Capital Markets Board of Turkey ("CMB") decided to partially end the ban on short sales transactions1 taking place in the equity market of Istanbul Stock Exchange (Borsa Istanbul) that had been in place since October 2019. This has been announced in CMB's Weekly Bulletin No. 2020/40 on 30 June 2020 ("Board Decision").
Regulator made this decision initially for BIST 30 Index stocks in consideration of the fact that clearing house of Turkey, Istanbul Takas ve Saklama Bankası A.Ş., has activated a new automation system to facilitate initially the stocks of BIST-30 Index to be subject to lending transactions carried out by brokerage firms, through "Automatic Securities Lending Order Screens" recently developed by Takasbank.
With the Board Decision;
- The short selling ban for the top 30 shares on Istanbul Stock Exchange (BIST 30 Index) has been lifted as of 1 July 2020,
- The short selling ban for the stocks other than BIST 30 Index of ISE still remains,
- The investors and investment institutions will be informed that it is mandatory to click the short sell button for the positions that are opened with respect to the sale of capital market instruments that are not actually owned and closed within the same trading day in accordance with Articles 24 and 28 of Communiqué on Margin Trading, Short Sales and Lending and Borrowing of Securities (Serial V, No: 65).
The ending of this restrictive measure is expected to have a positive impact on professional investors and also, increase the foreign investor interest in bank stocks.
Footnotes
1 The short sale transactions in the equity market of Turkey were banned respectively on 16.10.2019, 28.02.2020 and 02.03.2020. You may find our publication on this matter through https://www.sadik-sadik.com/legal-alert-ban-short-sale-transactions/.
Originally published 10 July, 2020
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