Company Type Properties for Shareholding Disclosure
Some disclosure regimes apply differently to different types of investors. For example, the major shareholding regime in the UK applies differently depending on whether the investor is a UK Investment Manager or not. In that specific case, the thresholds for a major shareholder are lower for non-UK Investment Managers.
FundApps distinguishes between the various applications for specific disclosure regimes via the portfolio property CompanyType. It is an important property to set as it determines which set of rules will run against the uploaded positions. Please note that it is possible to have more than one CompanyType set for a given entity, for example:
The determination of which rules to run happens in the pre-condition of a rule, where the value of the CompanyType property is used as the input. See the example below:
Major: United Kingdom - Home - Investment Manager
Major: United Kingdom - Home - Non-Investment Manager
Not all disclosure regimes around the globe distinguish between different company types. The jurisdictions that do are Canada, United Kingdom, the USA, Italy, South Korea, and South Africa. Please find below a description of the valid CompanyType values as well as the impact it has on setting these.
Valid CompanyType values
CA-AMRS - Canadian Eligible Institutional Investor
To be considered for every Entity and Portfolio. This confirms if the entity (or portfolio) is an eligible institutional investor (EII) per Canada's rules. EIIs include (for example) Canadian financial institutions, banking or insurance entities regulated and incorporated in the United States or Japan, credit institutions licensed in France, Germany, Italy or the UK, or an investment manager licensed in Canada, Japan, the United States, France, Germany, Italy or the UK. If the entity or portfolio is an EII, include "AMRS" as a value in its CompanyType. Setting this means the entity or portfolio uses the Alternative Monthly Reporting System ('AMRS') procedure and not the Early Warning Report. Before declaring this value, please ensure that section A.3.1.2 starting "An EII for these purposes means:..." of Canadian aosphere memo is read and understood.
For entities that are direct "parents" of a FundApps portfolio, one must assess if it meets the criteria referenced in the memo. For any entities that control, fully or partially own, or are otherwise affiliated with the direct parent, one must also assess if they are an EII.
FundApps will evaluate each entity and portfolios obligation with respect to its own status which aligns with memo section A.7.2.
The reliance on determining EII (and declaring "AMRS") is not a requirement but an exemptive framework. In cases of uncertainty, consider entities or portfolios as non-EII, which means AMRS should not be stated.
UKIM - UK Investment Manager or equivalent
To be considered for every Entity. This stands for a UK Investment Manager, EEA investment manager, or non-EEA investment manager equivalent. See the UK aosphere memo section A.6.2 for the precise definition before selecting this value. This allows all EEA investment managers and non-EEA investment managers provided that they can lawfully manage those investments in a non-EEA State and that if they were to manage their investments in the UK would require a Part 4A permission, to disclose at the EU minimum thresholds of 5% and 10% and not the lower 3% with 1% incremental thresholds that would otherwise apply for holdings in UK issuers. It is defined in UK regulatory note.
US Section 13 related values:
For the MajorUS rules related to section 13, the default regime that will run is 13D (rule: MajorUS - 13D), unless you can confirm that all entities in the aggregation tree in FundApps meet the requirement of either of the following categories listed here (in order of increasing stipulations). For example, if entities meet the US-QII requirements, then declare US-QII. If they only meet the US Passive Investor requirements but not QII, then declare USPassiveInvestor.
Note that since FundApps currently supports the case where one filing type is used for the whole company which means that all entities should be set with the same value, not a mix.
USPassiveInvestor - US -13G Passive Investor
To be considered for every Entity and Portfolio. This ensures FundApps invokes the 13G Passive Investor version of the Section 13 rules. If your firm's entities are US QIIs (see above), then use the selection US-QII instead. If an entity is deemed to be a "passive investor" (defined in Section 240.13d-1(c) of the Securities Exchange Act of 1934), then include this value. See the US aosphere memo Section 1.7(b)(iii) and 7.2(c) for further detail on how to determine if your entity(s) are considered as "passive investors."
US-QII - US - Qualified Institutional Investor
If an entity/portfolio that is a QII is owned by, managed by, or voting rights held by an entity (its parent/control person entity), the parent can also be a QII as long as the parent itself does not directly hold, or its subsidiaries or affiliates (that are not QIIs) do not directly and indirectly hold, in aggregate, more than 1% of the securities of the subject class. (Please note that FundApps can not automate or calculate a parent's holdings as it relates to inclusion or exclusion as a QII under 240.13d-1(b)(1)(ii)(G).) See the US aosphere memo and section 240.13d-1(b)for detail.
Please note: If neither US-QII or USPassiveInvestor are provided, FundApps applies the 13D rule.
ITFM - Italian Fund Manager
To be considered for every Entity. This is to confirm the entity (and its controlling entities) are equivalent to an Italian/European asset manager/financial intermediary. This would apply to a non-EU asset manager if it would be subject to similar regulations if it had been set up in Europe. Before declaring this value, please ensure that section A.6.16 of the Italy aosphere memo is read and understood.
For entities that are direct "parents" of a FundApps portfolio, one must assess if it meets the criteria referenced in the memo. For any entities that control or partially own the direct parent entity, one must also assess if they can rely on this exemption. The memo notes that this must be assessed case-by-case if the controlling entities are not confirmed to meet disaggregation requirements.
In all cases, this value should only be used if all entities are confirmed to meet the requirements, and must be set (consistently - do not mix entities with ITFM and without) on all entities in the aggregation tree. If not, this value should not be used for any entities as it is not required (i.e. it is an exemption).
NotZA - Not a financial institution defined specifically in South African law
To be considered for every Portfolio. This confirms the portfolio is: 1) NOT defined as (or managed by) an institution" defined precisely in Section 1.1.2(a) of the South Africa aosphere memo, and 2) NOT a Section 24(d) Person (which is "a person who buys or sells listed securities in order to: (i) give effect to a reconstruction of a company or group of companies by the issue or reallocation of shares, or a take-over or an amalgamation; or (ii) effect a change in control over management or business of the company.")
It is very likely that including this value (NotZA) would be prudent unless you have specific portfolios or legal entities organised under these laws in South Africa (and meet the above criteria).
In very specific circumstances a non-South African financial institution could still be required to disclose under the FMA regime. It should be noted that FundApps will not pick those specific circumstances up if NotZA is set as a CompanyType.
KRPassiveInvestor - KR - 5% Passive Investor
To be considered for every Entity and Portfolio. This ensures FundApps invokes the Passive Investor version of the Korean 5% rule. If a top entity or portfolio is deemed to be a "passive investor" (whose equity ownership purpose is not company management), then include this value. See the Korean aosphere memo (section A.1.4), or check this guide from the Financial Supervisory Service for further details on "passive investors."
US16AExempt - Institutions or persons not deemed to be beneficial owners under section 16(a) in US
To be considered for every Entity and Portfolio. This excludes entities and portfolios from the 'Major: US - Section 16(A) - Insider - Precondition' and 'Major: US - Section 16(A) - Insider - Issuer' rules that are not deemed to be beneficial owners under section 16(a) in the US. For more information on the definition of beneficial ownership under section 16(a), please refer to the aosphere memo section B.1.6 or this guidance note.
PH-EligibleII - Filipino "institutional investor" who acquires securities in the ordinary course of business without a control intent
To be considered for every Entity and Portfolio. This confirms if the entity acquires securities in the ordinary course of business and is a broker, bank, or other institutional investors of a type specified in SRC Rule 18.1.3 (Section 1.4 of the Philippines aosphere memo). Setting this means the entity is eligible for the less onerous ‘Short SEC Form 18-AS’ disclosure, and not the ‘Long SEC Form 18-A’.
NotJPAggExempt - applies to co-holders (in terms of the Japan regime) which are Concert parties: co-holders in this arrangement are those that have jointly agreed to transact or vote, (most likely when the parent only has a minority of the voting rights in the subsidiary). This excludes Concert Parties from the mandatory 0.1% exemption.
To be considered for every Entity, including the Top Entity. The majority of our clients are co-holders using the Controlled Undertaking structure, as opposed to the concert parties structure. Read more about the exemption at the Major: Japan rule here.
Please note, FundApps does not fully support an entity aggregation hierarchy where entities/portfolios have mixed company types. For example, if you have both UKIM and non-UKIM entities within your structure, we recommend not using the tag at all to be most conservative. If such scenarios apply to you and you'd like to discuss them further, please reach out to your CSM or FundApps support by emailing email@example.com