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TOWARD THE INTEGRATION OF THE INSTITUTIONAL INVESTORS

DATABASE INTO THE FINANCIAL ACCOUNTS DATABASE

Working Party on Financial StatisticsWorking Party on Financial Statistics11-12 October 200411-12 October 2004

by Michèle Chavoix-Mannato, OECD/NAFS

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The OECD Institutional Investors The OECD Institutional Investors databasedatabase

AAimed at measuring and analysing the role of institutional investors in capital markets

PPublication annually released

CConcepts based on the SNA 1993/ESA 1995

DData mainly derived o from National Accounts o or from surveys aimed at their compilation

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The OECD Institutional Investors The OECD Institutional Investors databasedatabase

Its content

IInstrumentso Total non-financial assetso Detailed financial assets with a breakdown between residents

and non-residentso Total liabilities

SSectorso Insurance companieso Investment companieso Pension fundso Other

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The OECD Financial Accounts The OECD Financial Accounts databasedatabase

Database recently revived in the framework of the SNA 1993

Publications on transactions and stocks just released

Smaller number of detailed institutional investors sectors

No breakdown between residents and non-residents

Comparison of the classification of assets between II ad FA

IInnssttiittuuttiioonnaall IInnvveessttoorrss FFiinnaanncciiaall aaccccoouunnttss AN Non financial assets AF Financial assets AF Financial assets AFC Cash and deposits AF2 Currency and deposits AFB Bills and bonds AF33 Securities other than shares Issued by residents

Issued by non residents

Short-term Short-term

Long-term Long-term

AFL Loans AF4 Loans Issued by residents Issued by non residents Short-term Short-term Long-term Long-term

AFS Shares AF5 Shares & other equities Issued by residents Issued by non residents

AFO Others

What does exist in II which does not exist in FA

Non-financial assets A plan is underway to collect this information

It is proposed to retain these categories in the additional table FA/II

Breakdown between residents and non-residents the new 2004 FA questionnaire includes a “whom to

whom” cross classification for all assets and liabilities of all institutional sectors

It is proposed to maintain this breakdown at least for bonds and shares

Comparison of the classification of sectors between II ad FA

Institutional investors Financial accounts S121 Central bank

Other monetary financial

institutions S122

of which money market funds

Other financial intermediaries

Investment companies

S123 of which other mutual funds

S124 Financial auxiliaries

Life insurance

Non life insurance

Autonomous pension funds

S125

Insurance corporations and pension funds

Other

II’s Insurance companies & pension funds versus FA’s S125

In II there is a breakdown of the S125 between life insurance non life insurance autonomous pension funds

ProposalProposalThe following breakdown of four categories in the FA/II

additional table could be added: non-life insurance pure non-life reinsurers life insurance autonomous pension funds

II’s Investment companies versus parts of FA’s S122 & S123

The II sector “investment companies” seems to correspond to ‘mutual funds’ No definition in SNA Fortunately, precise definitions in ESA

DefinitionMutual funds are considered as financial intermediaries

…may be classified in sub-sector S122 …

otherwise…in sub-sector S123

Liabilities of II’s Investment companies versus F52 liabilities of FA’s S122 & S123

Comparisons between the total of liabilities of investment companies in II and the liabilities for F52 in sectors S122 and S123

in FA:

results

For several countries, they appear to be equivalent or almost equivalent

In some countries, it is not but it can be explained

II’s Investment companies versus FA’s S122 & S123

ConclusionConclusion Investment companies can be classified

in two sectors: S122 Other monetary financial institutions,

specialized in money market funds

S123 Other financial intermediaries, investing in other investment funds (such as bonds, shares or real estate)

Other information included in II

AApart from the Total non-financial assets and Detailed financial assets, II II includes, for each category of investors, some information on liabilities, in particular:

Total liabilitiesTotal liabilities

of which Net equity of households on life insurance provisions

of which Net equity of households on pension funds

of which Shares/units issud by investment companies

directly held by households

New Table FA/II: SECTORS

FAPart of S122

II

S122P S123A S123B S125A S125B S125C S125DS125A1

Monetary Mutual Funds

Mutual funds,

ex. monetary

Other financial

intermediaries

Non life insurance

life insurance

autonomous pension funds

other

of which

pure reinsurers

NEWTABLEFA/II

S123 S125

Investment companies Insurance companies and pension funds

New Table FA/II: ASSETSSNA codes

ANAF2

AF3 Securities other than shares Issued by residentsIssued by non residents

AF331 AF332AF4 AF41 AF42

AF5 Shares and other equity Issued by residentsIssued by non residents

AF7 Other

long-termLoans short-term long-term

Instruments

Non financial assetsCurrency and deposits

short-term

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The WPFS delegates are requested to state their view on

three recommendations

Recommendation 1:

The WPFS agrees on the principle of better integration of the II database with the FA database.

It accepts the principle of the abandon of the existing II questionnaire to be replaced by an additional table FA/II included in the OECD questionnaire on Financial Accounts.

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Recommendation 2:

The WPFS accepts

the simplified classification of assets

proposed in the additional Table FA/IIFA/II

of the present paper.

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Recommendation 3:

The WPFS accepts

the classification of institutional investors

proposed in the additional Table FA/IIFA/II

of the present paper.

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