The future for the handful of major pension accounts that came up for grabs recently in the Netherlands has largely been decided. As reported in IPE last month, Chase has acquired the business of ABP, the fund for Dutch civil servants and is also ru-moured to have gained another high profile account, believed to be Nedlloyd, although Chase themselves are unwilling to comment on this. Ac-cording to Chase's Nadine Nagarnitte, there were eight pension schemes put out to tender following the Dutch central bank's (DNB) decision to withdraw from the custody services area.

Some of the pension schemes that were with the central bank have gone to the local sub-custodian KAS Associates, which is partly owned by the Amsterdam Stock Exchange. KAS specialises in custody, but some of the global players have questioned the way in which it has acquired this new business. The first pension scheme to go out to tender, DSM, did not hold RFPs, and KAS as the domestic service provider, gained the business as a formality.

One global player that has fared particularly well from this arrangement is the Bank of New York, through its unofficial tie-up with KAS. As well as DSM, the Unilever pension fund and the fund for GPs, Artsen, have also gone to KAS/BoNY.

Northern Trust gained the business of KLM, the other big pension fund relinquished by the central bank. Peter Verduin of Citibank in Amsterdam, which did not pick up any business from the central bank, comments that what has happened in the last year is that the role of KAS Associates has changed dramatically. KAS was the cash clearer and depositary for the central bank.

"In most other countries that is considered to be the job of the central bank. So the bank came under pressure to take on this role and it was agreed that the bank would give up its role as custodian for pension funds.

"A number of RFPs have been set up and the main beneficiary of this process has been KAS," he says.

Verduin adds that KAS has a good name as a local bank, but says he has some reservations about it, "given its relative size and lack of world-class rating, given the important issues weighing on the market in the coming years. One of the main issues will be the bank's credit rating. For customers, KAS is not on the same league as Citibank, ABN, Rabobank or Chase." That rating will not be strengthened by the announcement that the Amsterdam stock exchange is to sell its 60% of KAS back to the associate members of KAS.

As part of the restructuring taking place in the Dutch securities market, the Ministry of Finance has instructed the central bank and the Securities Board of the Netherlands (STE) to set up a supervisory framework for the Amsterdam stock exchange's clearing and settlement systems.

This has resulted in new rules for clearing members at the AEX. According to Chantal Vis at MeesPierson, the changes involve two new classifications for clearing members and minimum capital requirements. The changes are "in the interest of those operating in the market that a central body (AEX Effectenclearing) takes over the counterparty risk of every completed transaction by acting as a counterparty to both buyer and seller."

The two classifications are direct clearing member (DCM), with capital requirements of Dfl20m and general clearing member (GCM) with capital requirements of Dfl50m. Clearing members will also be subject to external supervision by the DNB. The intention had been to introduce the new structure on 1 January this year, but many potential members have not been able to complete the changes to computer systems in time. The intention remains to have the new structure in place, but in the meantime, the AEX is working on 'an interim solution'. By a Special Correspondent"

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