Cross-Ownership Explained Simply
The updated ESOS Act expands the government’s power to examine ownership links between providers and education agents. This falls under the strengthened “fit and proper provider” requirements.
Cross-ownership matters because it can create conflicts of interest, hidden commission flows, and unethical recruitment incentives.
The reforms aim to eliminate these practices to protect students and restore sector integrity:
- Oversee of onshore student transfers for financial gain
- Commission inflation
- Unethical incentives disguised as marketing or admin fees
- Manipulation of visa outcomes
- Low-quality recruitment pipelines
What Providers Should
- Identify Cross-Ownership Risks
- Document Everything
- Create Internal Governance Controls
- Be Transparent
Example Scenarios
Scenario 1 — Direct Ownership
A provider’s CEO owns 60% of an education agent business that recruits 300 students per year.
→ High regulatory risk
→ Must be declared, monitored, and documented
→ Commissions will be scrutinised
Scenario 2 — Indirect Ownership
A provider and an agent share the same parent company.
→ Regulators will investigate whether the arrangement influences recruitment decisions
Scenario 3 — “Invisible” Ownership
A director’s spouse owns the agent business.
→ Still cross-ownership
→ Still subject to scrutiny
How Educli Can Help Providers Manage Cross-Ownership Risk:
- Maintain ownership declarations for all agents
- Store conflict-of-interest registers
- Track commission patterns and anomalies
- Provide an auditable compliance log
- Flag risks under MD115
- Align with PRISMS agent data
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