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


The Capital Markets Board of Turkey (“CMB”) has recently announced various amendments to capital markets legislation and has also issued a new regulation in relation to the Investor Compensation Center.
Please note that the explanations in this client alert include only a brief summary of the amendments and aim to shed light on certain vital issues which might be to your benefit. Please do not hesitate to contact us should you have further questions on the matter and in case of any concrete cases related to the below amendments; concerning which you may need further assistance.

1. Communiqué VII-128.1 on Shares (“Communiqué on Shares”)

As per Article 8 of the Communiqué II-16.1 on the Principles Pertaining to the Removal of Corporations from the scope of the Law and the Obligation to Trade Shares on the Exchange (“Communiqué on Delisting”), those corporations, the audited financial statements for the last two financial years of which show that (i) total assets are below TL 10 million, or (ii) both the net sales revenue and the total income excluding the net sales revenue are less then TL 5 million, or (iii) the registered capital or legal reserves are depleted, can apply to the CMB for delisting. 

According to the recent amendments introduced with respect to the Communiqué on Shares, those corporations (excluding investment trusts) planning to be involved in an IPO transaction or the shares of which will be traded on the stock exchange for the first time must not fall within the scope of the above-stated criteria on delisting. However, such restrictions are not applicable to public administrations, special budgeted administrations, entities within the context of privatization and entities with public participation.

Moreover, pursuant to these recent amendments, the cash capital subscription obligation of shareholders arising from a capital increase of a publicly-held company cannot be completed by way of setting off the non-cash obligations arising from the asset transfer to the company.

2. Communiqué II-23.1 on Material Transactions and Exit Rights (“Communiqué on Material Transactions”)

In accordance with the amendments made to the Communiqué on Shares the setting off the non-cash obligations arising from the asset transfer to the company with the capital increase obligation of a shareholder of a publicly-held company is no longer listed as a material transaction within the context of the Communiqué on Material Transactions.

Furthermore, in order to protect the rights of investors in the event of a merger transaction where a non-public company acquires a publicly-held company, it is now obligatory for the controlling shareholder of such non-public company and any parties acting together with the controlling shareholder to make a mandatory tender offer to the other shareholders of the company.

3. Communiqué II.26.1 on Tender Offers (“Communiqué on Tender Offers”)

Following the recent amendments made to the Communiqué on Tender Offers, a new clause has been added to the circumstances where no mandatory tender offer obligation rises. Accordingly, in case of a share acquisition of a controlling shareholder in a publicly-held company, the acquirer is not obliged to make a tender offer provided that it holds 50% or less of the company’s voting rights and on the condition that such acquirer, due to a written contractual agreement, shares the management control of the company with the controlling shareholder either in the same ratio or in a ratio less then the ratio held by the controlling shareholder.

The other amendments introduced to the Communiqué on Tender Offers are related to the provisions for determining the tender offer prices and also changes in the scope and price of voluntary tender offers.

4. Communiqué II-23.2 on Mergers and Acquisitions (“Communiqué on Mergers and Acquisitions”)

Following the amendments made to the Communiqué on Mergers and Acquisitions, non-public companies are now required to satisfy the criteria set forth in the Communiqué on Shares  for becoming a listed company if such non-public company acquires a publicly-held company as a result of a merger transaction.
5. Regulation on the Investor Compensation Center

The new Regulation on the Investor Compensation Center (“New Regulation”) has recently been published in the Official Gazette dated 27.02.2015 and numbered 29280 by repealing the old Regulation on the Investor Compensation Center which was published in the Official Gazette dated 06.06.2013 and numbered 28669.

The New Regulation introduced provisions with respect to the statute of limitations on deposits and receivables.

Accordingly, with respect to the account holders, those deposits and receivables (including interests rates, profits and the other related incomes) arising from investment services and activities shall become time barred after 10 years following the date of the last request, transaction or written instruction of the relevant account holder. On the other hand, with respect to the investment funds and open-ended investment companies, such statute of limitations will be applied following the liquidation date of the relevant investment fund or the open-ended investment company. Unless such deposits and receivables are collected within 10 years as specified (thus become time barred), these shall then be registered as revenue for the Investor Compensation Center.

6. Amendments on the Capital Markets Law No. 6362 (“CML”)

Omnibus Bill No. 6637, which was published in the Official Gazette dated 07.04.2015 and numbered 29319, has introduced an amendment to Article 107 of the CML in relation to the criteria for establishing the existence of a manipulation crime/ the manipulation crime. Accordingly, “the benefit” will be the criteria in determining whether the relevant manipulation crime was committed with the aim of affecting the price and value of capital markets instruments or investment decisions of the investors. In other words, it is necessary to determine whether the one committing the relevant manipulation crime has any benefit from and/or interest in such manipulation.
Practice Areas:
#Capital Markets Law
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