Brexit: 13 answers to client questions

1. How will our clients be impacted?

We do not anticipate any impact to our clients across the bank. All services delivered, contractual arrangements with KAS BANK N.V. and account management/ relationship management personnel will remain the same. Behind the scenes we are taking all the necessary steps with our network to ensure business continuity. To date most of this work relates to contract re-papering with entities that have made firm decisions to relocate their business to an alternative jurisdiction. Other stakeholders have advised KAS BANK that they have assessed that there is no impact on their KAS BANK relationship and existing contracts remain valid.
We continue to have an open dialogue with all our clients and stakeholders and are adapting our planning when necessary to ensure that access to all markets is maintained.
Our UK clients will continue to be serviced via the UK Branch. Should there be any new legal or regulatory obligations these will be advised and if necessary, re-papering will be carried out e.g.: reference to the UK Financial Services Compensation Scheme will be changed (current reference is to the Dutch equivalent), reference to passporting will no longer be correct.

2. How does Brexit impact KAS BANK after the take-over by CACEIS?

Due to the take-over by CACIES, KAS BANK remains for the time being a Dutch bank with a UK Branch. From a Dutch Bank/Home State perspective there may be changes to the contractual arrangements we have with existing UK counterparties and other UK based service providers. KAS BANK and CACEIS are liaising with all these stakeholders and is addressing any changes being imposed. These will not impact our client base.
From a UK Branch perspective, the existing financial services passporting arrangements will cease. The UK Government has legislated for a Temporary Permissions Regime ('TPR') which will enable passported firms to continue operating in the UK until the end of 2020, while simultaneously applying for so-called 'third country' branch authorisation. This will have no impact on current contracts with clients.

3. What stance has KAS BANK taken with regards to its planning and what will be the roll of CACEIS after the take-over?

KAS BANK has based its Brexit planning on a no-deal scenario. We will therefore be fully prepared on 31 October 2019 should there be a hard Brexit. We do not anticipate that KAS BANK will be fully merged with CACEIS during the coming months. Until the merger is completed KAS BANK will remain a Dutch Bank regulated by the Dutch National Bank (De Nederlandsche Bank - DNB).

4. What steps has KAS BANK taken to ensure business as usual after 31 October 2019?

Regardless of the outcome of the negotiations we can reassure our clients that it will be business as usual for all our stakeholders. We have taken the following steps:

• After the referendum result was announced, KAS BANK established a Brexit Task Force to monitor developments and assess the impact. The Task Force is made up of multidisciplinary senior employees and reports to the Managing Board. The Task Force has delegated responsibility for addressing the operational impact of Brexit to the Brexit Working Party. The Working Party has engaged all the Managing Directors and they have been charged with identifying all the possible consequences of a no-deal Brexit on their respective departments. This information has been analyzed and forms the basis for the KAS BANK project plan.
• From a UK Branch perspective, we have been in a close dialogue with both PRA (Prudential Regulatory Authority) and FCA (Financial Conduct Authority) since Brexit was announced. External legal advice has been sought and KAS BANK is very clear with regards to next steps. Our priority is to seek third-country Branch authorization in the UK and in the meantime, we have applied to enter the FCA Temporary Permissions Regime. The timeframe for authorization will be outlined by FCA to us after 31 October 2019. Thereafter a further update will be provided.

5. What will the impact be for Dutch investors?

For Dutch investors, services from KAS BANK will remain as they are today. The Task Force will consider the impact of any new or additional UK regulations and advise accordingly. We cannot exclude special measures from the UK authorities at this moment, but we consider the probability small.

6. What impact has Brexit had on my UK custody (market)?

UK custody services will remain as they are today. We have engaged with all relevant parties to ensure that they have also taken the necessary steps to ensure that their services are continuous.

7. What is the impact on Continuous Linked Settlement (CLS)?

Our provider has confirmed that there will be no impact on CLS services.

8. Will clients still have access to the UK financial market (CCP's, Crest, etc.)?

Yes. As previously stated KAS BANK has engaged with the UK network to ensure that their planning will mean that services are continuous.
In addition, the EU has announced temporary recognition to UK Central Counterparties (CCP's) post-Brexit. This means access to UK CCP's will be maintained. The temporary recognition is expected to cover legacy and new (post-Brexit) cleared transactions.

9. Will client asset protection be maintained?

KAS BANK continues to be regulated by the Dutch Central Bank (De Nederlandsche Bank - DNB) and the Dutch Authority for the Financial Markets (Autoriteit Financiële Markten - AFM). Therefore, the application of their rules relating to the protection of client assets remain unchanged.
Post-authorisation the UK Branch must comply with FCA CASS Rules (Client Asset Sourcebook). Demonstrating compliance with these rules through our processes and procedures will form part of the authorisation process for the UK Branch.

10. What is the impact of Brexit and Data Protection (GDPR)?

After Brexit the UK Data Protection Act 2018 remains in place and the EU Withdrawal Act incorporates GDPR into UK law to sit alongside it.
GDPR allows personal data to be shared between EU member states. The transfer of data to third-countries outside the EU that do not ensure adequate protection is prohibited. The UK should meet the adequacy finding and this is to be finalised as part of the EU-UK negotiations. There will be EU-UK data transfer restrictions until adequacy is confirmed. The situation is still being negotiated and could lead to contract re-papering.

11. Will Brexit impact the services we offer?

We do not expect any changes to the products and services we currently offer to clients. There may be additional opportunities post Brexit that we will explore.

12. What happens next?

Our immediate priority is to continue liaising with the Dutch and UK regulators and monitor developments with regards to the negotiations on the withdrawal agreement.
The UK Branch authorization is the priority for 2019 and the Branch has taken all the steps needed to ensure that we have FCA approval well before the TPR ends in December 2020.
Despite the take-over by CACEIS, KAS BANK continues to work on the whole-bank action plan and address all the possible implications that have been identified and require action.
KAS BANK also continues to closely track the outcome of political negotiations and their impact. Our project plan and timeline will be updated accordingly.

13. Are there any additional regulatory or legal obligations that clients' need to be made aware of?

At this stage we are not aware of any new or additional obligations except for the UK Third Country Branch authorization. However, we continue to monitor developments closely.