On 14 February 2023, the Capital Markets Board ("CMB" or "Board") issued new regulations in the form of precedents on (1) the share repurchase program process and (2) the thresholds for the share sale information form of publicly traded companies. These regulations will remain in force until a new regulation on the subject is introduced by the Board. In addition, on 16 February 2024, financial reporting deadlines for companies affected by the earthquake were extended. We summarized the amendments concerning public companies below for you:

Regulations on the share repurchase

CMB, with its precedent numbered 9/177, reiterated that a share repurchase program of a public company may be initiated with a resolution of the board of directors of the company without requiring a general assembly resolution. This is in line with its previous announcements dated 21.07.2016 and 25.07.2016 and its resolutions numbered 34/959 (dated 23.06.2022) and 21/1023 (dated 21.08.2015) ("Announcements and Precedents").

In parallel with the previous regulations in the Announcements and Precedents, it was reminded that the following should be included in such a board of directors' resolution and the board of directors' resolution should be announced through a material event disclosure:

• Purpose of the repurchase
• Maximum foreseen duration of the repurchase program
• Maximum number of shares to be purchased
• Maximum amount of funds to be used

The resolution of the board of directors regarding the share repurchase program must be presented to the shareholders at the first general assembly meeting. 

In addition, subsidiaries of publicly traded companies may also continue their share repurchase programs without the need for a separate decision by the board of directors. 

To encourage share repurchases, public disclosure obligations have been softened and certain restrictions on the retention and redemption of repurchased shares have been repealed.

Previous Announcements and Precedents regulating the same issues mentioned in the new precedent have been abrogated and the subject matter of these Announcements and Precedents were consolidated under this new single precedent.

Regulations on share sale information form

With the Resolution No. 9/178, the Board reduced the threshold for the obligation to prepare an information form for share sales by shareholders who directly hold more than twenty percent of the share capital of a public company, either alone or together with persons acting in concert, or who hold privileged shares that entitle them to elect at least one of the members of the board of directors or to nominate at least one of the members of the board of directors at the general assembly meeting, from ten percent to three percent. Prior to the amendment, for share sales exceeding ten percent of the paid-in capital of publicly traded companies in any twelve-month period, the shareholders were required to prepare a share sale information form, the principles of which were determined by the Board, and submit this form to the Board for approval prior to the sale. 

With the Amendment, the said ratio will be applied as three percent, and shareholders will be required to prepare a share sale information form and apply for the Board's approval for share sales exceeding three percent of the paid-in capital of the company in any twelve-month period. 

In addition, as of 14 February 2023, if the sum of the sales made by shareholders within the past twelve-month period and the sales to be made by shareholders following this date exceed ten percent of the company's paid-in capital, regardless of the three percent threshold mentioned above, a share sales information form, as defined by the Board, must be prepared, and submitted to the Board for approval prior to such share sales.

A related client alert we prepared in 2020, following the introduction of the obligation to prepare a share sale information form is available here.

Financial reporting obligations of companies affected by the earthquake

With its decision numbered 10/195 (“Decision”), CMB extended financial reporting obligation deadlines for companies with headquarters in Adana, Adıyaman, Diyarbakır, Gaziantep, Hatay, Kahramanmaraş, Kilis, Malatya, Osmaniye ve Şanlıurfa (“Earthquake Zone”) and any other provinces that may be declared Earthquake Zones in the future. 

The Decision introduces the following:

• Businesses with headquarters in the Earthquake Zone whose capital market instruments are traded on an exchange and/or other organized markets and who have not yet made 2022 year end financials public, may make this declaration until the deadline for the Q1 2023 financials.
• Businesses with headquarters in the Earthquake Zone whose capital market instruments are not traded on any exchange nor on any other organized markets and who have not yet made 2022 year end financials public, may make this declaration until the end of the following month of the official deadline.
• Investment funds (including real estate, venture capital and exchange traded investment funds) are granted time until 30.04.2023 for the declaration of independently audited financial reports of 2022. Retirement investment funds are granted time until 30.04.2023 for the declaration of their yearly reports of 2022. 

In addition, the Decision reminds that other business subject to capital markets regulations may request additional time from the Board if they cannot send financial reports on time due to the earthquake.