Approval Procedure Introduced by the Amendments in Share Communique (VII-128.1d)

The Communique Amending the Share Communiqué (VII-128.1d) (“Amendment Communiqué”) was published on the Official Gazette dated 24 July 2020 and came into force the same day. Amendment Communique sets out that prior to selling shares in listed companies above certain thresholds; an information form must be drafted and submitted to the Capital Markets Board of Turkey (“CMB”) for approval. You may find below a summary of these new requirements.

Obligation to Draft an Information Form

Article 27 of the Share Communique numbered VII-128.1 (“Share Communiqué”) imposing an obligation to draft an information form to shareholders of listed companies was abolished on 13 February 2018. With the Amendment Communique, this article was brought back with amendments.

Under the new article;

Prior to selling shares in a listed company in an amount exceeding ten percent of the relevant listed company’s share capital within a twelve month period,

1. If such sale will be carried out by shareholders who own more than twenty percent of the relevant company’s share capital themselves or with parties they are acting together or
2. by shareholders owning privileged shares granting the right to nominate or appoint at least one member of the Board of Directors during the General Assembly meetings,

an information form for sale of shares (the template will be determined by CMB) must be prepared and submitted to CMB’s approval.

Companies, whose management control is owned by the natural and/or legal person shareholders and natural and/or legal persons having management control of the legal person shareholders will be deemed as parties acting together.

Obligation to Disclose the Information Form to Public and Sales Restrictions

The application to the CMB for obtaining approval to the information form for sale of shares must be disclosed by the relevant shareholder on Public Disclosure Platform (“PDP”) with a special event disclosure on the first business day following the application date at the latest. The approved information form for sale of shares must be announced on PDP within five business days following the approval at the latest.

If the sale of shares approved under the information form will be made through a stock exchange, the sale transaction may begin after three business days from the public disclosure of the information form on PDP at the earliest.

Total nominal value of shares to be sold in a single day under the information form for sale of shares may not exceed ten percent of the total nominal value declared in the information form. After sales transactions declared under the information form are concluded, the relevant shareholder will make daily special event disclosures regarding such transactions. 

Furthermore, for unlisted shares exceeding ten percent of the share capital within a 12 month period, intended to be converted into listed shares, the approved information form must be disclosed on PDP before the relevant application to Central Securities Depository for converting these shares. 

Amendment Communiqué also warns that shareholders shall not try to circumvent this obligation by entering into pledges, transfers or other similar arrangements. Otherwise CMB may apply sanctions under the capital markets legislation.

Exempt Transactions and Institutions 

Amendment Communiqué states that wholesale transactions, sales made by special orders or within the scope of liquidity providing/market making transactions and second public offerings of shares of listed companies in the relevant market of the stock exchange are exempt from the obligation under Article 27 of the Share Communiqué.

Furthermore, Turkey Wealth Fund (Türkiye Varlık Fonu Yönetimi A.Ş.), its subfunds and other companies established by Turkey Wealth Fund, shares owned by Turkish Privatisation Administration (Özelleştirme İdaresi Başkanlığı), shares held ready for sale under Article 9 of the Share Communiqué and shares that were bought back from a company itself or through its subsidiaries will also be exempt from the obligation under Article 27 of the Share Communiqué.

For shares purchased for price stabilisation transactions, the obligation under Article 27 will begin after the time granted for price stabilisation transactions runs out. 

Template Form and Guides

CMB published an announcement regarding the Amendment Communique on its website the same day and published an information form template and an accompanying guide explaining how to use the template. You may access the template form and the guide (in Turkish) on: https://spk.gov.tr/Sayfa/Dosya/1316.