213”.
Nonautonomous pension funds are not institutional units and they remain
part of the institutional unit that sets them up.
S.213
General Government
This sector includes all institutional units which are other non-market
producers, whose output is intended for individual and collective
consumption and are mainly financed by compulsory payments made by
units belonging to other sectors and/or institutional units principally
engaged in the redistribution of national income and wealth.
S.21311
Central Government
This sub-sector consists of all administrative departments of the State and
the remaining central agencies/bodies/organisations whose competence
extends over the whole economic territory, except for the administration of
Social Security Funds. Non-profit institutions which are controlled and
mainly financed by the central government and whose competence
extends over the whole economic territory are also included.
S.21312
State Government
This sub-sector consists of state government which are separate
institutional units exercising some of the functions of government at a level
below that of the central government and above that of the governmental
institutional units existing at local level, except for the administration of
social security funds. It also includes those non-profit institutions which
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are controlled and mainly financed by state government and whose
competence is restricted to the economic territory of the states.
S.21313
Local Government
This sub-sector includes those types of public administration whose
competence extends to only a local part of the economic territory. The
local offices of social security funds are excluded. Non-profit institutions
which are controlled and mainly financed by local governments and whose
competence is restricted to the economic territories of the local
government are also included.
S.21314
Social Security Funds
This sub-sector includes all the central, state and local institutional units
whose principal activity is to provide social benefits and which fulfill each of
the following criteria:
a) by law or by regulation certain groups of the population are obliged to
participate in the scheme or to pay contributions
b) the general government sector is responsible for the management of
these units and for the settlement or approval of the contributions and
benefits, independently from its role as supervisory body or employer.
Usually there is no direct link between the amount of the contribution paid
by an individual and the risk to which this individual is exposed.
S.214
Households
This sector comprises individuals or groups of individuals in their capacity
as consumers and possibly also as entrepreneurs producing market goods
and non-financial and financial services. It also includes individuals or
groups of individuals as producers of goods and non-financial services for
exclusively own final use.
Households, in their capacity as consumers, may be defined as small
groups of persons who (a) share the same living accommodation, (b)
pool some or all of their income and wealth and (c) consume certain types
of goods and services collectively, mainly housing and food.
The abovementioned units’ principal source of income is derived from
employee compensation, property income, transfers from other sectors
and receipts from the disposal of market products.
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The “Households” S.214 sector includes:
a) individuals or groups of individuals whose principal activity is
consumption or production of goods and non-financial services for
exclusively own final use;
b) sole proprietorships and partnerships without independent legal status
owned by households which are market producers;
c) non-profit institutions serving households, which either do not have
independent legal status or have an independent legal status but are of
minor significance; and
d) persons living permanently in institutions who have little of no
autonomy of action or decision in economic matters e.g. members of
religious orders living in monasteries, long-term patients in hospitals,
prisoners serving long sentences, old persons living permanently in
retirement homes. Such people are treated as comprising, together, a
single institutional unit i.e. a single household.
S.214.1
Employers (including own-account workers)
This sub-sector consists of the group of households who are owners of
unincorporated enterprises with or without paid employees. The largest
source of income for the household as a whole, even if it does not always
exceed the half of total household income, emanates from their activity as
producers of market goods and services. For the purposes of these
Guidelines, households who are employers of housemaids only, should be
excluded from this sub-sector and classified in “Private individuals
(S.214.2)”.
S.214.2
Private individuals
This sub-sector consists of all units in Households except those classified
as employers, but includes households who are employers of housemaids
only. It mainly consists of households whose largest source of income is
either their compensation as employees, or property income, or income
from their retirement and other pensions, including pensions from previous
employers or other current transfers, or persons living permanently in
institutions, for who the criterion of the largest source of income does not
apply.
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S.215
Non-Profit Institutions Serving Households
This sector consists of non-profit institutions which are separate legal
entities providing non-market goods and services to households. Their
principal source of income, apart from those derived from occasional
sales, emanate from voluntary contributions in cash or in kind, from
households in their capacity as consumers, from payments made by
General Governments and from property income. When NPISHs:
a) are mainly funded and controlled by the General Government, then
they are classified under the “General Government” sector S.213;
b) are either not independent legal entities or they are independent legal
entities but are not very significant, then they are included in the sector
“Households” S.214. Paragraph S.214(c) is relevant.
The “NPISHs” sector includes the following types of NPISHs that provide
non-market goods and services to households:
a) trade unions, professional and scientific associations, consumers’
associations, political parties, churches, convents, metropolis and
religious societies, including those financed but not controlled by
governments;
b) social, cultural, recreational and sports clubs, societies, associations,
groups, organisations and unions; and
c) charities, relief and aid organisations financed by voluntary transfers in
cash or in kind from other institutional units, including those serving
non-resident units.
S.2
REST OF THE WORLD SECTORS
This section provides description on the sector breakdown of the units that
are resident in the Rest of the World i.e. residents in countries other than
Cyprus and Other Member States of the Euro Area.
All residents in the Rest of the World should be further classified by
country based on the guidelines described in paragraphs 3.2.1, 3.2.3,
3.2.4 of these Guidelines.
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S.211
Non-Financial Corporations
This sector consists of independent legal entities which are market
producers and whose principal activity is the production of goods and
non-financial services. The institutional units included in this sector can
take the following legal forms:
e) private and public corporations, co-operatives and partnerships;
f) non-profit institutions
corporations;
or
associations
serving
non-financial
g) holding corporations controlling a group of corporations whose
predominant activity is the production of goods and non-financial
services; and
h) public producers which by virtue of special legislation are recognised
as independent legal entities and which are market producers.
S.212
Financial Corporations
This sector consists of all corporations which are principally engaged in
financial intermediation and/or in auxiliary financial activities.
Financial intermediation is the activity in the context of which an
institutional unit acquires financial assets and, at the same time incurs
liabilities on its own account by engaging in financial transactions on the
market.
Through the financial intermediation process, funds are
channeled between third parties with a surplus on one side and those with
a lack of funds on the other. A financial intermediary does not simply act
as an agent, but places itself at risk by acquiring financial assets and
incurring liabilities on its own account.
Auxiliary financial activities are activities that facilitate financial
intermediation. Financial auxiliaries do not set themselves at risk by
acquiring financial assets or incurring liabilities.
The Institutional units included in this sector can take the following legal
forms:
f) private and public corporations, co-operative corporations and
partnerships which are recognised as independent legal entities;
g) non-profit institutions or associations recognised as independent legal
entities which are principally engaged in financial intermediation and/or
auxiliary financial activities or which are serving financial corporations;
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h) holding corporations, if the group of subsidiaries within the economic
territory as a whole is principally engaged in financial intermediation
and/or in auxiliary financial services;
i) unincorporated mutual funds owned by a group of participants, and
whose management is undertaken by other financial corporations.
These funds are institutional units by convention, separate from the
managing financial corporation; and
j) public producers, which by virtue of special legislation are recognised
as independent legal entities, which are principally engaged in financial
intermediation and/or in auxiliary financial activities;
S.2121
Central Banks
This sub-sector consists of all financial corporations whose principal
function is to issue currency, to maintain the internal and external value of
the currency and to manage and administer all or part of the international
reserves of a country.
S.2121
National Central Banks
This sector includes the National Central Bank or central monetary
agencies of public origin (e.g. agencies managing foreign exchange or
issuing currency), which keep a complete set of accounts and enjoy
autonomy of decision in relation to central government. This sub-sector
does not include bodies, other than the central bank, which regulate or
supervise financial corporations or financial markets. These are classified
in sub-sector “Financial Auxiliaries”.
S.2122
Other Banks
This sub-sector consists of all credit institutions and all other financial
institutions the principal activity of which is:
c) to accept deposits and/or close substitutes for deposits from
institutional units other than banks, and
d) to grant credits and/or to make investments in securities for their own
account (at least in economic terms).
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S.2122.1
Banks
This sector includes commercial banks, universal banks, all purpose
banks, savings banks, co-operative credit banks, specialised banks, credit
unions, post office giro institutions resident in the respective country.
This sector also includes some supranational or international organisations
that undertake “banking activities” as central monetary authorities.
However, if their activities have features of a development bank, mainly
invloving long-term financial for capital investment projects, it should be
classified under sector “EU Organisations” (S.216.1) or as “International
Organisations” (S.216.2).
Annex 3 and the Electronic Register include the list of International
Organisations, which should be included under the sector “S.2122.1 Banks”, also indicating the relevant country code.
S.2122.2
Money Market Funds (MMFs)
MMFs are defined as those collective investment institutions
e) the units of which are, in terms of liquidity, close substitutes for
deposits, and
f) which primarily invest in money market instruments and/or in MMF
shares/units and/or in other transferable debt instruments with a
residual maturity of upto and including one year, and/or in bank
deposits, and/or pursuing a rate of return that approaches the interest
rates of money market instruments.
S.2123
Other Financial Intermediaries, except Insurance Corporations and
Pension Funds
This sub-sector consists of all financial corporations which are principally
engaged in financial intermediation by incurring liabilities in forms other
than deposits and/or close substitutes for deposits, from institutional units
other than MFIs/banks or insurance technical reserves.
The borderline with MFIs/banks is determined by the non-existence of
liabilities in the form of deposits vis-à-vis non-MFIs/non-banks, while the
borderline with “Insurance Corporations and pension funds” (S.2125) is
determined by the non-existence of liabilities in the form of insurance
technical reserves.
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S.2123.1
Investment Funds
This category consists of all types of investment funds, except from Money
Market Funds (MMFs), which are classified under sub-sector “Banks
(S.2122.2)”.
Investment funds consist of all collective investment undertakings investing
in financial and non-financial assets to the extent that their sole objective is
the investment of capital raised from the public. They include those
undertakings whose units/shares are, at the request of the holder,
repurchased or redeemed directly or indirectly out of the undertaking’s
assets and those undertakings which have a fixed number of issued
shares and whose shareholders have to buy or sell existing shares when
entering or leaving the fund. Investment funds may be constituted
pursuant to national law under contract law (as a common fund managed
by management companies), trust law (as a unit trust), company law (as
an investment company) or any other similar mechanism.
S.2123.2.1
Financial Vehicle Corporations
This category includes the undertakings whose principal activity meets
both of the following criteria:
a) they intend to carry out, or carry out, one or more securitisation
transactions and are insulated from the risk of bankruptcy or any other
default of the originator:
b) they issue, or intend to issue, securities, securitsation fund units, other
debt instruments and/or financial derivatives and/or legally or economically
owns, or may own, assets underlying the issue of securities, securitisation
fund units, other debt instruments and/or financial derivatives that are
offered for sale to the public or sold on the basis of private placements.
Securitisation means a transaction or scheme whereby an asset (or pool of
assets) is transferred to the financial vehicle corporation, which is separate
from the originator and serves the purpose of the securitisation; and/or the
credit risk of an asset (or pool of assets), or part thereof, is transferred to
the investors in the securities, securitsation fund units, other debt
instruments and/or financial derivatives issued by the financial vehicle
corporation.
Financial vehicle corporations shall be constituted according to national
regulatory provisions, either: (i) under the law of contract (as common
funds managed by management companies), or (ii) under trust law, or (iii)
under a statute (as a public limited company) or (iv) according to any other
arrangement with similar effects.
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S.2123.2.2
Security and Derivative Dealers
This category consists of all investment firms which provide investment
services for third parties by investing in securities on own account as their
main business. Investment services are defined as follows: trading of new
or outstanding financial instruments through the acquisition and sale of
those financial instruments for the account and/or risk of the “security and
derivative dealer” for the exclusive purpose of benefiting from the margin
between the acquisition and selling price; this also includes market making
activities. The security and derivative dealers on own account shall be
constituted according to national regulatory provisions.
S.2123.2.3
Central Counterparties
This category consists of all financial institutions that act as intermediaries
between security market participants. Central counterparties interpose
themselves between the counterparties of the contracts traded in one or
more financial markets, becoming the buyer to every seller and the seller
to every buyer.
Examples of Central Counterparties of the Rest of the World, are the
following:
S.2123.2.4
Name
BUCHAREST CLEARING HOUSE S.A
Country code
RO
ROMANIAN CLEARING HOUSE S.A.
RO
EUROCCP
GB
ICE CLEAR EUROPE
KRAJOWY DEPOZYT PAPIEROW WARTOCIOWYCH S.A.
(THE NATIONAL DEPOSITORY FOR SECURITIES)
KOZPONTI ELSZAMOLOHAZ ES ERTEKTAR (BUDAPEST)
ZRT. (CENTRAL CLEARING HOUSE AND
DEPOSITORY/BUDAPEST)
LCH.CLEARNET
GB
NORD POOL CLEARING ASA
NO
NASDAQ OMX STOCKHOLM AB
SE
VPS ASA
NO
PL
HU
GB
Others
This category includes all remaining financial intermediaires not included
elsewhere. Such intermediaries may be
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e) financial corporations engaged in lending i.e. entities specialised in
lending. Lending activity comprises financial leasing, hire purchase,
factoring, mortgage lending, mutual guarantee, consumer lending and
any other type of lending as defined according to national regulatory
provisions.
Financial corporations engaged in lending may be
constituted under the legal form of a joint-stock company or limited
liability company subject to a specialised legal national framework.
Alternatively, the criteria applied to identify such corporations shall be
derived from the instruments of incorporations, established statues or
by-laws, contracts, statutory financial reports or any other statement
with similar effect.
f)
financial holding corporations which are principally engaged in
controlling financial corporations or groups of subsidiary financial
corporations and that are not conducting business of such financial
corporations themselves. Control over a corporation is secured by
owning more than half of the voting shares, or by controlling more than
half of the shareholders’ voting power, or by otherwise being able to
determine the general corporate policy, or by controlling entities which
control financial corporations or groups of subsidiary financial
corporations. The criteria in order to identify such corporations shall be
derived from the instruments of incorporations, established statutes or
by-laws, contracts, statutory financial reports or any other statement
with similar effect of the Financial Holding Corporation according to
national regulatory provisions.
g) specialised financial corporations e.g. venture and development capital
companies and export/import financing companies; and
h) financial intermediary corporations which accept deposits and/or close
substitutes for deposits only from banks;
S.2124
Financial Auxiliaries
This sub-sector consists of all financial corporations which are principally
engaged in auxiliary financial activities i.e. activities closely related to
financial intermediation but which are not financial intermediation
themselves.
The following financial corporations should be classified in this sub-sector:
k) insurance brokers, insurance and pension consultants, etc;
l) loan brokers, securities and derivatives brokers, and investment
advisers etc;
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m) flotation corporations which manage the issue of securities;
n) corporations whose principal function is to guarantee, by endorsement,
bills and similar instruments;
o) corporations which manage, without issuing, derivative and hedging
instruments, such as currency or interest rate swaps, options and
futures;
p) central supervisory authorities of financial intermediaries and financial
markets when they are separate institutional units;
q) managers of pension funds, mutual funds, etc;
r) corporations providing stock exchange and insurance exchange
services;
s) corporations providing infrastructure for financial markets;and
t) non-profit institutions recognised as independent legal entities serving
financial corporations, but not engaged in financial intermediation or
auxiliary financial activities.
S.2125
Insurance Corporations and Pensions Funds
This sub-sector consists of:
c) Insurance corporations, which include insurance companies (without
reference to the types of risks they insure), captive insurance
corporations and reinsurance companies; and
d) Pension funds, which have autonomy of decision and keep a
complete set of accounts. Pension funds may be described as
institutions which insure group risks relating to social risks (e.g.
sickness, old age, accidents at work, dependents, incapacitation,
maternity, family) and needs of the insured persons. Typical groups of
participants in such policies include employees of an enterprise or a
group of enterprises, employees of a sector or an industry, and persons
having the same profession. The benefits provided in the insurance
contract might encompass benefits which are paid after death of the
insured to his/her family (mainly death in service), benefits which are
paid after the retirement and benefits which are paid after the insured
became disabled. It should be noted that Social Security Funds are
classified in the “General Government Sector S.213”.
Non-
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autonomous pension funds are not institutional units and they remain
part of the institutional unit that sets them up.
S.213
General Government
This sector includes all institutional units which are other non-market
producers, whose output is intended for individual and collective
consumption and are mainly financed by compulsory payments made by
units belonging to other sectors and/or institutional units principally
engaged in the redistribution of national income and wealth.
S.21311
Central Government
This sub-sector consists of all administrative departments of the State and
the remaining central agencies/bodies/organisations whose competence
extends over the whole economic territory, except for the administration of
Social Security Funds. Non-profit institutions which are controlled and
mainly financed by the central government and whose competence
extends over the whole economic territory are also included.
By convention, this sector also includes some supranational and
international organisations, including those physically located within the
euro area. Annex 3 and the Electronic Register include the list of those
international organisations, included under the sector “S.21311 - Central
Government”, also indicating the relevant country codes.
S.21312
State Government
This sub-sector consists of state government which are separate
institutional units exercising some of the functions of government at a level
below that of the central government and above that of the governmental
institutional units existing at local level, except for the administration of
social security funds. It also includes those non-profit institutions which
are controlled and mainly financed by state government and whose
competence is restricted to the economic territory of the states.
S.21313
Local Government
This sub-sector includes those types of public administration whose
competence extends to only a local part of the economic territory. The
local offices of social security funds are excluded. Non-profit institutions
which are controlled and mainly financed by local governments and whose
competence is restricted to the economic territories of the local
government are also included.
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S.21314
Social Security Funds
This sub-sector includes all the central, state and local institutional units
whose principal activity is to provide social benefits and which fulfill each of
the following criteria:
c) by law or by regulation certain groups of the population are obliged to
participate in the scheme or to pay contributions
d) the general government sector is responsible for the management of
these units and for the settlement or approval of the contributions and
benefits, independently from its role as supervisory body or employer.
Usually there is no direct link between the amount of the contribution paid
by an individual and the risk to which this individual is exposed.
S.214
Households
This sector comprises individuals or groups of individuals in their capacity
as consumers and possibly also as entrepreneurs producing market goods
and non-financial and financial services. It also includes individuals or
groups of individuals as producers of goods and non-financial services for
exclusively own final use.
Households, in their capacity as consumers, may be defined as small
groups of persons who (a) share the same living accommodation, (b)
pool some or all of their income and wealth and (c) consume certain types
of goods and services collectively, mainly housing and food.
The abovementioned units’ principal source of income is derived from
employee compensation, property income, transfers from other sectors
and receipts from the disposal of market products.
The “Households” S.214 sector includes:
e) individuals or groups of individuals whose principal activity is
consumption or production of goods and non-financial services for
exclusively own final use;
f) sole proprietorships and partnerships without independent legal status
owned by households which are market producers;
g) non-profit institutions serving households, which either do not have
independent legal status or have an independent legal status but are of
minor significance; and
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h) persons living permanently in institutions who have little of no
autonomy of action or decision in economic matters e.g. members of
religious orders living in monasteries, long-term patients in hospitals,
prisoners serving long sentences, old persons living permanently in
retirement homes. Such people are treated as comprising, together, a
single institutional unit i.e. a single household.
S.214.1
Employers (including own-account workers)
This sub-sector consists of the group of households who are owners of
unincorporated enterprises with or without paid employees. The largest
source of income for the household as a whole, even if it does not always
exceed the half of total household income, emanates from their activity as
producers of market goods and services. For the purposes of these
Guidelines, households who are employers of housemaids only, should be
excluded from this sub-sector and classified in “Private individuals
(S.214.2)”.
S.214.2
Private individuals
This sub-sector consists of all units in Households except those classified
as employers, but includes households who are employers of housemaids
only. It mainly consists of households whose largest source of income is
either their compensation as employees, or property income, or income
from their retirement and other pensions, including pensions from previous
employers or other current transfers, or persons living permanently in
institutions, for who the criterion of the largest source of income does not
apply.
S.215
Non-Profit Institutions Serving Households
This sector consists of non-profit institutions which are separate legal
entities providing non-market goods and services to households. Their
principal source of income, apart from those derived from occasional
sales, emanate from voluntary contributions in cash or in kind, from
households in their capacity as consumers, from payments made by
General Governments and from property income. When NPISHs:
c) are mainly funded and controlled by the General Government, then
they are classified under the “General Government” sector S.213;
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d) are either not independent legal entities or they are independent legal
entities but are not very significant, then they are included in the sector
“Households” S.214. Paragraph S.214(c) is relevant.
The “NPISHs” sector includes the following types of NPISHs that provide
non-market goods and services to households:
d) trade unions, professional and scientific associations, consumers’
associations, political parties, churches, convents, metropolis and
religious societies, including those financed but not controlled by
governments;
e) social, cultural, recreational and sports clubs, societies, associations,
groups, organisations and unions; and
f)
S.216
charities, relief and aid organisations financed by voluntary transfers in
cash or in kind from other institutional units, including those serving
non-resident units.
EU and International Organisations
This sector includes organisations which though they are Rest of the
World, they cannot be allocated to any country, since they cannot be
considered as legally resident in the country in which they are physically
resident.
S.216.1
EU Organisations
S.216.2
International Organisations
Annex 3 and the Electronic Register include all units identified and
classified in sub-sectors “EU Organisations (S.216.1)” and “International
Organisations (S.216.2), also indicating the relevant country codes.
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