Market Link Guide - Turkey

25.08.2020

Key features

CSD link as defined under CSDRa

Yes

Type of link

Indirect

a. CSD Regulation (EU) No 909/2014, Article 2(29).

CSD

Custodian

Name

The Merkezi Kayıt Kuruluşu (MKK)a is also referred to as the Central Registry Agency (CRA). The MKK uses the brand name Merkezi Kayıt Istanbul

Türk Ekonomi Bankası A.Ş. (TEB)

FATCA GIIN

Not available

JGXS32.00000.LE.792

LEI

789000XLUXTY4KRN2E81549300P1SLJZB82YLP69

Country of incorporation

Turkey

Turkey

Account type

Investor accountsb

Investor accounts

Account name

Accounts are in the name of beneficial owners

Accounts are in the name of beneficial owners

a. The MKK is the Turkish investor CSD for Government debt securities and the issuer CSD for other Turkish securities. Refer to Market infrastructure – Turkey for further details.
b. Omnibus account structure is currently not recognised under Turkish law. While certain exceptions may apply to foreign CSDs and custodians, these exceptions have not been fully implemented yet.

Operational arrangements

Yes/NoRemarks
Settlement in T2S

No

Settlement free of payment

Yes

Refer to Settlement services – Turkey (Specific settlement rules / settlement restrictions) for important market-specific requirements. Internal transfer securities free (type 31) instructions, that is, deliveries without matching receipts are not allowed for Turkish securities.
Settlement against payment

Yes

Refer to Settlement services – Turkey (Specific settlement rules / settlement restrictions) for important market-specific requirements. 
Settlement against payment in central bank money account of CBL customers

No

CBL holds a cash account at TEB. Against payment settlement of external transactions takes place on the cash account of TEB at the local central bank. Only CSD-member banks can have an account at the local central bank.

Bridge settlement

No

 
Partial settlement

Yes

Partial settlement is exceptional and subject to bilateral agreement.

Settlement penalty fees

Yes

Refer to Settlement process - Turkey.
Hold and release

Yes

Instructions that have been "locked in" for settlement or provisioned and released to the domestic market can no longer be held back from settlement.

Allegements

No

 
Transaction linking

Yes

 
Registered securities

Yes

Issuers can choose to issue securities in either bearer or in registered form.

Transaction management

No

The CSD (MKK) does not process market claims. However, TEB processes compensations manually based on customer requests. The CSD (MKK) does not process transformations.

Multi Market Securities

Yes

AT0000818802 (SHS DO AND CO AG ORD BR), listed at the Wiener Börse and at the Borsa Istanbul.

Lending and borrowing

No

 
Proxy voting

Yes

 
Investment Funds

Yes

ETFs, open-end investment funds, investment trusts (closed-end investment funds), hedge funds, money market funds eligible for secondary market settlement in MKK or Takasbank only.

Important note: Primary market subscription, redemption or switch to Takasbank’s TEFAS platform (Türkiye Elektronik Fon Alım Satım Platformu) are not CBL-eligible.

Liquidity Hub Connect

No

 
Sale and purchase of rights

No

 
Repo services

Yes

Debt securities only. Refer to the CmaX Product Guide.
Market restrictions

Yes

Refer to Investment Regulation - Turkey.
FTT

No

 
Miscellaneous

Yes

Turkish securities are held on segregated MKK accounts in the name of the respective beneficial owner. Investors other than Turkish resident individuals must possess or obtain a Turkish tax ID before settling transactions in Turkish securities. Turkish individual investors must communicate their Turkish national ID number before settling transactions through CBL.

Daily reconciliation

Yes

 
Link eligible for use in Eurosystem credit operations

No

 

Moment of entry

Yes

The moment of entry is the instance when the CSD system receives transfer orders.

Irrevocability

No

Transactions can be unilaterally cancelled before settlement. Securities and cash transfers become irrevocable at the point of settlement on CSD system.

Settlement finality

Once the transfer of cash and security is completed, settlement becomes final and irrevocable.

Legal arrangements

The below section is based on the legal opinion obtained by CBL that was issued on 26 December 2019. The information is provided for guidance only and should not be considered in isolation or as constituting a complete or definitive legal advice on any specific matter.

No insolvency proceedings against the custodian

Confirmed

Custodian’s liability for negligence

Under the agreement the custodian is not immune from legal actions by CBL.

Book-entry regime with in rem rights

Confirmed

Recognition of nominee concept

Nominee concept not explicitly recognised under local law, though CBL will be recognised as account holder of the account held in its name but on behalf of its underlying customers (akin to a nominee) provided that the custodian opens as many accounts as there are underlying investors.

No right of retention to the custodian

Confirmed

Segregation of assets at the custodian

Confirmed

No right of use

Confirmed

No upper-tier attachments

No specific rule in respect of upper tier attachments.

Insolvency of the custodian with no impact on CBL's rights 

Confirmed for securities.

Shortfall pro-rated among holders

No specific rule in respect of shortfall.

Settlement finality in case of insolvency

Confirmed