Disclosure Requirements - Turkey
Disclosure Category: 2
Background and Legal Basis
The disclosure requirement for shareholding in Turkey is primarily derived from the Capital Markets Law dated 30 July 1981, No. 2499 (Articles 1 and 16/A). In addition, the Capital Markets Board of Turkey (CMB), the local securities market regulator, has issued Communiqué Serial: VIII, No: 54 “Communiqué on Principles Regarding Public Disclosure of Material Events” (the “communiqué”), which outlines the circumstances and method for disclosure. This communiqué has been effective from 6 February 2009 and replaced former communiqué No: 39.
In order to comply with the legislation as mentioned above and, more generally, with applicable Turkish laws and regulations, customers entering into transactions in the Turkish market consent and are hereby deemed to consent to disclosure and to the appointment of CBL and/or its local agent as their attorney-in-fact, under power of attorney to collect from CBL such information to be disclosed as is required by the issuer, regulator or other requesting party. Customers not willing to give this consent cannot hold such securities and/or financial instruments in their account with CBL.
1. Disclosure related to tax:
In the Turkish market, local brokers and other custodians must be aware of who has been appointed as the tax agent and permanent tax representative, when applicable.
CBL, through its local agent, shall perform such disclosure of this status to local counterparties or other parties upon request from such parties, including:
- The tax ID (or, in the case of a Turkish resident individual, the Turkish national ID number) of the beneficial owner; and
- Confirmation that, in the case of beneficial owners with NRIF status (that is, Non-Resident Investment Funds holding securities purchased before 1 January 2006), CBL’s local agent acts as the permanent tax representative of the beneficial owner; and
- Confirmation that CBL’s local agent is the subcustodian bank and acts as tax agent in relation to CBL account(s) opened with the local CSD (MKK).
As long as CBL’s local agent is appointed by the beneficial owner as permanent tax representative, such agent is deemed responsible for the book-keeping of any NRIF's portfolio, tax accounting responsibilities and the preparation of the legal tax declaration, as required under Turkish law. In addition, CBL’s local agent would be entitled to contact any previous agent to obtain full details of the transactions linked to the beneficial owner under the regime applicable to securities purchased before 1 January 2006, including, among other things, tax return papers already submitted to the tax office (as relevant).
2. Disclosure in the case of repetitive trade failures
According to Borsa Istanbul (BIST) Circular 193, dated 14 January 2004, local brokers provide additional reporting to the BIST when their customers cause more than two trade failures within three consecutive months. Disclosure is made when the default amount exceeds TRY 10,000 or 5% of the investor’s net assets held with the local broker.
Obligation to report threshold crossings
Any acquisition or sale of BIST-listed equities that causes a holding to reach, exceed or fall below 5%, 10%, 15%, 20%, 25%, 33%, 50%, 67% or 95% of the total voting rights or share capital of a (Turkish or foreign) company triggers an obligation for the beneficial owner or the people acting together with the beneficial owner to disclose the transaction and change of holding.
Any acquisition or sale by investment funds (mutual funds), founded and owned directly or indirectly by the same person, that causes a holding to reach, exceed or fall below 5%, 10%, 15%, 20%, 25%, 33%, 50%, 67% or 95% of the total voting rights or share capital of a company must be disclosed by the fund's founder.
Members of the board of directors of a company or high-ranking executive officers who are also shareholders of such company must, irrespective of the voting rights held, disclose all their transactions relating to the shares of such company to the BIST (if listed) or to the CMB (if not listed).
Method of reporting disclosures
For any change of holding or transaction where disclosure is required, the beneficial owner (investor recorded at the MKK) must file a disclosure with the MKK by 08:00 (local time) on the third business day following the day on which the trade giving rise to the change of holdings was executed.
Investors can fulfill their disclosure obligation in one of three ways:
1. Investors may obtain a user ID and password for the MKK’s E-Governance portal (accessible via www.mkk.com.tr) from CBL and complete the required disclosure details on the portal. Disclosures submitted via the portal are published on the Public Disclosure Platform ((PDP) accessible via www.kap.org.tr).
2. Investors who do not have a user ID and password for the MKK’s E-Governance portal when disclosure is required may send their completed and signed disclosure form (attached below) to the PDP’s fax number (+90 212 334 74 79-80). The form must be completed in its Turkish language version (completing the English version is optional).
3. Investors who do not have a user ID and password for the MKK’s E-Governance portal when disclosure is required may send their completed and signed disclosure form (attached below) as a scanned PDF document to the PDP’s e-mail address firstname.lastname@example.org. The form must be completed in its Turkish language version (completing the English version is optional).
Failure to execute a required disclosure will incur a fine of between TRY 5,000 and TRY 15,000 imposed by the CMB.