• It is the spirit and not the form of law that keeps justice alive.
    Earl Warren

RECENT AMENDMENTS IN LEGISLATION ON ASSET MANAGEMENT COMPANIES

Summary

The Banking Regulation and Supervision Agency (“BRSA”) introduced new principles applicable to the asset management companies with the new regulation published in the Official Gazette dated 5 March 2016 and No. 29644 amending the Regulation on Principles of Incorporation and Activities of Asset Management Companies published in the Official Gazette dated 1 November 2006 and No. 26333.

Changes

•    The definition of “Other Financial Institutions” has been expanded to cover the asset management companies as well. With this expansion, the asset management companies will be entitled to provide consultancy and intermediary services for the restructuring of the receivables and other assets of the other asset management companies.
•    The asset management companies shall have a minimum of twenty million Turkish Liras of paid-up capital.
•    As the foreign investors had been experiencing problems during the submission of the required documents for the incorporation of an asset management company in Turkey, the BRSA has facilitated the strict rule for the required documents in a manner similar to the requirements for the establishment of Factoring, Financial Leasing and Financing Companies. It is clearly stated in the new regulation that, “if the documents that are required from foreign nationals cannot be obtained due to the lack of any authority or system preserving the documents requested in their own countries, it is obligatory to inform the BRSA about this matter with a document obtained from competent authorities of the related country. If the BRSA could not be informed about the matter stated above with a document obtained from competent authorities, natural persons and legal entities shall make a written statement stating that such authentication cannot be made”.
•    Despite the existing BRSA approval process for the change of 50% percent of shareholding structure of the asset management companies, the definition of “control” has also been added to the scope of the Regulation on Principles of Incorporation and Activities of Asset Management Companies by referring to the Banking Law No.5411 and it is stated in the new regulation that the change of control in the asset management company will be subject to the approval of the BRSA.
•    The notification period for the appointment of board members and general managers have been increased from seven days to one month.
•    The asset management companies shall establish an internal control system and information technology system.
•    The asset management companies shall be entitled to provide intermediary, support and consultancy services for the collection of receivables of insurance companies who are providing credit insurance services and to invest on securities provided that the required consents are obtained from the Capital Markets Board.

Effective Date

The new regulation is now effective since the date of its publication in the Official Gazette.
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