Institutional Sector Classification Guide for SA

The Institutional Sector Classification Guide for South Africa is designed to assist respondents to complete the returns or surveys, and classify the institutional sectors according to macroeconomic statistics principles. The guide further provides information on the institutional sector classification of transactors that engage in economic activity such as production, consumption, saving and investment, paying particular attention to the classification of issuers and holders of securities, recipients and suppliers of credit, and buyers and sellers of financial assets.

The Economic Statistics Department of the SARB regularly collects financial data in respect of the major institutional sectors from financial institutions such as banks, insurers and pension funds; non-financial institutions; and other organisations in the public and the private sector. This information is used to compile macroeconomic accounts for the analysis of, inter alia, the sectoral balance sheets, the flow of funds between sectors, and establishing which sectors require which types of financing and which sectors provide in these needs.

See link for more detail:

Sector Guide 2017

 

Purpose of sector classification

This guide describes the institutional sector classification to be applied by organisations participating in South African Reserve Bank surveys, which are used in the compilation and publication of macroeconomic statistics. For instance, in terms of regulation 59(4) as published in the Government Gazette No. 30629 of 1 January 2008, banks shall provide an institutional breakdown of liabilities and assets (Form BA 900) in accordance with the information contained in this guide. Members of the formal exchanges also classify their clients who participate in trades in accordance with the framework set by the guide (see Table 1). The guide provides information on the institutional sector classification of transactors engaging in economic activity such as production, consumption, saving and investment, paying particular attention to the classification of issuers and holders of securities, recipients and suppliers of credit, and buyers and sellers of financial assets.

The Institutional Sector Classification Guide for South Africa divides institutional sectors according to the guidelines of the 2008 System of National Accounts (SNA). The SNA consists of a coherent, consistent and integrated set of macroeconomic accounts, balance sheets and tables based on a set of internationally agreed concepts, definitions, classifications and accounting rules. A core element of this publication is the Institutional Sector Classification which is presented in Section II.

The Research Department of the South African Reserve Bank (the Bank) regularly collects financial data in respect of the major institutional sectors from financial institutions such as banks, insurers and pension funds, and from other organisations in the public and the private sector. This information is used to compile macroeconomic accounts for the analysis of, inter alia, the flow of funds between sectors, establishing which sectors require which types of financing and which sectors provide in these needs.

To enable the reader to get an overview of the public sector at a glance, all the public-sector institutions contained in the Institutional Sector Classification Guide for South Africa have been repeated in Appendix A. The lists of institutions related to the public sector in Appendix A serve as the reference list of “RSA public-sector bodies” for the purposes of the regulations related to counterparty capital-adequacy risk weighting in terms of the Mutual Banks Act 124 of 1993 and the Banks Act 94 of 1990, respectively. The original source of the lists of the public-sector institutional units is the Constitution of the Republic of South Africa Act 108 of 1996 and the  Public Finance Management Act 1 of 1999, also published at www.treasury.gov.za.

The economic activities in which institutional sectors or units engage can be further classified according to the Standard Industrial Classification of all Economic

 

Institutional units and sectors

The total economy consists of institutional sectors, which are an aggregation of institutional units. An institutional unit is an economic entity that can in its own right own assets, incur liabilities and engage in economic activity and transactions with other entities. Institutional units are either legal or social entities, or households, and can be divided between resident and non-resident units. An institutional unit is a resident of the Republic of South Africa when it has a centre of economic interest in South Africa, that is, when it has premises within the economic territory of South Africa from where it engages or intends to engage indefinitely or over a finite but long period (normally more than one year) in significant economic activity.

All resident institutional units are grouped into four main mutually exclusive institutional sectors on the basis of similarity of principal economic objectives, functions and behaviour.

These institutional sectors are the:

(i) financial corporate sector;
(ii) non-financial corporate sector;
(iii) general government sector (including social security funds); and
(iv) household sector (including non-profit institutions serving households).

Corporations in the financial and non-financial sectors are resident institutional units whose principal activity is the market production of goods and services at economically significant prices with the intent to generate a profit or financial gain for their shareholders. Shareholders collectively own these institutional units and have the authority to appoint directors responsible for their general management. Quasi-corporations are unincorporated enterprises each with their own separate set of financial accounts, and are treated as corporations, classified as institutional units separate from the units to which they legally belong. Therefore, quasi-corporations owned by households or government units are grouped with corporations in the financial or non-financial corporate sectors. In compiling the financial corporate sector, the Monetary and Financial Statistics Manual (MFSM) is used, which provides a set of tools for identifying, classifying and recording stocks and flows of financial assets and liabilities.

Institutional units in the general government sector are unique legal entities established by the political process with legislative, judicial or executive authority over other units within a given area. The general government sector consists of the institutional units of central, provincial and local government inclusive of

  • social security funds at all levels of government; and
  • non-market, non-profit institutions that are controlled and mainly financed by government units.

However, general government excludes public corporations, even when government units own all the equity of such corporations, and also excludes quasi-corporations owned and controlled by government units. Unincorporated enterprises owned by government units that are not quasi-corporations (and therefore do not have separate accounts) remain an integral part of those government units and are therefore included in the general government sector. In order to analyse the economic impact of the general government, the principles of the Government Finance Statistics Manual (GFS2001) are applied. The primary purpose of the GFS Manual is to provide a comprehensive, conceptual and accounting framework suitable for analysing and evaluating fiscal policy, especially the performance of the general government sector and the broader public sector of any country.

household is an individual or small group of individuals sharing the same living accom-modation, and pooling some or all of their income and wealth while consuming goods and services such as housing and food collectively. Defined as an institutional sector, the household sector includes unincorporated business enterprises without own separate sets of financial accounts owned by households, whether market producers or producing for own final use. Only those household-owned unincorporated market enterprises that constitute quasi-corporations since they have own separate sets of financial accounts are treated as separate institutional units.

To complete the set of macroeconomic accounts, economic activity and transactions between resident and non-resident units need to be recorded. From an accounting perspective it is convenient to describe the rest of the world as an institutional sector. Non-resident institutional units transacting with resident institutional units are grouped into the foreign sector or the rest of the world. The balance of payments (BoP), which is a statistical statement that systematically summarises, for a specific period, the economic transactions of an economy with the rest of the world, is compiled to present this information.

All resident institutional units are also grouped into the private sector and the public sector. The private sector consists of all resident institutional units not controlled or owned by institutional units in the general government sector. The public sector consists of all institutional units in the general government sector, and corporate sector institutional units in the financial and non-financial sectors owned or controlled by units in the general government sector. The public sector consists of the

  • public financial corporate sector;
  • public non-financial corporate sector; and
  • general government sector.

See links for more detail.

Full document:

Sector Guide 2011

 

Sectors:

Financial corporate sector

Non-financial corporate sector

General government sector

Household sector

Foreign sector - rest of the world

 

Appendices:

Appendix A - Public sector

Appendix B - Standard industrial classification of all economic activities

 

Purpose of sector classification

This guide describes the institutional sector classification to be applied by organisations participating in South African Reserve Bank surveys, which are used in the compilation and publication of macroeconomic statistics. In terms of regulation 59(4) as published in the Government Gazette No 21726 of 8 November 2000, banks shall provide an institutional breakdown of liabilities and assets (Form DI 900) in accordance with the information contained in this guide. Members of the formal exchanges also classify their clients participating in trades in accordance with the framework set by the guide; see Table 4. The guide provides information on the institutional sector classification of transactors engaging in economic activity such as production, consumption, saving and investment, paying particular attention to the classification of issuers and holders of securities, recipients and suppliers of credit, and buyers and sellers of financial assets.

The Institutional Sector Classification Guide for South Africa divides institutional sectors according to the 1993 System of National Accounts (SNA). The SNA is an internationally accepted guide providing an analytical framework for the systematic recording of economic transactions. The core element of this publication is the Institutional Sector Classification which is presented in Section II.

The Research Department of the South African Reserve Bank collects financial data in respect of the major institutional sectors on a regular basis from financial institutions, such as banks, insurers and pension funds, as well as from other organisations in the public and the private sector. This information is used to compile macroeconomic accounts for the analysis of, inter alia, the flow of funds between sectors, establishing which sectors require which types of financing and which sectors provide in these needs.

To enable the reader to get an overview of the public sector at a glance, all the public-sector institutions contained in the Institutional Sector Classification Guide have been repeated in Appendix A. The lists of institutions related to the public sector in Appendix A serve as the reference list of "RSA public-sector bodies" for the purposes of the regulations related to counterparty capital adequacy risk weighting in terms of the Mutual Banks Act, 1993 (Act No 124 of 1993) and the Banks Act, 1990 (Act No 94 of 1990), respectively. The original source of the lists of the public-sector institutional units is the Constitution of the Republic of South Africa Act, 1996 (Act No 108 of 1996) and the Public Finance Management Act, 1999 (Act No 1 of 1999 as amended by Act No 29 of 1999), also published on www.treasury.gov.za.

The economic activities in which institutional sectors or units engage can be further classified according to the Standard Industrial Classification of all Economic Activities (SIC), which is presented in Appendix B, Table 2 and Table 3 of this publication.

 

Institutional units and sectors

The total economy consists of institutional sectors, which are an aggregation of institutional units. An institutional unit is an economic entity that in its own right can own assets, incur liabilities and engage in economic activity and transactions with other entities. Institutional units are either legal or social entities, or households, and can be divided between resident and non-resident units. An institutional unit is a resident of the Republic of South Africa when it has a center of economic interest in South Africa, i.e. when it has premises within the economic territory of South Africa from where it engages or intends to engage indefinitely or over a finite but long period of time (normally more than one year) in significant economic activity.

All resident institutional units are grouped into four main mutually exclusive institutional sectors on the basis of similarity of principal economic objectives, functions and behaviour. These institutional sectors are:

  • the financial corporate sector;
  • the non-financial corporate sector;
  • the general government sector (including social security funds); and
  • the household sector (including non-profit institutions serving households).

Corporations in the financial and non-financial sectors are resident institutional units whose principal activity is the market production of goods and services at economically significant prices with the intent to generate a profit or financial gain for the shareholders. Shareholders collectively own these institutional units and have the authority to appoint directors responsible for their general management. Quasi-corporations are unincorporated enterprises each with their own separate set of financial accounts, and are treated as corporations, classified as institutional units separate from the units to which they legally belong. Therefore, quasi-corporations owned by households or government units are grouped with corporations in the financial or non-financial corporate sectors.

Institutional units in the general government sector are unique legal entities established by the political process with legislative, judicial or executive authority over other units within a given area. The general government sector consists of the institutional units of central, provincial and local government inclusive of:

  • social security funds at all levels of government; and
  • non-market, non-profit institutions that are controlled and mainly financed by government units.

However, general government excludes public corporations, even when government units own all the equity of such corporations, and also excludes quasi-corporations owned and controlled by government units. Unincorporated enterprises owned by government units that are not quasi-corporations (and therefore do not have separate accounts) remain an integral part of those government units and are therefore included in the general government sector.

A household is an individual or small group of individuals sharing the same living accommodation, and pooling some or all of their income and wealth while consuming goods and services such as housing and food collectively. Defined as an institutional sector, the household sector includes unincorporated business enterprises without own separate sets of financial accounts owned by households, whether market producers or producing for own final use. Only those household unincorporated market enterprises that constitute quasi-corporations are treated as separate institutional units.

To complete the set of macroeconomic accounts, economic activity and transactions between resident and non-resident units need to be recorded. From an accounting perspective it is convenient to describe the rest of the world as an institutional sector. Non-resident institutional units transacting with resident institutional units are grouped into the foreign sector or the rest of the world.

All resident institutional units are also grouped into the private sector and the public sector. The private sector consists of all resident institutional units not controlled or owned by institutional units in the general government sector. The public sector consists of all institutional units in the general government sector, and corporate sector institutional units in the financial and non-financial sectors owned or controlled by units in the general government sector. The public sector consists of:

  • the public financial corporate sector;
  • the public non-financial corporate sector; and
  • the general government sector.
 
Table 1: Institutional units and sectors
Total economy Financial corporate sector Monetary authority
 
South African Reserve Bank
Corporation for Public Deposits
    Banks Banks Mutual banks South African branches of foreign banks
Postbank Land Bank
    Insurers and pension funds Insurers Medical schemes
Pension and provident funds
    Other financial intermediaries Collective investment schemes
Finance companies
Public-sector financial intermediaries Financial controlling companies
    Financial auxiliaries Members of formal exchanges
Trust companies Insurance brokers, agents and actuaries
South African representative offices of foreign banks
Other private-sector financial auxiliaries
Public-sector financial auxiliaries
  Non-financial corporate sector Private non-financial corporate sector Incorporated business enterprises
Quasi-corporations of households
    Public non-financial corporate sector Public corporations
Quasi-corporations of the general government sector
  General government sector Central government National government departments
Extra-budgetary institutions
Universities, universities of technology and technikons
Social security funds
    Provincial governments Provincial legislators
Other provincial government units
    Local governments Metropolitan councils
District councils and municipalities
Other local government units
  Household sector Households
Unincorporated business enterprises of households
Non-profit institutions serving households
Private trusts
Friendly societies
 
  Foreign-sector – rest of the world Foreign financial corporate sector Financial companies listed on JSE
Securities Exchange SA
Foreign banks
Other foreign financial corporations
    Foreign non-financial corporate sector Non-financial companies listed on JSE Securities Exchange SA
Other foreign non-financial corporations
    Foreign governments  
    International organisations  
    Other non-residents  

 

See links for more detail.

Full document:

Classification Guide

 

Sectors:

Financial corporate sector

Non-financial corporate sector

General government sector

Household sector

Foreign sector - rest of the world

 

Appendices:

Appendices A and B

Appendix C

 

Tables:

List of tables

 

Purpose of sector classification

The Institutional Sector Classification Guide for South Africa divides institutions into institutional sectors as suggested by the 1993 System of National Accounts (1993 SNA) for the analysis of economic transactions. An alternative classification system, the Standard Industrial Classification of all Economic Activities or SIC, will be discussed in Schedule A.

The Research Department of the South African Reserve Bank collects financial data, in respect of the major institutional sectors, on a regular basis from financial institutions, such as banks, insurers and pension funds, as well as from other organisations such as public corporations and local authorities. This information is used, inter alia, for analysing the flow of funds between sectors, establishing which sectors require which types of financing and which sectors provide in these particular needs. Thus, in the case of an issuer of stock, for example a public corporation such as ESKOM, it is important to know from which sectors of the economy subscriptions are received for the new stock issue, and also to keep track of transactions in which such existing securities are traded between sectors.

Due to the numerous individual organisations and persons that are economically active, it is necessary to make meaningful groupings or sector classifications of the parties involved. It is therefore the purpose of this institutional sector classification to serve as a guide in this respect for the organisations rendering financial survey returns to the Research Department of the Reserve Bank.

The list of public corporations, in the sector for public enterprises, namely sector 12 from page 28, also serves as the reference list of "public corporations" for the purposes of the regulations promulgated in terms of the Mutual Banks Act (No. 124 of 1993) and the Banks Act (No. 94 of 1990), respectively.

Full Document:

Sector Guide 1999