Drafting and enactment of a new Capital Market Law which would address the needs of Turkish Capital Markets and which would be in compliance with EU Directives has long been in the agenda of the capital market governors. However, as the drafting and codification of a completely new law is a time consuming process, it was preferred to make limited amendments to the currently applicable capital markets law (the "CML") with a view to meet the urgent needs of Turkish Capital Markets.
Below is a brief highlight of the notable aspects of the recent amendments reflected into the CML:
- Leveraged trading of foreign exchange, commodities, precious metals or other assets to be determined by the Capital Markets Board of Turkey (the "CMB"), intermediation to such type of leveraged trading and other services provided in connection with those transactions are defined as capital market activities. The new definition includes highly popular leveraged foreign exchange and commodities trading under the supervision and surveillance of the CMB and provides a legal basis for the sub-regulations to be issued in the upcoming period.
- Injunctions, seizures and any other similar administrative and judicial precautions with respect to dematerialized securities shall be executed by the members (i.e. banks and brokerage firms) of the Central Registry Agency by opening sub-accounts linked with investor accounts. This Amendment is a clear expression of the current practice and is expected to abolish the legal uncertainties raised in connection with the dematerialization of government bonds.
- The Amendment sets the date 31.12.2012 as a deadline for the delivery of stock certificates representing shares of ISE traded companies and provides that the title to those shares will be transferred to the relevant ISE traded companies automatically in case those certificates are not delivered to the intermediaries appointed by the same. The Amendment also requires ISE traded companies to dispose those shares within a period of three months as from the above mentioned deadline. This new provision is inserted into the CML with the intention to finalize the dematerialization process of shares of ISE traded companies. In this respect, investors who have stock certificates of ISE traded companies and who would like to protect their ownership rights over the shares represented by those certificates shall be careful not to miss the above mentioned deadline.
- As per the Amendment, headquarters of the CMB shall be moved to İstanbul within a period of two years, which if necessary, can be extended by the Council of Ministers. The relocation of the CMB headquarters is considered as part of a government sponsored project which is expected to position Istanbul as a regional financial center. In addition to the above, the Amendment includes certain other provisions addressing the organizational and budgetary needs of the CMB.
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