Capital Markets Board of Turkey (the "CMB") has
revised the legislation on related party transactions and internal
organization of listed companies with a view to relax and abolish
certain requirements as well as to boast investor protection.
Below is a brief highlight of the notable aspects of the recent
The percentage of a specific one- off related party transaction
requiring an independent appraisal report has been decreased to 5%
(it was 10%).
Listed companies are no longer required to obtain an
independent appraisal report for related party transactions with a
continuous and prevalent nature and exceeding 10% of their total
assets or gross sales in a particular accounting period. As per the
new provisions, board of directors of the listed company shall
prepare a report comparing the terms of such type of related party
transactions with market practices, disclose this report to
shareholders 15 days in advance of the annual general assembly
meeting and inform shareholders at the meeting with respect to the
particulars of the transactions. In this respect, independent
appraisal for continuous and prevalent related party transactions
has become an optional issue for listed companies and has been left
to the discretion of the company management. However, it should be
noted that the CMB reserve the right to step in and is entitled to
require the preparation of an independent appraisal report when it
Listed companies, excluding the ones listed on Emerging
Companies Market, have been required to hire a full time high level
executive in order to secure compliance with capital markets
legislation and coordinate corporate governance practices. Under
the former provisions such executives, depending on the market
value of the relevant listed company, shall solely hold an advanced
level capital market license or corporate governance license in
addition to advanced level capital markets license. Although the
above principles are still applicable, the recent amendment has
relaxed these requirements for certain type of companies.
Please refer to the below table summarizing the fundamentals of
the currently applicable hiring and licensing requirements for
Hiring And Licensing Requirements For Listed
* Investment companies with market value of above TL 200.000.000
and is not fully or jointly controlled by an entity hiring a high
level executive holding advanced level license and corporate
governance license, such investment companies shall hire a full
time high level executive for the purposes of the CMB
Communiqué Serial: IV, No: 41.
** It differs according to the market value of the investment
company. If certain conditions are met investment company is not
required to hire a full time high level executive.
***If a group of listed companies each having a market value
which is equal to or exceeding TL 200.000.000, is either fully or
jointly controlled by the same entity, those companies can hire a
full time high level executive who does not hold a corporate
governance license provided that the controlling entity has already
hired a full time high level executive person holding the said
license in addition to advanced level license.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Under Regulation (EU) No. 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories ("EMIR")...
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