Turkey: New customer instruction requirements and new market fees on equity transactions - Update

19.11.2015

Note: Further to our Marketflash M15013, dated 14 September 2015, this announcement originally published on 15 May 2015, updated on 29 May 2015 and 21 September, has been further updated following the confirmation from Borsa Istanbul that the new live date will be 30 November 2015 and includes additional information redarding penalty fees. The changes have been highlighted.

Clearstream Banking1 advises customers that, with effect from

30 November 2015

  • customers are required by Takasbank and the Central Registry Agency (CRA) to disclose whether their equity trades are “on-exchange” (Borsa Istanbul) trades;
  • Takasbank and the CRA are charging transaction fees on equity transactions that are “off-exchange”, and may charge penalty fees in cases of mis-declaration.

Impact on customers

As a result of this market regulatory change, customers are required to disclose the place of trade in both internal and external settlement instructions. Customers are responsible for their declarations and must therefore ensure their accuracy at all times.

Internal and external trades will be unaffected provided that the appropriate instruction formatting is respected.

Instruction format required

Clearstream customers will be required to indicate the place of trade in their settlement instructions.

To declare a settlement instruction as an on-exchange trade:

SWIFT MT54X (Sequence B)CreationOnline
:94B::TRAD//EXCH/XISTa

Place of Trade: Stock Exchange

Narrative: XIST

:94B::TRAD//EXCH/XEQY

Place of Trade: Stock Exchange

Narrative: XEQY

a. Customers are strongly advised to use :94B::TRAD//EXCH/XIST. The Market Identification Code (MIC) XIST refers to Borsa Istanbul, while the MIC of XEQY refers to Borsa Istanbul - Equity Market.

Instructions not containing the place code EXCH or that are not declared as XIST or XEQY will be considered as off-exchange equity trades.

Instructions that do not contain field :94B::TRAD will be processed as off-exchange transactions by default.

The required information in field :94B::TRAD is not a pre-matching criteria and the trade will not fail if field :94B::TRAD is missing in one of the counter legs of a settlement transaction.  If there is a mis-declaration Takasbank and the CRA will consider such an instance as an incorrectly declared :94B::TRAD and may apply penalty fees.

Corrections that are allowed by Takasbank and the CRA are as follows:

ChangesTakasbankCRA
Change on-exchange to off-exchangeAllowed, but within one month of settlement dateAllowed until the end of the third day of the following month
Change off-exchange to on-exchangeNot allowedAllowed until the end of the third day of the following month

Applicable fees

Takasbank settles both delivery and receipt against payment transactions and will apply fees to off-exchange trades.

The CRA settles delivery and receipt free of payment transactions, however the CRA will only charge fees on off-exchange delivery free of payment transactions. There is no charge for receipt free of payment transactions.

The charges are being applied according to the following guidelines:

  • Applicable on trades with values higher than 1000 TRY;
  • Fees will be calculated at 0.3 bps of the market value of the equity trades;
  • The  minimum charge is 5 TRY and the maximum charge is 25 TRY per transaction. 

Clearstream reserves the right to charge the above applicable fees to customers.

Penalty fees

If a transaction is found to be incorrectly declared (for example, an off-exchange declared as an on-exchange) and not corrected within the allowed correction period, Takasbank and the CRA will impose penalties as follows:

  • A charge of 0.6 bps over the transaction value (penalty fee) will be applied (the maximum penalty fee is TRY 1000 plus 5% Banking Insurance and Transaction Tax);
  • An additional interest charge on the penalty fee (to be calculated at the Central Bank of Turkey’s interest rate based on the number of days that have passed since the settlement date) will also be applied.

Any penalty fees charged by the market for incorrect declarations will be passed through to customers at cost.

Further information

For further information, customers may contact Clearstream Banking Client Services or their Relationship Officer.

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1. Clearstream Banking refers collectively to Clearstream Banking AG, registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500, and Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248.