The Council of Ministers published the Decree on the Decision regarding Amendment to the Articles of Association of the Central Bank of the Republic of Turkiye (O.G. October 11, 2014, 29142).
The CMB has published the Communiqué No. III-55.1.b Amending on the Communiqué on the Principles regarding Portfolio Management Companies and Activities of Portfolio Management Companies (“Amendment”) (O.G. December 31, 2014, 29222). Certain issues covered by the Amendment are as below:Portfolio management companies shall notify the CMB regarding the ancillary services they plan to render at the stage of obtaining operation permission. In case other ancillary services will be rendered after obtaining the operation permission, a separate notification is required as well. Portfolio management companies cannot engage in brokerage activities, without any exception. The portfolios which the portfolio management company is the sub-portfolio manager cannot be included in the portfolios managed by the portfolio management company.
Furthermore, CMB has published the Communiqué No. III-52.3.a amending on the Communiqué on the Principles regarding Real Estate Investment Funds and the Communiqué No. III-52.4.a Amending on the Communiqué on the Principles regarding Venture Capital Investment Funds (O.G. December 31, 2014, No. 29222) which mainly deal with certain corporate governance rules for real estate and venture capital investment funds.
The CMB has published the Communiqué No. II-27.2 on Right to Squeeze-Out and Right to Sell (O.G. November 12, 2014, No. 29173) (the “Communiqué”) which provides substantial amendments to the previous communiqué. The main issues set out in the Communiqué are as below:If the total amount of voting rights in relation to the shares of the shareholder reaches 98% of the total voting rights of the company, such shareholder becomes controlling shareholder. In case the shareholder becomes controlling shareholder through the procedure explained above or in case any additional shares are purchased by the already controlling shareholder, then right to squeeze-out all the other shareholders for the controlling shareholder and right to sell their shares for the other shareholders occur. It should be noted that such ratio was 95% in the previous communiqué. Such increase could discourage publicly-held companies from getting delisted. Such 98% ratio shall be considered as 95% for the exercise of rights arising or to be arisen until December 31, 2014 and as 97% for the exercise of rights to be arisen until December 31, 2017. Therefore, application processes of the publicly-held companies which have already applied to be delisted will not be interrupted. Certain amendments have been made on the criteria determining the sale price and fair price regarding sale of the shares. As of the date of enforcement of the Communiqué, right to squeeze-out and right to sell shall become exercisable with the additional share purchases of the controlling shareholder. In regards to the finalization of the application to the CMB for right to squeeze-out, a one-month period shall be given to the controlling shareholder as of the publication of the Communiqué in order for the controlling shareholder to reevaluate whether it wishes to exercise such right. In this period, right to sell cannot be exercised either.
The Capital Markets Board (the “CMB”) has published the Regulation on the Principles regarding Activities of Borsa Istanbul A.Ş. (O.G. October 19, 2014, No. 29150) and Regulation of the Principles regarding Borsa Istanbul A.Ş. Activities in relation to Precious Metals and Precious Stones (O.G. October 19, 2014, 29150) which mainly cover the procedures and principles in relation to secure, transparent, efficient, stable, fair and competitive trading of capital market instruments and other agreements, documents and values considered appropriate by the CMB and precious metals and precious stones within Borsa Istanbul A.Ş.
The Council of Ministers published the Decree of on the Decision regarding Public Offering of the Shares of Borsa Istanbul A.Ş. Owned by the Treasury (the “Decree”) (O.G. November 14, 2014, 29175).
The Decree indicates that the B Group shares of Borsa Istanbul A.Ş. owned by the Treasury may be offered to the public until December 31, 2015. However, the ratio of publicly offered shares cannot exceed 42.75% of the total capital of the company. The Decree further sets forth the procedures to be followed regarding the aforementioned public offering.
The Capital Markets Board (the “CMB”) has updated the Guide regarding Investment Services and Activities and Investment Institutions (the “Guide”) with the decision dated September 23, 2014, which has been prepared for the implementation of the Communiqué No. III-37.1 on Principles regarding Investment Services and Activities and Ancillary Services and Communiqué No. III-39.1 on Principles of Establishment and Activities of Investment Institutions. Some of the material issues added into the Guide are listed below:
Principles in relation to operation of portfolio intermediation and risk management units have been determined.
Obligation to employ internal control personnel has been imposed for the companies which will engage in portfolio intermediation activities on derivative instruments.
Principles to be sought in data processing infrastructure of the investment institutions which will engage in portfolio intermediation activities and/or render general custody service have been determined.
Principles regarding monitoring of risks on client basis, in relation to the transactions during transaction intermediation and portfolio intermediation have been determined.
In scope of activities regarding intermediation of purchase and sale, it has been accepted that, meeting activity conditions only for the related activity which is foreseen to be carried out (intermediation of conveyance of orders, transaction intermediation or portfolio intermediation) is sufficient.
CMB has published the Communiqué No. VII-128.7 on the Principles regarding Licensing and Keeping Records of the Registry for the Persons Operating in the Capital Markets (published in the Official Gazette dated August 14, 2014, No. 29088) (“Communiqué”). The Communiqué mainly updates the license types and clarifies the conditions of obtaining licenses for the employees of capital market institutions and publicly-held companies.
As the new Capital Markets Law grants the CMB the authority to regulate procedures and principles of dematerialized capital market instruments, the CMB has issued the Communiqué No. II-13.1 on the Principles and Procedures regarding Keeping Records in relation to Dematerialized Capital Market Instruments (published in the Official Gazette dated August 7, 2014, No. 29081) (“Communiqué”). The Communiqué sets out the accounts to be kept with the Central Registry Agency (MKK), dematerialization, delivery and destruction of the capital market instruments, transactions to be carried out on the capital market instruments other than government debt securities and principles regarding the transactions on government debt securities.
Capital Markets Board (the “CMB”) has issued the Regulation on the Principles regarding the Foundation, Activity, Operation and Supervision of the Central Registry Agency (published in the Official Gazette dated August 7, 2014, No. 29081) (“Regulation”) within scope of the duties and authorities of the Central Registry Agency (MKK) determined by the new Capital Markets Law. The Regulation mainly covers the foundation, membership, and supervision principles as well as the income and principles of premium distribution of MKK.
With the Communique No. III-60.1 on the Principles regarding Mortgage Finance Institutions (published in the Official Gazette dated July 17, 2014, No. 29063) (“Communiqué”), mortgage finance institutions have been regulated for the first time in Turkey, in order for the establishment of modern mortgage system. According to the Communiqué, in parallel with the global practice, the mortgage finance institutions are expected to engage in the activities in two main fields of operation: liquidity facility and securitization.
Certain provisions set forth by the Communiqué are stated below:
Mortgage finance institutions are mainly designated as secondary market institutions which will issue capital market instruments in exchange of loans and debts owed which is taken over or taken as collateral.
Mortgage finance institutions may be established by the institutions such as the housing finance institutions, brokerage firms with broad authorities, asset lease companies and Housing Development Administration of Turkey (TOKİ).
Minimum initial capital of the mortgage finance institutions shall not be less than 10,000,000 Turkish Liras.