Will I be charged any Exit Fees?
No. There are no Exit Fees whether you choose to voluntarily redeem in advance or if you choose to wait until automatic redemption.
Will the 1% Ex-Gratia payment still apply?
Yes. As previously advised, we will make an ex-gratia payment of 1% of your Investment Fund value upon redemption in recognition of the inconvenience and the cost you may incur should you choose to place your investment with another provider. This 1% ex-gratia payment will apply if you choose to redeem prior to automatic redemption – or if you redeemed at automatic redemption.
When will my redemption funds and 1% Ex-Gratia payment be received into my linked account?
Redemption trades (voluntarily placed or automatically redeemed) will be paid into your linked KBCI account in line with the standard settlement process. Depending on your fund, it may take up to 6 working days for your funds to be credited to your linked account. Your 1% ex-gratia payment will be credited to this same linked KBCI account within 4 weeks of your redemption settlement date. The ex-gratia payment is not taxable.
Why are KBCI offering a second ex-gratia payment and who is eligible for it?
Where you redeem at a lower amount than you originally invested, and you decide to reinvest with an alternative provider this is considered a new investment. As a result, this creates a new base level for tax purposes on future gains. Therefore, assuming that you choose to reinvest with an alternative provider and make a gain on that investment (a taxable gain will arise on either (1) redemption by customer or (2) anniversary of 8 years of date of investment which is treated as a deemed redemption under tax rules), you could be at a future tax disadvantage versus had it been possible for you to remain invested with KBCI. This is as the taxable gain on the new investment could be greater due to having a lower base level when compared to the original base level invested with KBCI. Where a gain is made on your KBCI investment at redemption, this future potential disadvantage does not occur.
Although, this potential future tax disadvantage is based on a number of future events, KBCI wants to ensure that you are not potentially disadvantaged as a result of KBCI’s exit from the market, as such this payment will be made regardless of whether you choose to reinvest with an alternative provider or not to the following eligible3 customers:
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investment customers as at the automatic redemption date (date) who redeem at a value lower than the amount of capital they initially invested (after deduction of any entry fees paid).
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investment customers who have voluntarily redeemed since the 16th April 2021 at a value lower than the amount of capital they initially invested (after the deduction of any entry fees paid). The 16th April 2021 is the date KBC Bank Ireland announced the Memorandum of Understanding with Bank of Ireland.
This second ex-gratia payment will be equivalent to 41% of the capital loss incurred.
3.Any capital remediation amounts already received (or due) will be taken into consideration and the second ex-gratia may be adjusted.
When and how will I receive the second ex-gratia payment?
All eligible investment customers as per the eligibility criteria above will receive the second ex-gratia payment (in to their linked KBCI account or by cheque) by 13th March 2023. The second ex-gratia payment is not taxable.
If I am eligible for this second ex-gratia payment, will I still receive the 1% ex-gratia payment?
The second ex-gratia payment is separate to the 1% ex gratia payment. Regardless of your investment value at redemption the 1% ex-gratia payment is being offered to all investment customers as at the automatic redemption date (13th January 2023) and any customer who has voluntarily redeemed since 16th April 2021.
How is the 2nd ex-gratia payment calculated?
The 2nd ex-gratia payment calculation looks at the overall fund performance position and takes in to account all the buy & sell trades customers have conducted in the fund. The 41% is calculated on the net performance position for all sell trades a customer has conducted on/after the 16th April 2021 within the same fund. Also any capital remediation amounts already received (or due) will be taken into consideration and the second ex-gratia may be adjusted
What Net Asset Value (NAV) price will I get when I redeem my Investment Funds?
The NAV price is based on the value of your fund on the next business day after the trade is placed.
Do I need to pay Exit Tax on my redemption value?
As you are invested in our Irish based ExpertEase/Sivek funds, Exit Tax will be deducted at source. Any gains in your fund will be subject to Exit Tax at the prevailing rate (currently 41%).
Do I need to consider the Deposit Guarantee Scheme?
If your linked account is a deposit/current account, you should be aware that the Deposit Guarantee Scheme guarantees your eligible deposits up to the €100,000 per financial institution. Should your total balance on deposit exceed €100,000 after you redeem your investment (including any funds held in a current account), amounts above €100,000 will no longer be covered and you may wish to take action accordingly.
I am also invested in KBC’s Offshore Investment Funds – will this fund be automatically redeemed?
Yes. As KBCI is exiting the Irish market, all investment funds were automatically redeemed on 13th January 2023. You will receive a separate letter from us in relation to your Offshore Investment Funds.
Why have I received multiple letters of this type in relation to my Investment Account?
As you are invested in multiple fund types (within your overall Investment Account), we are providing you with the correct and specific information that applies to each fund.
I do not wish to redeem my investment fund and would like to remain invested – is this possible?
No. On the basis that KBCI is exiting the market and therefore its distribution channels are closing (and the operational services and funding accounts linked to the investments will also close), it will not be possible for customers to remain invested in KBC Investment Funds. The 1% Ex-Gratia will be paid in recognition of the inconvenience and the cost you may incur should you choose to place your investment with another provider. The second ex-gratia payment will be made to any customers (subject to above eligibility criteria) who incur a loss versus their original capital invested amount with KBCI. This payment will be 41% of the loss on your capital (if any) and is to recognize a potential future income tax disadvantage which could occur if you choose to re-invest with another provider and then subsequently make a future gain on that new investment.
Where can I get a copy of the Investment Funds Terms and Conditions?
The Investment Funds Terms & Conditions are available on www.kbc.ie.
What does Clause 26.2.13 in the Investment Fund Terms & Conditions state?
Clause 26.2.13 states that KBC may close the Investment Account for any other valid reason. The reason KBCI is closing your account is due to KBCI exiting the market. Our distribution channels are closing (and the operational services and funding accounts linked to the investments will also close), it will not be possible for customers to remain invested in KBC Investment Funds.
When will my investment account be closed?
Following the automatic redemption and the processing of the ex-gratia payment(s), we will close your investment account. Please consider that when your investment account has been closed, you will no longer be able to access your My Documents folder in the KBC Mobile Banking App. You may wish to download and save your documents for future reference e.g., statements, tax confirmations. If you are not KBC App enabled, you can contact us to request any required documents – please see contact details above.
I’m not happy – how can I lodge a complaint?
We’re sorry to hear that you are dissatisfied and apologise for the inconvenience you may be caused. You have the option to raise a formal complaint by email to complaintsteam@kbc.ie, by phone on 01-6646000 or in writing to our Complaints Team, KBC Bank Ireland, Sandwith Street, Dublin 2.
What if the value of my Investment Fund is down on the automatic redemption day?
Based on overall market performance, the value of your Investment Fund could be more or less than the amount you initially Invested. Since the Memorandum of Understanding announcement, we have sent you multiple letters providing you with as much notice as possible of KBCI’s potential exit from the market and to allow you sufficient time to consider market movements and control the timing of your redemption.
When I took out my investment fund, I was advised that it was a medium to long term product and so I intended to invest for 5 years. I’m unable to do this now due to the automatic redemption. On this basis can you do this?
KBCI investments funds are medium to long term products. However, as KBCI is exiting the market and therefore its distribution channels are closing (and the operational services and funding accounts linked to the investments will also close), it will not be possible for customers to remain invested in KBC Investment Funds. After your funds are redeemed, you have the option to re-invest with an alternative investment fund provider should you wish to do so, and we recommend that you seek independent financial advice on how best to utilise these funds.
Will my Deposit/Current Account that’s linked to my Investment account remain open until the automatic redemption has taken place?
Yes, your Deposit/Current account will remain open until the automatic redemption has occurred. You will receive separate communications regarding those accounts. Your linked account must remain open until both your redemption value and your ex-gratia payment(s) have been credited.
Do KBCI have a legal right to automatically redeem my investment funds?
KBCI are not redeeming your Investment Fund(s). As outlined above, the Board of Directors of the ICAV, has notified KBCI of their decision to terminate the Investment Funds, (pursuant to the ‘Winding Up’ section of the Prospectus), and reserving their right to automatically redeem customers’ investments, (pursuant to the ‘Closure of Funds or Classes’ section of the Prospectus).
I am not happy; I would not have invested if I knew these automatic redemption and termination provisions existed.
This information is contained within the Prospectus, which KBCI as distributor of the Investment Fund(s), made available to you prior to sale via the Key Investor Information document (KIID). You can obtain a copy of this Prospectus at www.kbc.be/kiid.
