Settlement services - Turkey

06.09.2019

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 availableAutomated for equities and equity products (warrants, rights, ETFs etc.)
Automated for other securities when the counterparty is TEB (that is, the investor from whom Clearstream’s customer receives or to whom Clearstream’s customer delivers securities holds an account with TEB). Manual/via telephone for other securities when the counterparty is another Turkish bank or broker (that is, the investor from whom Clearstream’s customer receives or to whom Clearstream’s customer delivers securities holds an account with another Turkish bank or broker).
On 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 counterparty

Deadline

Receipt in CBL

For receipt transactions free of and against payment, domestic counterparties must instruct the MKK or Takasbank as follows:

Market deadline

Deliver to:

Türk Ekonomi Bankası participant number TYS

For the account of:

investor account in Türk Ekonomi Bankası's books

Delivery from CBL

For delivery transactions free of and against payment, domestic counterparties must instruct the MKK or Takasbank as follows:

Market deadline

Receive from:

Türk Ekonomi Bankası participant number TYS

By order of:

investor account in Türk Ekonomi Bankası's books

a. “For the account of” and “By order of” must specify the investor’s (beneficial owner’s) name and 8-digit account number as recorded in Türk Ekonomi Bankası A.Ş.’s books. 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 10 is allowed for the matching and settlement of external transactions. The following rules apply in the event of a discrepancy within this limit :

  • Transactions in government debt securities and in corporate debt securities settle with the smallest settlement amount specified by the two parties – unless the counterparty insists on applying its settlement amount (in which case the counterparty’s settlement amount will prevail).
  • Transactions in other securities settle with the smallest settlement amount specified by the two parties.

Specific settlement rules / settlement restrictions

Internal transfer securities free (type 31) instructions (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% or higher than 110% of the weighted average Borsa Istanbul price on the trade date (or lower than 90% or higher than 110% 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% 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.

Management of failed instructions

TEB recycles failed external instructions on a daily basis until the customer cancels them.

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.