The CMB issued Communiqué No. III-37.1 on Principles regarding Investment Services and Activities and Ancillary Services (published in the Official Gazette dated July 11, 2013, No. 28704) and Communiqué No. III-39.1 on Principles regarding Establishment and Activity of Investment Institutions (published in the Official Gazette dated December 12, 2013, No. 28854) (the “Communiqués”).
As intended for the implementation of the Communiqués, the Guide regarding Investment Services and Activities and Investment Institutions (the “Guide”), prepared based on the Capital Markets Law (Law No. 6362) (published in the Official Gazette dated December 30, 2012, No. 28513) and the Communiqués, is adopted as the decision of the CMB numbered i-SPK.37.1, on June 27, 2014.
The main issues covered in the Guide are the scope of investment consultancy activities, principles to be applied when considering one-to-one sharing with regard to investment advice provided by brokerage firms, banks and portfolio management companies and the scope of the capital market instruments regarding portfolio intermediation activities.
The CMB issued a Guide regarding Special Events prepared based on Communiqué No. II-15.1 on Special Events (the “Guideline”) as its decision dated June 27, 2014. With the new Guide, the previous Guide regarding Special Events prepared based on abrogated Communiqué Serial No. VIII/54 on the Public Disclosure of Special Events is abolished.
The Guide mainly sets forth detailed information and rules regarding the disclosure of insider information and ongoing information. It aims to enlighten persons under the obligation of disclosure regarding the disclosures to be made and clarify the questions raised in the daily practice.
The Capital Markets Board (the “CMB”) issued Communiqué No. III-55.1a Amending the Communiqué No. III-55.1 on Principles regarding Portfolio Management Companies and Activities of Portfolio Management Companies (published in the Official Gazette dated June 22, 2014, No. 29038) (the “Communiqué”). The Communiqué entered into force on July,1 2014.
The main issues covered by the Communiqué are as follows:Activities to be carried out by the companies established in order to establish and manage foreign collective investment institutions the shares of which are to be marketed exclusively to the residents outside Turkey, to provide portfolio management services to the residents outside Turkey and to provide ancillary services within the scope of the Communiqué are determined and such companies are exempted from the obligation to create a fund services unit for foreign collective investment institutions which they will establish. Principles regarding type, appraisal, monitoring by Istanbul Settlement and Custody Bank and release of collaterals to be deposited by portfolio management companies in case the CMB considers it necessary with regard to their financial situations; and release of collaterals of portfolio management companies whose operation permission was cancelled, are determined,
The Capital Markets Board has passed Decision No. 16/514, dated May 28, 2014 (the “Decision”) in order to determine the scope of the term “accounting period” stated in the Communiqué No. VI-104.1 on Market Abuse Actions in relation to transactions carried out by persons who are aware of insider or ongoing information or such persons’ spouses, children or the persons who live in the same places with such persons, from the date following the end of “accounting period” in which the financial statements and reports and audit reports are prepared by the issuers until the disclosure of such statements and reports. Transactions carried out in the stated period are deemed to be market abuse actions. According to the Decision, the term “accounting period” stated in the Communiqué No. VI-104.1 on Market Abuse Actions shall be considered as “periods of 6 months and 12 months”.
Within this context, transactions carried out by the persons who are aware of insider or ongoing information or such person’s spouses, children or the persons who live in the same places with such persons shall be considered as market abuse actions when such transactions are carried out from the date following the end of the accounting period of 6 months or the annual accounting period in which the financial statements and reports and audit reports are prepared by the issuers, and until the disclosure of such statements and reports.
The Capital Markets Board passed Decision No. 17/563, dated June 5, 2014 (the “Decision”) in order to determine the scope of the definitions of the “issuer” and “capital market instrument” stated in Communiqué No. VI-104.1 on Market Abuse Actions and Communiqué No. VI-103.1 on the Payment of the Managers Regarding Their Net Trade Incomes to the Issuers.
Within this frame, it is decided that the scope of the definition of “issuer” shall be limited to:legal entities whose shares are traded in stock exchanges or on organized markets, or legal entities that have made an application for their shares to be traded in stock exchanges or on organized markets. shares and depositary receipts representing shares which are traded on stock exchanges or organized markets, or monitored in dematerialized form in the Central Registry Agency (MKK), and warrants, investment institution certificates and option and forward agreements based on the shares.
With this definition, issuers of capital market instruments other than shares and issuers of shares which are publicly offered but not traded in the stock exchange or not applied to be traded in the stock exchange have been left out of the scope of the definition.
Furthermore, according to the Decision, the scope of the definition of “capital market instrument” shall be limited to:
Therefore, with the Decision, the practices regarding the instruments other than the instruments mentioned above shall be considered beyond the concept of “market abuse action”.
CMB has issued the Communiqué II-15.2 regarding Special Events in relation to the Companies the Shares of which are not Traded on Borsa Istanbul (published in the Official Gazette dated January 23, 2014 and numbered 28891). Regulation regarding Amendment of the Istanbul Stock Exchange Quotation Regulation (“Regulation”) (published in the Official Gazette dated March 29, 2014 and numbered 28956) entered into force in order to make small-scale amendments on the Borsa Istanbul Quotation Regulation.
Under the scope of the harmonization with EU legislation, Investor Compensation Center (YTM) has been established within the frame of the conditions set forth in the CML, in place of Investors’ Protection Fund covered in the previous Capital Markets Law (Law No. 2499). For this purpose, Regulation on Procedures and Principles regarding Compensation of the Investors and Gradual Liquidation (published in the Official Gazette dated March 29, 2014 and numbered 28956) (“Regulation”) has been issued by the CMB.
In order to the investors to be compensated in an efficient manner, the Regulation builds a secure system by providing a prepayment stage for the investment entities which enables compensation before the gradual liquidation process. Accordingly, a decision regarding compensation could be taken by the CMB in three months with regards to the related investment entity, the financial status of which has been weakened, and compensation process could be commenced.
CMB has issued the Communiqué II-27.1 on Right to Squeeze-Out and Right to Sell (“Communiqué”) (published in the Official Gazette dated January 2, 2014 and numbered 28870). With the Communiqué, procedures and principles regarding controlling shareholders’ right to squeeze-out and other shareholders’ right to sell their shares to the controlling shareholder in public companies are determined for the first time. Pursuant to the Communiqué; a squeeze-out right arises in the event that controlling shareholder holds the 95% of the total voting rights in the company. In such case, minority shareholders shall have a right to sell their shares.
CMB has issued the Communiqué III-52.4 on Venture Capital Investment Funds (“Communiqué”) (published in the Official Gazette dated January 2, 2014 and numbered 28870) which covers provisions on incorporation and activities of venture capital investment funds and sale of units of such funds to qualified investors. With the Communiqué, a structure which is compatible with successful international practices has been introduced to Turkish legislation.
Venture capital investment funds could be founded by portfolio management companies and venture capital portfolio management companies, and units of venture capital investment funds may be sold to the qualified investors. At least 80% of the total value of venture capital investment funds shall consist of venture capital investments. Venture capital investment is allowed to be conducted through different methods such as direct or indirect shareholding, mezzanine financing or purchase of debt instruments issued by venture capital firms.
CMB has issued the Communiqué III-52.3 regarding Real Estate Investment Funds (“Communiqué”) (published in the Official Gazette dated January 3, 2014 and numbered 28871). With the Communiqué, real estate investment funds have gained a legal background for the first time. The Communiqué regulates the principles regarding fund’s foundation, activities and sale to the qualified investors. Real estate investment funds are mostly founded aiming at local or global institutional investors and they provide opportunity for securitization of the real estates, provide liquidity for large-scaled real estates and bring together the investors and real estate owners.
Real estate investment funds shall be established by regular or real estate portfolio management companies and units of real estate investment funds may be sold to the qualified investors and at least 80% of the total value of real estate investment funds shall consist of real estate investments.