Settlement process - Turkey
Takasbank matches and clears the street side of all Borsa Istanbul trades.
Automated pre-matching is available via Takasbank for OTC trades and for the client side of Borsa Istanbul trades, while free of payment transactions are pre-matched via the MKK. However, this applies to equities and equity products (warrants, rights, ETFs etc.) only. For other securities, local custodians pre-match transactions via telephone.
Settlement cycles
| Debt securities: | T+0 for Borsa Istanbul trades (on-exchange trades); negotiable for OTC trades |
| Equities and equity products (warrants, rights, ETFs etc.): | T+2 for Borsa Istanbul trades (on-exchange trades); negotiable for OTC trades |
Settlement flow
The street side of all Borsa Istanbul trades that have been successfully cleared by Takasbank settles on a net basis on accounts maintained by the local banks and brokers at Takasbank, the MKK and (government debt securities:) the CBRT.
The following settlement flows apply to OTC trades and to the client side of Borsa Istanbul trades:
Government debt securities
Free of payment transfers between investors’ local agent banks are matched via telephone and settle on the investors’ segregated securities accounts at the MKK.
Free of payment receipts from a local bank’s proprietary CBRT account require matching via telephone and a transfer of the securities from the local bank’s CBRT account to the client depot account of the receiving investor’s agent bank at the CBRT. Securities are then realigned from that account to the receiving investor’s segregated securities account at the MKK.
Free of payment deliveries to a local bank’s proprietary CBRT account require matching via telephone and a transfer of the securities from the delivering investor’s segregated securities account at the MKK to the client depot account of the delivering investor’s agent bank at the CBRT. Securities are then transferred from that account to the local bank’s proprietary CBRT account.
Against payment transactions require matching via telephone and the realignment of the securities from the delivering investors’ segregated investor account at the MKK to its agent bank’s client depot account at the CBRT. Securities are then transferred against a simultaneous exchange of cash via the CBRT’s Electronic Securities Transfer System (ESTS) from the client depot account of the delivering investor’s agent bank to the client depot account of the receiving investor’s agent bank. Once the transfer has been completed in the CBRT, securities are realigned from the client depot account of the receiving investor’s agent bank to the receiving investor’s segregated investor account at the MKK.
Equities and equity products (warrants, rights, ETFs etc.)
Free of payment transfers matched through the MKK settle on the investors’ segregated securities accounts in the MKK.
Following their successful matching through Takasbank, against payment transactions settle on segregated investor accounts in the MKK (securities) and on omnibus cash accounts in Takasbank. The DVP system operated by Takasbank ensures a simultaneous exchange of the securities against cash.
Corporate debt securities
Free of payment transactions matched via telephone settle on the investors’ segregated securities accounts in the MKK.
Following their successful matching via telephone, against payment transactions settle on segregated investor accounts in the MKK (securities) and on omnibus cash accounts in Takasbank. The DVP system operated by Takasbank ensures a simultaneous exchange of the securities against cash.
Registration
Issuers can choose to issue securities in either bearer or registered form.
Notwithstanding their legal form all BIST-listed securities are recorded on segregated investor accounts in the MKK, i.e. in the name of the beneficial owner against its tax ID or (in the case of Turkish resident individuals) against the beneficial owner’s Turkish national ID number (see the Market Taxation Guide - Turkey for more details).
Stamp duty
No stamp duty is levied on Turkish securities transactions conducted by foreign investors. However, Turkish banks and brokers deriving benefit from certain transactions may be liable to pay stamp duty on such transactions.
Penalties (buy-ins etc.)
Short selling
Short selling is only allowed, provided the investor’s sale order displays the relevant short selling code that will be reported to the BIST.
Buy-ins
- Equities and equity products (warrants, rights, ETFs etc.)
Borsa Istanbul trades that fail to settle by 16:45 local time on the contractual settlement date face a market penalty. Trades that have still not settled by 09:30 local time on T+3 trigger a buy-in or sell-out on the BIST with same-day value. Any price differences are charged to the failing broker; the broker’s potential shortfalls are covered by Takasbank’s guarantee fund.
Trading restrictions apply to investors that trigger a buy-in or sell-out more than twice within three months.
- Debt securities
There is no buy-in procedure for debt securities. A market penalty is charged to brokers that fail to settle Borsa Istanbul trades by 16:45 local time on the contractual settlement date. The penalty is calculated on the basis of the highest prevailing overnight interest rate (highest of the BIST Repo-Reverse Repo market and CBRT reference rates), whereby a progressive multiplier applies. The multiplier is a function of the time at which the transaction finally settles (before 17:00 on the contractual settlement date / after 17:00 on the contractual settlement date / a later date).