On 5 May 2020, Banking Regulation and Supervision Agency ("BRSA"), with its decision numbered 9010, decided to limit the sum of TRY placements, TRY reserves, TRY repo and TRY loan transactions that Turkish banks (including such banks' foreign branches and consolidated foreign partnerships in the form of credit or financial institutions on abroad) engage with foreign financial institutions, to 0,5 percent (0.5%) of the respective bank's most recently calculated equity. 1
On 20 May 2020, BRSA, with its decision numbered 9031, has granted certain exemptions to the above limitation.
- For the settlement of TRY bonds and TRY lease certificates in an efficient way and for the execution of transactions of TRY securities, BRSA decided to exempt the foreign central custody institutions that will be determined by BRSA from this limitation and in this regard, Euroclear Bank and Clearstream Banking are exempted from this limitation.
- The following transactions are also exempted from the above limitation and so, Turkish resident banks;
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- may engage into TRY transactions, as expressed in the BRSA Decision dated 5 May 2020, with Turkish Republic of Northern Cyprus (Northern Cyprus) Central Bank and Northern Cyprus Kalkınma Bankası A.Ş. (Development Bank), and
- may engage into TRY transactions, as expressed in the BRSA Decision dated 5 May 2020, with Northern Cyprus branches and may maintain TRY mandatory reserves that are required to be held with Northern Cyprus Central Bank.
Footnotes
1 You may access our publication related to the respective BRSA decision from the following link: https://www.sadik-sadik.com/new-restriction-by-brsa-on-turkish-banks-try-transactions-with-foreign-financial-institutions/
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