The Constitutional Court recently cancelled part of Article 13(4) of the Capital Markets Law, deeming aspects of the article to be unconstitutional in decision number 2015/29, dated 22 October 2015. The court's decision was published in the Official Gazette number 29530 on 12 November 2015. The court held that Article 13(4) indefinitely and absolutely removed peoples' property rights on capital markets instruments, also removing indemnity for people who wish to invest in capital markets. The court held that Article 13(4) offered no form of compensation if these rights were injured. Accordingly, the Constitutional Court held that Article 13(4) did not provide a reasonable balance between public interests and personal property rights.
Article 13 of the Capital Markets Law outlines dematerialization of capital markets instruments. Article 13(4) states that fund units cannot be redeemed by intermediaries and capital market instruments which are not delivered by the end of the seventh year following the date they began to be monitored on record will be transferred to the Investor Compensation Centre. Limited real rights will be automatically regarded as terminated and the instrument will be sold within three months of the transfer.
The Constitutional Court held that Article 13(4) contradicted key provisions in the Turkish Constitution regarding property rights and restriction of fundamental rights and freedoms.
The Constitutional Court held that Article 13(4) of the Capital Markets Law indefinitely and absolutely removed peoples' property rights on instruments they own, also removing indemnity for people who wish to invest in capital markets. The court held that Article 13(4) of the Capital Markets Law offered no form of compensation if these rights were injured. Therefore, it cancelled the related parts of Article 13(4).
Please see this link for full text of the Constitutional Court Decision (only available in Turkish).
Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.
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