Regulation on Establishment and Activities of Asset Management Companies and Receivables to be Acquired Is Published.
Regulation on Establishment and Activities of Asset Management Companies and Receivables to be Acquired (‘Regulation’) has been published in the Official Gazette numbered 31541 and dated 14 July 2021, and entered into force. Along with this Regulation, the Regulation on the Establishment and Operational Principles of Asset Management Companies which was published in the Official Gazette numbered 26333 and dated 01.11.2006 (‘Former Regulation’) has been abolished.
Requirements of Incorporation of Asset Management Companies
The conditions included in the Former Regulation of establishing Asset Management Companies as joint stock companies only, of the issuance of all stock certificates as registered share certificates and in cash, of having the phrase “Asset Management Company” in the trade name are also preserved with the new Regulation as the requirements of incorporation of Asset Management Companies. In addition to these, the condition of having paid-in capital, free of all kinds of collusion and in cash, with an amount of no less than 20 million Turkish Liras is increased to an amount no less than 50 million Turkish Liras with the adaptation of new Regulation.
Possibility of Transferring Performing Loans
With the Regulation, it has been made possible to transfer performing loans as well as non-performing loans of the originators subject to the supervision and surveillance of the Banking Regulation and Supervision Agency (‘The Institution’, ‘BRSA’) to asset management companies.
Limitation on Communication with the Debtor and Third Party
As per the Regulation, it has been prohibited to communicate with the debtor and other persons related to the debt or stated to be authorized on public holidays, Sundays and except between 09:00 and 20:00 in other days.
In addition, within the framework of the Regulation, in cases where the debtor cannot be reached, the number of calls shall be limited to three per day, including calls made from different phone lines, and the number of messages shall be limited to one. After the debtor is reached and the matter is conveyed, a minimum of five business days must pass until the next call, if the debtor does not have a recorded consent. Unless the asset management company has concrete documents showing that the person is indebted, the asset management companies shall not be able to call the relevant person who does not accept his/her debt, refuse any reconciliation and express clearly that he/she does not want to be called.
The regulation also includes essential rules regarding communication with third parties. Accordingly, asset management companies shall not give any information to third parties about the debt and shall not contact except those who want to pay the debt, undertake the debt, participate in the debt or contract, by communicating directly with the company through the contact information provided by the asset management companies to the debtor, or by the debtor’s and his/her approval at the time of communication with the debtor.
Furthermore, asset management companies are also obliged to make the relevant number passive in their systems, if it is determined that the phone number with which the debtor is contacted is used by third parties.
New corporate governance rules havw also been adopted in the Regulation. The rule that the number of members of the board of directors cannot be less than five is reduced to three, and some changes are made in the selection criteria of the members of the board of directors, general manager and assistant general managers.
Obligation to Tender in the Transfer of Receivables
Originators subject to the audit and supervision of the Agency cannot transfer their receivables to asset management companies by a method other than tender procedure, except for receivables involving only an individual risk group.
Field of Activity
As per the provision of the Regulation, asset management companies shall be able to take over, transfer, and collect the receivables and other assets of the originators operating outside the insurance field and the receivables of the originators operating insurance activities only arising from the credit insurance service. Companies shall be able to liquidate assets or transfer them by restructuring.
Moreover, asset management companies shall be able to operate, lease, collateralize and invest in real estate or other property, rights and assets acquired for the purpose of collecting receivables.
In addition, they shall be able to provide mediation, support and consultancy services in the collection, restructuring or transfer of their receivables and other assets arising from the main fields of activity of the originators.
Pursuant to the Regulation, the ability of asset management companies to obtain shares other than the participation shares they have to get due to their receivables is limited to the purpose of carrying out their activities, and has been made subject to the permission of the BRSA.
Limitation on Loans to Borrowers
Provided that the total financing amount is under three times of the equity capital of the asset management company, additional financing may be provided to their debtors to collect their receivables. In other words, it is stipulated by the new Regulation that the total amount of financing that asset management companies can provide to the debtors cannot exceed three times the company’s equity.
Mergers, Demergers, Liquidation and Branch Opening
It is stated in the Regulation that the merger, demerger, transfer and liquidation of the asset management company are subject to general provisions, provided that the permission of the Banking Supervisory and Regulatory Board (‘Board’) is obtained, and detailed regulations regarding the said processes are included.
As in the above transactions, permission from the BRSA shall be required to open a branch. The asset management company that will apply to the BRSA for a branch opening permit must have a paid-in capital of one million Turkish Liras for each branch.
The ratio of the equity of the asset management company to its total assets is required to be fixed and maintained at a minimum of three percent.
A provisional article has been added to the Regulation in order to establish compliance with the new terms and regulations introduced with the Regulation. According to the transitional provision added to the regulation, asset management companies are required to adapt their status within one year to the condition of having-paid capital, free of all kinds of collusion and in cash, with an amount of no less than fifty million Turkish Liras. This amount shall be applied as thirty million Turkish Liras for those who have applied for incorporation or certificate of authorization to the Institution before the publication date of this Regulation, and the said asset management companies shall have to adapt their status to this condition within one year following the obtaining of the certification of authorization. Otherwise, the Board shall revoke the certification of authorization of asset management companies that cannot meet the aforementioned obligation.
In terms of other provisions of the Regulation, asset management companies operating as of the date of entry into force of the Regulation are required to adapt their status to the other provisions of the Regulation within six months.