CMB has announced new trading principles for thin stocks through
its resolution dated 23.07.2010 and numbered 21/657. New principles
are expected to contribute to the efficiency of the price formation
in ISE. However, the resolution has raised fairness concerns and
has also created adverse reactions in the market.
CMB, for the implementation of the new trading principles, has
clarified the definition of the term "free float" through
its resolution dated 23.07.2010 and numbered 21/655. As per the
resolution; stocks held by (i) public entities, (ii) company
founders, their close relatives and affiliates, (iii) real or legal
persons holding at least 5% of company's share capital, (iv)
company's BoD members, high level executives and their close
relatives and/or (v) foundations and associations established by
the company, and stocks (i) pledged as security and/or (ii)
restricted for or can not be subject to trading activities due to
trading bans, sequestration or any other legal reason, shall not be
taken into account while determining the free float of an ISE
CMB, based on the above clarification, has classified ISE listed
companies into three groups, namely Group A, Group B and Group C
and, through the classification, has differentiated the trading
principles applicable to each Group. According to the
(1) Group A is the 'default" group
for all companies that do not fall under the category of Group B
(2) Group B is composed of;
Companies with a free float market value less then TRY
10.000.000 and with a free float corresponding to a number of
stocks less than 10.000.000,
Companies with a free float market value less than TRY
45.000.000 and with a free float corresponding to a percentage less
Investment companies market value of which are at least 1,5
times of their unit value.
(3) Group C is composed of;
Companies traded on ISE's Watchlist Market,
Companies with a free float corresponding to a number of stocks
less than 250.000,
Investment companies market value of which are at least 2 times
of their unit value.
Please refer to the attached chart summarizing the fundamentals of the
trading principles to which each group of companies will be subject
as from October 1, 2010.
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