Government Finance Statistics Manual 2014

38 Government Finance Statistics Manual 2014

payments surpluses, offi cial foreign currency opera-

tions, the proceeds of privatization, fi scal surpluses,

and/or receipts resulting from commodity exports.

2.153 Th e establishment of an SWF raises the issue

of whether this fund is classifi ed as part of the general

government, as a public corporation, or outside the

public sector. Th e classifi cation of a sovereign wealth

fund controlled by government in the general govern-

ment sector or fi nancial corporations subsectors is

determined by the same sectorization principles that

apply to any other entity, as described earlier in this

chapter (see paragraph 2.124).

2.154 A resident SWF controlled by government

may, or may not satisfy the defi nition of an institu-

tional unit:

• If the SWF is not an institutional unit, it is classi-
  fi ed with the unit that controls it.


• If the resident SWF is an institutional unit, it is
  classifi ed as:
   A public fi nancial corporation if it is providing
  fi nancial services on a market basis
   A general government unit (an extrabudgetary
  fund or social security fund^43 ) if it satisfi es the
  defi nition of a government unit (see paragraph
  2.38) and is simply a passive holder of assets
  and liabilities (see paragraph 2.42).
  2.155 If the SWF is an entity incorporated abroad
  or quasi-corporation located abroad, it is classifi ed as a
  separate institutional unit in the fi nancial corporations
  subsector of the economy in which the entity is legally
  constituted, or in the absence of legal incorporation,
  is legally domiciled. In such circumstances, all general
  government transactions and stock positions with the
  SWF should be refl ected in the general government
  account with the rest of the world as the counterparty.

Market Regulatory Agencies

2.156 Market regulatory agencies act on behalf of

a government (or a regional organization with govern-

ments as its members), and infl uence the market for

specifi c goods or services directly and/or indirectly.

Th ese agencies may infl uence the market directly by

acting as buyers and sellers of the goods or services

and may infl uence the market indirectly through

(^43) SWFs that hold and manage wealth designated to provide social
benefi ts will be included in social security funds.
regulations, rulings, compliance laws, or standards, to
impact the production, price, and marketing of spe-
cifi c products. Th e regulations may cover the terms
and conditions of supplying the goods and services
and in particular the price allowed to be charged and/
or to whom the goods and services are distributed. It
is most common for a regulatory agency to control ag-
ricultural products, monopolistic markets, or, in some
cases, natural resources.
2.157 Th e nature of these market regulatory agen-
cies may diff er. Th e nature of each agency should be
investigated to decide the sector classifi cation ac-
cording to sectorization principles. At one end of
the spectrum, some agencies are merely distributing
subsidies, while others may have an administrative,
advisory, standard or price setting, or collective ad-
vertising function. At the other end of the spectrum,
the agency may have total control over all aspects of
the production and distribution process, including
being the only legal buyer/seller of the products.
2.158 Following the residence principle, those
market regulatory agencies that meet the defi nition
of an international or regional organization are not
included in the statistics of the individual member
countries, but their activities should be refl ected in
regional data (see Appendix 5). By convention, fi nan-
cial regulatory (supervisory) bodies are considered as
fi nancial corporations, specifi cally as fi nancial auxil-
iaries when they are separate institutional units. For
those resident market regulatory agencies involved
with nonfi nancial goods and services, the following
guidance applies:

• Th ose agencies that do not satisfy the criteria
  to be an institutional unit remain an integral
  part of the general government unit that con-
  trols them. Th is would usually be the case for
  those agencies exclusively or principally in-
  volved in the distribution of subsidies on behalf
  of government.


• Th ose agencies that satisfy the criteria to be insti-
  tutional units, and that are mainly nonmarket pro-
  ducers, such as performing some administrative
  functions, setting standards, or overseeing and
  regulating the production process, should be clas-
  sifi ed in the general government sector. Although
  the agency may have active participation of
  members from the market it serves, government