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IPS152 Giovanna B. et al.
composition. A common strategy does not stand out. Many of them do not
fall into any of the extreme categories we created (threshold > 0.8). It is worth
noting that the frequency of pass-through is similar for foreign and domestic
sponsored entities.

Figure 5: Distribution of foreign assets and abilities

4. Conclusion
Control and residency are key concepts for BoP. Due to their complex
structure, however, SPEs pose challenges for the BoP community and the
implementation of the TF-SPE definition. In this paper, we have shown that
sponsor and parent are not always the same entity. In almost half of the
reporting population, the legal and economic owner differ.
With this in mind, a key challenge going forward is to identify the proper
proxy for control. If we believe that the sponsor is the best option, then we
would need to clarify to which extent domestic sponsored entities have
autonomy of decision. If they are not intuitional units, we would need to
clarify whether their account should be consolidated into the sponsor or the
parent. In this regard, it is also worth mentioning that the analysis did not
identify a clear difference in the cross-border activities of domestic and
foreign sponsored entities. This may suggest that consolidating SPEs into the
account of a domestic entity would undermine the purpose of the definition
itself, blurring the concept of FDI and financial intermediation. Finally, the
analysis of the thresholds on their portfolios shows very diverse strategies,
suggesting that considering only SPEs who transact almost entirely with non-
residents may greatly reduce the number of entities included.

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