1. Item III.9: Head offices and holding companies
Training on general introduction to ESA 2010
Luxembourg, December Eurostat, JMO M4

2. Treatment in ESA 95
In ESA 95, holding corporations were defined as institutional units which controlled a group of subsidiaries (consistent with paragraph 4.37 of SNA 1993).
ESA 95, par. 2,14 states: "Holding corporations are institutional units whose main function is to control and direct a group of subsidiaries.", that is, a holding corporation should have managerial and control tasks, but…

3. Treatment in ESA 95
… ESA 95, par also says: "…. However, holding corporations which are financial corporations themselves are to be allocated to the subsectors according to the main type of financial activity."
So, in some cases, a non-managerial unit (holding assets of other units? holding company) could also be a holding corporation.
Consequences: definitions and classifications are not straightforward

4. Treatment in ESA 2010
ESA 2010 clearly defines (and allign with NACE Rev. 2) head offices and holding corporations.
Par states that head offices and holding companies are institutional units. The two types are:
A head office is a unit that exercises managerial control over its subsidiaries. Head offices are allocated to the dominant non-financial corporations sector of their subsidiaries, unless all or most of their subsidiaries are financial corporations, in which case they are treated as financial auxiliaries (S.126) in the financial corporations sector.
Head offices are described under international standard idustrial classification of all economic activities revision (ISIC Rev. 4), Section M, class 7010 (NACE Rev. 2, M 70.10)

5. Treatment in ESA 2010
Par states that head offices and holding companies are institutional units. The two types are:
A holding company that holds the assets of subsidiary corporations but does not undertake any management activities is a captive financial institution (S.127) and classified as a financial corporation.
Holding companies are described under ISIC Rev.4, Section K, class 6420 (NACE Rev. 2, K 64.20).
Definitions and classifications (at least in theory) are now clear and straightforward.

6. Consequences of the change
There is a danger that under ESA 95, holding companies which simply owned assets on behalf of the group could be wrongly allocated to the non-financial corporations sector.
The situation under ESA 2010 is clear, that such holding companies should be classified to the financial corporations sector. So the consequence is a possible reclassification of institutional units from the non-financial to financial sectors. No aggregates across sectors to national measures will be affected, but value added and financial transactions and financial position measures may be transferred between the non-financial and financial sectors. The value added measures will be negligible, but the change in balance sheet entries for financial assets and liabilities can be very large

7. References ESA 95 ESA 2010 ESA 95 Holding corporations
ESA 95
ESA 2010
ESA 95 Holding corporations
ESA 2010 Head offices
2.13e, 2.23e, 2.40e, 2.43
2.14a, 2.46e, 2.65e
ESA 2010 Holding companies
2.14b, 2.65f