Special%20Purpose%20Entities

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Special Purpose Entities
Agenda item 8 Issue paper 10

• The Treatment of Special Purpose Entities
• in the Netherlands
• GGNA, May 11th 2009
• Bob Groot
• Statistics Netherlands

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Special Purpose Entities (SPEs)

1. Introduction and definition
2. Types of SPEs
3. SPEs in the Netherlands
4. SPEs in National Accounts
5. Vulnerabilities in data
6. Questions to members of Expert Group

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What are SPEs?

• SNA2008
• A number of institutional units may be described
  as special purpose entities (SPEs) or special
  purpose vehicles. There is no common definition
  of an SPE
• Paragraph 4.55

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What are Special Purpose Entities (SPEs) ?

• Part of multinational company group
• Small resident entity
• Few employees
• Postal box / brass plate
• Large financial flows
• Attracting financial assets abroad
• Re-issuing them abroad
• Securities, loans, stocks
• (Interceding on behalf of) owner of intellectual
  property rights

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Types of SPEs

1. Financing / Holding companies
2. Royalty Licence companies
3. Factoring companies
4. Operational lease companies
5. Special purpose vehicles

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SPEs in the Netherlands

• How big?
• More than 12,000 SPEs in 2008
• More than 1.6 trillion euros on closing balance
  sheet 2008, approx. 3x GDP
• Low (or negative) value added
• Tax gains weigh against costs or loss by SPE
• Other industries profit from presence SPEs

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SPEs in the Netherlands

• How are they identified?
• Project group (CBS and DNB)
• Decision tree
• Criteria to identify SPEs
• Different types of SPEs identified
• Different criteria for different SPE types
• Population delineation between CBS DNB

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SPEs in the Netherlands

• How recorded?
• Dutch Central Bank (DNB) collects data
• SPEs are obliged to report themselves
• Monthly surveys on foreign transactions
• Annual surveys on balance sheet information
• Bi-annual benchmark investigation
• SPEs in National Accounts
• Since Benchmark Revision 2001
• Seperate (sub)sector
• Data presented including and excluding SPEs

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SPEs in National Accounts

• Complete set of national accounts data
• However
• Available source data have limitations
• Not all SPEs report on monthly basis
• Necessary assumptions
• Little data on domestic transactions

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Vulnerabilities in used methods

• Problems in estimating Royalties and licence
  production
• The effect on value added by fluctuations in
  import and export source data
• Effect on estimates capital formation
• Financial services
• Possibly other items booked as financial services
  in monthly reports by SPEs (e.g. investments in
  oil platforms)

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Vulnerabilities in used methods

• Estimates on wages and paid taxes
• No direct information by SPEs yet
• Population delineation CBS, DNB
• Virtually no domestic figures yet

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Questions to members of the Group of Experts

1. Do members have suggestions for improvement of
   the methodology on the treatment of SPEs?
2. Can the described Dutch decision tree on SPEs
   also be used in other countries for the detection
   of SPEs?
3. How do members deal with the problems of limited
   data availability on SPEs?
4. Next to the described five types of SPEs, do
   members have indications for other types of SPEs
   in their countries?