We summarized the important regulatory changes affecting Turkish capital markets in Q3 2023 for you.

Amendments in July

• Amendments in Mandatory Reserves Communiqué

Pursuant to Article 10/C of the Mandatory Reserves Communiqué, banks with a share of Turkish Lira deposits/participation funds below 60 percent were envisaged to add 5 points to their foreign currency reserve requirement ratio liabilities for all maturities. With the amendment to the relevant article, this ratio will be applied as 57 percent. In addition, the reserve requirement ratio for Turkish Lira deposits/participation funds was set as 15 percent for accounts that are provided with exchange rate/price protection support by the Central Bank of the Republic of Turkey ("Central Bank") for Turkish Lira liabilities.

• Amendment to the General Regulation on the Establishment and Operation Principles of Central Clearing Institutions

Pursuant to the amendments made by the Capital Markets Board ("the Board" or the "CMB") to the General Regulation on the Establishment and Operation Principles of Central Clearing Institutions, it was stipulated that the services related to internal control, internal audit, compliance, clearing, custody and central counterparty processes are subject to the Board's permission in the procurement of outsourced services by the Central Clearing Institution; and in relation to the services to be outsourced for the necessary improvements to be made regarding the information systems, it was stipulated that a notification must be made to the Board within ten business days following the execution date of the relevant contract regarding the scope and nature of the service.

Amendments in August

• Amendments to Equity Market Procedure and Derivatives Market Procedure

Borsa Istanbul A.Ş. ("BIST" or "Borsa Istanbul") made amendments to the BIST Equity Market Procedure regarding the updates on the impact on BISTECH users within the scope of the transition to the new technological infrastructure upgrade. In addition, due to the transition to the BISTECH system, Borsa Istanbul also updated the Derivatives Market Procedure. These changes were announced on the Borsa Istanbul website.

• Amendments to BIST Market Cap Weighted Stock Indices Rule Sets

Borsa Istanbul amended the BIST Market Cap Weighted Stock Indices Rule Sets by evaluating the requests from market participants and in line with the developments in the markets and changes arising from local and international legislations. These amendments were announced on the Borsa Istanbul website.

• Regulations on Import of Unprocessed Gold

Pursuant to the relevant articles of (i) the Decree No. 32 on the Protection of the Value of Turkish Currency, (ii) the Regulation on the Operating Principles of Precious Metals Exchange Intermediary Institutions and the Establishment of Precious Metals Intermediary Institutions, and (iii) the Communiqué on the Decree No. 32 on the Protection of the Value of Turkish Currency, Borsa Istanbul announced that monthly quotas will be applied to precious metals intermediary institutions on a member basis, effective as of 7 August 2023 and until further decision of the Ministry of Treasury and Finance.

• Shares in the BIST Buyback Index

Borsa Istanbul announced the shares that will be included in the BIST Buyback Index as of 15 August 2023 on its website.

• Amendments in Mandatory Reserves Communiqué

Pursuant to the amendments to the Mandatory Reserves Communiqué, the reserve requirement ratio for foreign currency liabilities for deposits/participation funds was set as (i) 29 percent for on demand, with notice and maturities up to 1 month, (ii) 25 percent for maturities up to 3 months, 6 months and 1 year, and (iii) 19 percent for maturities of 1 year and more than 1 year. In addition, a discount, the procedures and principles of which will be determined by the Central Bank, will be applied to the total reserve requirement amount applicable for Turkish Lira and foreign currency items subject to reserve requirements.

• Decision on Real Estate Valuation Minimum Price Tariff and Implementation Principles

The Board updated the "2023 Real Estate Valuation Minimum Price Tariff" effective as of 29 August 2023 and the new tariff was published in the Official Gazette. It was decided that the “Principles of Minimum Price Application for Real Estate Valuation" will be continued to apply as is.

Amendments in September

• Changes in the Shares in the BIST Buyback Index

Borsa Istanbul announced the changes in the shares to be included in the BIST Buyback Index for September 2023 on its website.

• Amendments to the Mandatory Reserves Communiqué

As per the amendments to the Mandatory Reserves Communiqué, the reserve requirement ratio for Turkish Lira liabilities for deposits/participation funds was set as (i) 25 percent for accounts with maturities up to 6 months (including 6 months) for which the Central Bank provides exchange rate/price protection support, and (ii) 5 percent for accounts with maturities up to 1 year and accounts with maturities of 1 year or longer for which the Central Bank provides exchange rate/price protection support.

• Changes in the Market Determination Criteria for the Equity Market and Equity Market Categorization in Markets

Borsa Istanbul amended the criteria for determining the markets for the shares traded in the Equity Market, effective as of 2 October 2023. In this context, the market value for the Star Market was increased from TRY 1 billion to TRY 3 billion and the market value of the shares in actual circulation was increased from TRY 150 million to TRY 450 million; for the Main Market, the market value was increased from TRY 150 million to TRY 450 million and the market value of the shares in actual circulation was increased from TRY 60 million to TRY 180 million. As a result of the evaluation studies regarding the distribution of shares among markets, the shares that will be traded on the Star Market, Main Market and Sub-Market as of 2 October 2023 and the updated Equity Market Directive within the scope of the relevant changes were announced on Borsa Istanbul's website.

• Periodic Changes to the BIST Equity Indices

BIST announced the changes in BIST 100, BIST 50, BIST 30, BIST Liquid Banks, BIST Liquid 10 Ex Banks and BIST Sustainability and BIST Sustainability 25 Indices for the last quarter of 2023 on its website.

• Periodic Changes to the BIST-KYD OSBA Eurobond Indices

BIST completed the studies on the Eurobonds regarding the BIST-KYD Fund Eurobond Indices for the last quarter of the year 2023 and announced the lists of funds to be included in the indices on its website.

• Periodic Changes to BIST-KYD Eurobond Participation Fund Indices

BIST completed the studies on Eurobonds regarding BIST-KYD Fund Eurobond Indices for the last quarter of the year 2023 and announced the lists of included/excluded funds and lists of constituents in BIST-KYD Fixed Income Fund Index and BIST-KYD Equity Fund Index on its website.

• Periodic Changes to BIST Participation Indices

BIST announced on its website the changes in the BIST Participation All, BIST Participation 100, BIST Participation 50, BIST Participation 30, BIST Participation Sustainability and BIST Participation Dividend indices for the last quarter of 2023.

• Board Decision on Corporate Governance Communiqué numbered II-17.1

With its resolution dated 28 September 2023 and numbered 57/1201, the Board resolved that companies that are obliged to establish an Investor Relations Department pursuant to the Corporate Governance Communiqué numbered II-17.1 (i) to review all personnel registered in the Licensing and Registry System and make the necessary notifications in case of changes, (ii) to notify the personnel subject to the registry who have not yet been notified, (iii) to ensure that the information provided on the Public Disclosure Platform is up-to-date.

• Venture Capital Market Established

As per the announcement dated 29 September 2023, BIST announced that the Venture Capital Market was established to enable companies that wish to obtain the financing they need through equity by issuing shares through capital increases only to qualified and institutional investors and to enable such shares to be traded on the BIST Equity Market, and that the necessary amendments were made to the Listing Directive and Equity Market Directive in accordance with the Communiqué. Pursuant to the amendments in the BIST Listing Directive, shares that are sold to qualified investors will be traded on the VCM. In this context, the Listing Directive (i) states that non-publicly traded companies that issue their shares through capital increase to qualified investors without public offering may apply for listing of their shares to be traded on the VCM and (ii) determines the listing conditions. For more information about this subject, you may refer to our previously published detailed client alert here.