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Article 38 CSDR declaration – types of securities accounts

KAS BANK N.V. (hereinafter: "KAS BANK") maintains securities accounts for its clients. From these accounts it appears which securities KAS BANK holds in administration for its clients. These securities may be deposited by KAS BANK at central securities depositories (hereinafter: "CSDs"). KAS BANK is a participant in multiple CSDs. KAS BANK has opened accounts with these CSDs that reflect the securities positions that clients of KAS BANK hold with KAS BANK.

Under Regulation (EU) No 909/2014 of the European Parliament and of the Council of 23 July 2014 on improving securities settlement in the European Union and on central securities depositories (hereinafter: "CSD Regulation"), the accounts opened by KAS BANK with a CSD can be set up in two ways:
1. as an omnibus securities account, i.e. an account with the CSD in which securities belonging to multiple clients of KAS BANK are held (abbreviated "OSA"); or
2. as an individual securities account, i.e. an account with the CSD in which only the securities of one client are held (abbreviated: "ISA").

Under the CSD Regulation KAS BANK is obliged to offer its clients the choice between these two options (i.e. the holding by KAS BANK of your securities in an OSA or an ISA at the CSD). The CSD determines the set-up of the OSAs and ISAs. With this document, KAS BANK would like to inform you as (future) client about these two options and explain to you which levels of protection are associated with an OSA or an ISA, respectively.

Levels of protection concerning OSAs and ISAs

In general
If KAS BANK goes into insolvency, Netherlands law is applicable to the insolvency proceedings. Your securities are protected in the insolvency of KAS BANK. You have the benefit of this protection pursuant to the Netherlands Securities Giro Administration and Transfer Act (Wet giraal effectenverkeer; “SGATA”). This is explained in more detail below.

Your securities entitlement
The SGATA is based on the concept of co-ownership. This means that you, together with other investors who hold securities of the same type, jointly own these securities. Each type of securities constitutes a so-called collective deposit (verzameldepot) that is administered by KAS BANK. Your interest in this deposit and the interest of the other investors are shown by the records of KAS BANK. You and the other investors jointly own the securities in the collective deposit. This collective deposit is segregated from the Bank's assets.

Insolvency of KAS BANK
Because the collective deposit does not form part of the Bank’s assets, your securities are protected in the event of insolvency of KAS BANK. In the event of insolvency an insolvency trustee will be appointed. The insolvency trustee will, on the basis of the records of KAS BANK, first determine who is entitled to which securities and then proceed to return the securities to their legitimate owner.
If the bank is insolvent, it makes no difference whether you have opted for KAS BANK to hold your securities in an OSA or an ISA. In both cases, you have the benefit of the protection of the SGATA.

Shortfalls in a collective deposit
The SGATA includes an arrangement for the situation that the number of securities of a particular type for which KAS BANK has credited its clients exceeds the number of securities of that type for which KAS BANK is credited in the books of the relevant CSD. This is the arrangement for shortfalls in a collective deposit. The arrangement for shortfalls is relevant when the collective deposit must be split up, for example in the event of insolvency of KAS BANK. If there is a shortfall, the client will not receive all its securities, but only part thereof, in proportion to its share in the collective deposit. This arrangement applies regardless of whether the securities are administered in an OSA or an ISA at a CSD level.

Determination of securities holdings
The holding of securities in an ISA at CSD level could entail that in the event of insolvency of KAS BANK it would be easier to determine to whom the securities in the collective deposit belong. However, this does not necessarily mean that an insolvency trustee will be able to release the securities more quickly if the securities are administered in an ISA. The insolvency trustee will also have to take into account the arrangement for shortfalls in a collective deposit under the SGATA and the interests of other securities account holders.

Insolvency of a CSD
This document does not concern the situation that a CSD goes into insolvency. The CSD itself will publish an information document explaining the levels of protection associated with an OSA or an ISA, the consequences of the CSD going into insolvency and whether an OSA or ISA offers advantages for the (end) investor in this situation.

Charges

Opting for an ISA may give rise to additional charges compared to an OSA. This is, amongst others, because KAS BANK has to open additional accounts with external parties and has to perform additional administrative services. The additional costs are one-off and are structured as follows:
- an initial setup fee for charged for every new segregated account to be opened;
- migration and settlement fee charged for the migration of your existing positions in case of a switch request from OSA to ISA

Furthermore, for an ISA third party charges, if applicable and as incurred, will be charged to you.