Settlement services - Turkey

01.06.2018

Pre-matching service

The table below summarises CBL's pre-matching service for external settlement instructions, as well as the pre-matching method and start time in the market. For details of CBL's pre-matching services, see Pre-matching services for external settlement instructions.

Service offeredMethod employedStart (local time)
All securities
Immediate Release Flag availableManual via telephoneOn receipt of instructions
Connectivity mediumInstruction format
CreationOnline and Xact Web PortalTick to enable the "Immediate Release" option.
Xact via SWIFT and Xact File TransferField :22F::STCO/CEDE/IREL

Procedures for domestic counterparties

Procedure for the domestic counterpartyDeadline
Receipt in CBL
For receipt transactions free of and against payment, domestic counterparties must instruct Takasbank as follows:Market deadline
-Deliver to: Türk Ekonomi Bankası participant number TYS.
-For the account of: CBL customer in Türk Ekonomi Bankası books a
Delivery from CBL
For delivery transactions free of and against payment, domestic counterparties must instruct Takasbank as follows:Market deadline
-Receive from: Türk Ekonomi Bankası participant number TYS.
-By order of: account number of CBL customer in Türk Ekonomi Bankası books a

a. For CBL customers or beneficial owners, “For the account of” and “By order of” must specify the account holder’s name and 8-digit account number at Türk Ekonomi Bankası A.S., which information is provided to the account holder accordingly. It is the responsibility of the CBL customer to ensure compliance with this requirement. Failure to inform the counterparty may result in a delay in the matching of instructions and possible settlement failure.

Allowed countervalue difference

A maximum difference in countervalue of TRY 101 is allowed for the matching and settlement of transactions with domestic counterparties. In the event of a discrepancy within this limit, the countervalue amount indicated by the delivering party will normally prevail.

Specific settlement rules / settlement restrictions

Internal transfer securities free (type 31) instructions, for example, deliveries without matching receipts are not allowed for Turkish securities.

It is a precondition and legal requirement for customers who wish to settle Turkish securities in Clearstream Banking to possess or obtain a Turkish tax ID (or, in the case of Turkish resident individuals, the Turkish national ID number) for each beneficial owner of such securities. Please refer to the Market Taxation Guide – Turkey (General information, Market specifics) for further details.

Clearstream Banking registers the beneficial owners’ tax IDs  (or, in the case of Turkish resident individuals, the Turkish national ID numbers) against the customer’s account. The customer must include the relevant ordering beneficial owner’s Turkish tax ID  (or, in the case of Turkish resident individuals, the Turkish national ID number) in each internal or external settlement instruction as follows:

Connectivity medium

Field

Value

Xact via SWIFT and Xact File Transfer

:70E::SPRO// (sequence B)

/TAX/xxxxxxxxxx

CreationOnline

Settlement Processing Narrative

/TAX/xxxxxxxxxx

Xact Web Portal

Settlement instruction processing additional details

/TAX/xxxxxxxxxx

Customers must include the deal price in each internal or external settlement instruction. Clearstream Banking transmits the deal price specified by the customer to Türk Ekonomi Bankası who records it for capital gains tax purposes (except for external against payment transactions where Türk Ekonomi Bankası determines and records the deal price based on the transaction’s settlement amount). Whenever the deal price specified by the customer (or, for external against payment transactions, the deal price determined from the transaction’s settlement amount) is lower than 90 percent or higher than 110 percent of the weighted average Borsa Istanbul price on the trade date (or lower than 90 percent or higher than 110 percent of the latest available weighted average Borsa Istanbul price) Türk Ekonomi Bankası is legally obliged to replace the customer’s price with the weighted average Borsa Istanbul price of the trade date (or with the latest available weighted average Borsa Istanbul price) and to record the adjusted price for capital gains tax purposes. Clearstream Banking and Türk Ekonomi Bankası may thus settle a customer’s transaction at, for example, 80 or 120 percent of the relevant weighted average Borsa Istanbul price while Türk Ekonomi Bankası will record it, for capital gains tax purposes, with the weighted average Borsa Istanbul price of the trade date or with the latest available weighted average Borsa Istanbul price.

Customers must identify transfers that do not entail a change of the beneficial owner (such as portfolio transfers) in the appropriate field of their free of payment instruction. Whenever Türk Ekonomi Bankası determines that the customer’s transaction does not entail a change of the beneficial owner it will record the deal prices stored on the original acquisition dates and ignore the deal price specified by the customer.

Based on the relevant acquisition and disposal prices Türk Ekonomi Bankası withholds and pays the relevant capital gains tax to Turkey’s Revenue Administration whenever it becomes due. Please refer to the Market Taxation Guide – Turkey (Turkish taxation at a glance) for further details on Turkish capital gains tax scenarios and rates.

Failure to include the tax ID (or, in the case of Turkish resident individuals, the Turkish national ID number) in the customer’s settlement instruction will result in Clearstream Banking’s rejection of the instruction.

Failure to include the deal price in the customer’s settlement instruction may result in Clearstream Banking’s rejection of the instruction.

No stamp duty is withheld on Turkish securities transactions by Clearstream Banking or by Türk Ekonomi Bankası. However, Turkish stamp duty may be payable on certain transactions when Turkish banks or brokers derive benefit from them. It is the customer’s responsibility to ensure compliance with Turkish stamp duty laws and regulations. Clearstream Banking does not assist in this regard. Please consult your tax advisor for further information.

Turkish banks and brokers that settle repos through Clearstream Banking must comply with Turkish reporting and withholding requirements – notably with the obligation to withhold and pay tax when they act as cash takers (interest payers). Clearstream Banking or Türk Ekonomi Bankası do not withhold such tax and it is the customer’s responsibility to ensure compliance with the relevant Turkish laws and regulations. Please consult your tax advisor for further information.

Back-to-back processing

Back-to-back processing is available for transactions in all dematerialised securities eligible in this market. If both the customer and the domestic counterparty meet their settlement obligations and fulfil the market's back-to-back requirements within the relevant deadlines, the linked receipt and the linked delivery will settle with same-day value. To benefit from this functionality, customers must ensure that their back-to-back instructions are formatted as follows, according to the connectivity medium used:

Connectivity mediumPool ID formatField(s) to be used
CreationOnline16x a
and
Turnaround
Pool Reference

Type of Settlement Transaction
Xact via SWIFT and Xact File Transfer:POOL//16x a
and
:SETR//TURN
Field :20C: sequence A1

Field :22F: sequence E

a. The reference (16x) must neither start nor end with a single slash ’/’ nor must it contain two consecutive slashes ’//’.

Bridge settlement

Bridge transactions in Turkish domestic securities are not possible.

Bridge transactions in TRY-denominated Eurobonds are possible.

Management of failed instructions

Against payment instructions with domestic counterparties that remain unmatched three business days after the date of the first attempt at settlement will be automatically cancelled by the local CSD. The depository will continue to re-send such instructions for settlement attempts until a cancellation instruction is received from CBL on behalf of the customer.

Unmatched free of payment instructions are kept in the depository system until cancelled by CBL on behalf of the customer.

New issues settlement

Transactions in new issues are settled on the day on which distribution occurs in Turkey. For confirmation times, please refer to Settlement times.

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1. Approximately equivalent to USD 6 but this may vary depending on the Central Bank’s FX rate for the specific day.