Amendments in October

• Corporate Governance Communiqué (II-27.1) was amended to include sustainability principles for listed companies. Adherence to such sustainability principles is voluntary. That being said, listed companies are required to disclose whether they comply with the sustainability principles in their yearly activity reports. If not, a detailed explanation including effects of such non-compliance on environmental and social risk management is required.
• Central Bank of Republic of Turkey extended the scope of authorization granted to the Central Securities Depository with respect to its activities as service provider for electronic board meetings. The Central Securities Depository can now apply its electronic board of director meeting system to other meetings in addition to meetings of committees within the board of directors.
• Financial Reporting Principles of Investment Funds (II-14.2) was amended. Financial reporting principles and public disclosure requirements of investments funds were updated. Another amendment freed real estate investment funds from the obligation of preparing a valuation report unless the investors request such report. At the same time, the Capital Markets Board lifted the exemption for public disclosure of financial reports for real estate investment funds and venture capital funds. Real estate investment and venture capital funds are now obligated to publicly disclose and announce the financial reports and make necessary notifications.
• With amendments in Communiqué on Principles Governing Real Estate Investment Companies (III-48.1) some requirements imposed upon Real Estate Investment Companies (“REICs”) were eased. Some of these regulations are as follows:
  • REICs may now pay more than 3% commission and expenses excluding taxes for sales made to foreigners. Prior to the amendment, this was limited to 3% in all transactions.
  • REICs may now lend money to their wholly-owned subsidiaries.
  • REICs may now pledge the assets in their portfolio for any financing benefiting them.
  • REICs may now also pledge the assets in their portfolio in benefit of their wholly-owned subsidiaries.
• Amendments were made in the Communiqué on Principles Governing Venture Capital Investment Funds (III-52.4). Some of these amendments are as follows: 
  • Venture company definition has been amended to include venture companies established abroad if 80% of their assets comprise of companies or affiliates established in Turkey. 
  • Real estate and venture capital portfolio management companies are now within the scope of this communiqué. 
  • Venture capital investment funds may now invest in gold and other precious metals and stones and capital markets instruments based on these. 
  • Venture capital investment funds must now have a page on Public Disclosure Platform and disclose certain documents to the public via this platform.

• Regulation on the Activities, Operation and Auditing Principles of Data Depository Institution (“Data Institution Communiqué”) was amended. Transaction prohibitions for managers and employees of the Data Depository Institution (Veri Depolama Kuruluşu) and their relatives were amended. 
• Borsa Istanbul (“BIST”) renewed the list of required documents for public offerings. The required documentation and instructions were simplified to ease public offerings of both equity and debt instruments.
• Capital Markets Board published an announcement as a reminder that public companies must maintain and update lists of people having insider information, otherwise administrative fines will be imposed.

Amendments in November

• BIST approved the decision for establishment of a swap market separate for precious metals. The Swap Market Directive and Swap Market Procedure were amended accordingly.
• Law on Restructuring of Certain Receivables and Amendments to Certain Laws (Law No. 7256) was enacted. Amendments include a two point discounted corporate tax rate applicable for five years for IPOs with an initial offering of at least 20% of shares and a temporary wealth amnesty for certain assets kept abroad until 30 June 2021. 
• Central Bank of Republic of Turkey allowed Istanbul Settlement and Custody Bank (Takasbank) to engage in cash swap activities and security management (teminat yönetimi) services for transactions in Electric Futures Market and Organized Renewable Energy Sources Guarantee Market.
• BIST announced the list of companies included in the sustainability index effective from 1 December 2020.

Amendments in December

• BIST announced that for exchange traded investment funds, the ongoing practice of exemption from fees concerning exchange traded investment funds for order cancellation, amount decreases and price deterioration and exchange fee (borsa payı) was prolonged until 31 December 2021.
• Dollar/Ounce silver futures contracts will trade on BIST Futures and Options Market starting from 15 January 2021. BIST Futures and Options Procedure will be updated accordingly.
• BIST announced the list of companies included in BIST Star, BIST Main and BIST Sub effective as of 1 January 2021. Market classification follows the amendments made in BIST market structure in October. You may find a detailed client alert we prepared on the new market structure of the equity market, trading principles, transfers between markets and listing criteria at here.
• Temporary tax rates for income and earnings from bonds, lease certificates and investment fund certificates were announced.
• With an amendment in the Communiqué on Principles of Investment Funds (II-52.1), rules governing assets to be included in a fund’s portfolio was updated. In this regard, exemptions from fund total investment ratios were granted for mortgage based securities and asset backed securities based on consumer credits.
• CMB announced a principle decision regulating admissibility criteria for applications to convert joint stock companies into venture capital investment companies and applications for the public offering/sales to qualified investors of the same.
• With another principle decision, CMB lifted some restrictions imposed on FX funds in June 2020. Under the lifted restrictions foreign currency debt instruments and debt certificates issued abroad by the Ministry of Treasury and Finance and domestic issuers could only be included in the portfolio of FX funds at the time of their first issuance and cannot exceed 30% of the total fund value. Secondary issuances and purchases in secondary markets overseas could not be included in the portfolio of these funds. 
• With yet another principle decision, CMB announced that if there is any suspicion of an attempt to circumvent the requirement of submitting an information form to CMB for approval before selling shares in listed companies above certain thresholds, shares owned by people committing suspicious acts will be transformed into non-tradeable shares. Only after CMB’s approval of the information form and its disclosure will the shares be converted back to tradeable shares.
• New Squeeze Out and Sell-out Rights Communiqué (II-27.3) was published. You may find a detailed client alert we prepared on the new communique at here.
• Communiqué on Repo and Reverse Repo Transactions to be Carried Out by Intermediary Institutions (II-45.2) was amended. With the amendments list of capital markets instruments that can be subject to repo and reverse repo transactions was extended. Furthermore, the valuation and margin ratios for repo and reverse repo transactions were updated. Lastly, a transaction ceiling was enacted for some financial instruments for repo and reverse repo transactions.
• Regulation Governing the Principle and Procedure on the Activities, Workings and Oversight of the Commodity Exchange was amended. With the amendment, the provision regulating the establishment of a settlement centre under the exchange was postponed to 31 December 2022.