1. Confidential 111 The Financial Industry Business Ontology – Business Entities Introductory Explanatory Material – with notes Mike Bennett, EDM Council August 31 2012

2. Confidential Overview These slides introduce the basic concepts in the FIBO Business Entities ontologies Examples are included in the screen shots, to give an idea of the scope of each concept This should be read in conjunction with the basic introductory slides provided elsewhere. A base minimum of the underlying theory is repeated here.

3. Confidential This Deck Two parts, introducing –[I] The types of entity in the model –[II] Ownership and Control hierarchies Powerpoint “Notes” are provided for each slide – these should be read to make sense of these diagrams The model contains many other relationships and facts which are not shown here

4. Confidential Reminder: Theory of Meaning Any FIBO model consists of: –Things (OWL Classes) A Thing in this sense is a set theory construct Arranged in a hierarchy called a “Taxonomy” –Like taxonomy of species –Facts (OWL Properties) Simple facts (names, dates etc.) –e.g. “Issue Date” is a date Relationship Facts (relate one thing to another thing) –e.g. “Share confers Voting Rights” –Things so referenced are also in taxonomic hierarchies –Other set theory concepts Disjoints, Unions

5. Confidential Reminder: Theory of Meaning Taxonomy: Like Taxonomy of Species –Animal v Plant –Vertebrate v invertebrate –Mammals, fish etc. Each thing is defined by what facts distinguish it For each new thing: –What sort of thing is it? –What facts distinguish it from other things? If it has a backbone, it belongs to the set of all things which are a vertebrate; if it also suckles its young it belongs to that set of vertebrates which are a mammal.

6. Confidential PART I TYPES OF ENTITY IN THE MODEL

7. Confidential Types of Entity

8. Confidential Types of Entity

9. Confidential Types of Entity: Company

10. Confidential Legal Persons Fundamentals

11. Confidential Legal Entity Fundamentals 11 Copyright © 2010 EDM Council Inc.

12. Confidential Legal Entity v Legal Person 12 Copyright © 2010 EDM Council Inc.

13. Confidential Legal Persons Overview

14. Confidential Formal Organization Fundamentals

15. Confidential Formal Organization Overview

16. Confidential Business Entities Taxonomy

17. Confidential Corporation Facts

18. Confidential PART II RELATIONSHIPS BETWEEN ENTITIES

19. Confidential This part – overview In this part of the presentation, we introduce the most basic of the relationships between Incorporated Companies. –These are not between “Entity” or even “Legal Entity” but are specific to the kind of entity which is an Incorporated Company. –This is because those relationships arise from the holding of shares in one such entity by another such entity. –In fact, since these relationships are about controlling ownership, they arise only from the holding of voting shares –Similar but different relationships may hold for relationships to or among other kinds of Legal Person Relationships of control such as managerial control, the ability to appoint board members and so on, are separate to the relationships shown here. They exist in the model but are not shown in these slides. Similarly, ownership in and of itself i.e. beneficial ownership, is a separate concept. This may be with or without control. These are elsewhere in the model and not illustrated here.

20. Confidential This Part: Overview We start by introducing the basic concepts of share ownership These are then specialized according to : –What kinds of shares are owned (voting shares) –What kind of entity owns them (a limited company) Note that parent and subsidiary relationships may only be between companies, therefore we have to narrow down the scope of ownership, from that of any entity, to that entity which is itself a limited company.

21. Confidential Share Ownership

22. Confidential Control = Voting Share

23. Confidential Company Based Control

24. Confidential Ownership Relationships

25. Confidential Part Ownership

26. Confidential Parent Ownership

27. Confidential Resultant Model

28. Confidential Ultimate Parents

29. Confidential Taking it Forward There are many other relationships –Ownership versus Control –Ownership by entities other than Corporations –Beneficial Ownership –Management control versus share-based control There are different definitions of “Parent” –50% + 1 share –Other thresholds –LEI: 25% + 1 share Next Iteration: –Define type of party which has a lower and upper threshold within which it is defined as being of interest –This party then participates in relationships which are of interest for various regulatory and reporting purposes.

30. Confidential Main Take-away Points We have shown the basic kinds of entity which exist –Organizations are distinct from Legal Persons –Legal persons may be natural persons or artificial persons –Legal Entity is a separate but similar concept We have looked at how the important relationships between most entities are defined –These are relationships of ownership with control –Exist only because voting shares are held –Apply only to Incorporated Company Other relationships exist in the model but only a sub- set will be in the initial release

31. Confidential Contact Mike Bennett –mbennett@edmcouncil.org 31 Copyright © 2010 EDM Council Inc.