Note 36  Structured entities  The Consolidated Entity engages in various transactions with Structured Entities (SEs). SEs are designed so that voting or similar  rights are not the dominant factor in affecting an investor’s returns (e.g. decisions relate to administrative tasks only, and contractual  arrangements determine the direction of activities). Generally, SEs do not have a range of operating and financing activities for which  substantive decision-making is required continuously. The Consolidated Entity has interests in SEs that are involved in  securitisations, asset backed financing structures and investment funds. Securitisations involve transferring assets into a vehicle that sells beneficial interests to investors through the issue of debt and  equity notes with varying levels of subordination. The notes are collateralised by the assets transferred to these vehicles and pay a  return based on the returns of those assets, with residual returns paid to the most subordinated investor. These vehicles are created  for securitising assets of the Consolidated Entity or of its clients.  The Consolidated Entity engages in securitisation of mortgages, finance leases, credit card receivables and other types of  instruments. The Consolidated Entity may serve as a sponsor, servicer, underwriter, liquidity provider, derivative counterparty,  purchaser of notes and/or purchaser of residual interest units. The Consolidated Entity may also provide redraw facilities or loan  commitments to securitisation vehicles. Income received by the Consolidated Entity during the year from interests held at the reporting date relates to interest, management  fees, servicing fees, and gains and losses from revaluing financial instruments. Asset-backed vehicles are used to provide tailored lending for the purchase or lease of assets transferred by the Consolidated Entity  or its clients. The assets are normally pledged as collateral to the lenders. The Consolidated Entity engages in raising finance for assets such as aircraft, rail cars, electronic and IT equipment. The  Consolidated Entity may act as a lender, manager, derivative counterparty, purchaser of notes and/or purchaser of residual interest  units or guarantor. Income received by the Consolidated Entity during the year from interests held at the reporting date relates to revaluation of  derivatives, dividends, interest and servicing fees.  SEs formed for the purpose of offering alternative investment opportunities relate primarily to fund-linked or funds of funds products.  Investment structures are designed to provide investors with specified returns based on the returns of an underlying security,  referenced asset or index by issuing credit-linked or equity-linked notes to investors. SEs typically obtain exposure to the underlying  asset or index through a derivative instrument (e.g. swaps or call options) and place the remaining proceeds on deposit to serve as  collateral for the derivative. The Consolidated Entity may act as sponsor, manager, broker, funder, liquidity provider or derivative counterparty.  Income received by the Consolidated Entity during the year from interests held at the reporting date relates to management fees,  interest and revaluation of derivatives.  At 31 March 2014, the Consolidated Entity’s interests in unconsolidated investment funds is immaterial.  Interests in unconsolidated SEs include, but are not limited to, debt and equity investments, guarantees, liquidity agreements,  commitments, fees from investment structures, and fees from derivative instruments that expose the Consolidated Entity to the risks  of the unconsolidated SE. Interests do not include plain vanilla derivatives (e.g. interest rate swaps and currency swaps) and  positions where the Consolidated Entity: (i) creates rather than absorbs variability of the unconsolidated SE (e.g. purchase of credit  protection under a credit default swap); (ii) acts as underwriter or placement agent, or provides administrative, trustee or other  services to third party managed SEs; and (iii) transfers assets and does not have any other interest deemed to be significant in the  SE. Trading positions have been included in the following table. Securitisations Asset-backed financing  Investment funds  Interests held  171 