Turkey: A Major Shift In The Regulatory Perspective Regarding IPOs, Rights Issues And Bonus Issues

 Capital Markets Board of Turkey (the "CMB") announced new principles (the "New Principles") on IPOs, Rights Issues and Bonus Issues with a view to discipline the supply side of Turkish Capital Markets. This recent regulatory step is a major shift in the regulatory perspective and puts a prominent emphasis on the quality of fund raising activities in Turkish capital markets.

According to the new perspective, the capital markets motto which was largely based on increasing the number of companies benefiting from equity capital markets has turned out to be a motto with a conservative, but investor friendly character. From now on, companies intending tap into equity capital markets, their controlling shareholders and brokerage firms acting as intermediaries in the IPO market shall comply with certain principles.  

Below are the highlights of the principles envisaged by the CMB Resolution;

A) Principles for IPOs

  • Under the latest financial tables of the relevant company, the ratio of all receivables from related parties shall not exceed 50% over total short and long term receivables or 20% over its total assets. These restrictions may not be applicable, subject to discretion of the CMB, provided that (i) funds to arise from the IPO shall be used for collecting the receivables from the related parties as to meet the referred ratios; and (ii) it is committed that the company shall not be converted back into creditor status with respect to such receivables.
  • The intermediary institution shall underwrite the IPO at sale price;

(a)   for all shares to be offered when the value of IPO is up to TL 20 million; or,

(b)   for all shares up to 20 million and for 50% of the upper amount when the value of IPO is between TL 20 million and TL 40 million. 

It is also stated in New Principles that the intermediary institution shall not sell the shares that it acquired as a result of its underwriting hereabove below the IPO price for a term of six months following the trading date of such shares.

  • In public offerings conducted through a price range, the maximum price shall not be higher than 20% of the minimum price.
  • The valuation report may be subject to analysis and critics by any institutions other than the underwriter. In case such reviewers prepare an analyst report, this report shall also be announced to public.
  • In order for a brokerage firm  to prepare a valuation report in an IPO, such firm should have prepared and announced at least three analyst reports addressing the valuation reports with respect to IPOs in which it has not acted as leader or co-leader of the IPO during previous twelve months' term.

B) Principles re. After the IPOs

  • The shareholders holding 10% or more shares in capital of the company as of the date of the IPO and the shareholders holding the management control in the company shall not sell their shares below the IPO price for a term of one year following the trading date for the IPO. Shares to be acquired after the trading date shall be exempt from this prohibition.
  • With respect to companies with a total value lower than TL 40 million (to be calculated based on IPO price), additional shares corresponding to 25% of the nominal value of the shares to be offered to public shall also be made available for public offering through restricting the pre-emptive rights of existing shareholders. In case the market price of IPO shares go above 25% of the IPO price, these shares may be offered to public within 1 year after the publication of the prospectus. Until these shares are entirely sold, the shareholders holding 10% or more shares in capital of the company and the shareholders holding the management control in the company shall not sell their shares through the exchanges.
  •  The underwriter of the IPO shall prepare and announce at least 2 analyst reports on the publicly offered company  within one year following the IPO .
  • The company is required to make announcements addressing (a) whether the assumptions considered in calculation of IPO price have come true, and if not, the reasons of the same; and (b) whether the funds obtained through the IPO have been used in accordance with the principles set forth in the IPO prospectus, within 10 business days following the announcement of financial tables for two years following the IPO.

C) Capital Increase of Listed Companies through Rights Offerings

  • In case the funds to be obtained through the respective IPO exceeds the capital of the company and the funds are to be used for making the payments to the related parties arising from transfer of assets to the company other than cash, this capital increase shall be treated as a "Substantial Issue" as referred to in Article 23 of Capital Markets Law (Law No: 6362) (the "CML"). Accordingly, the shareholders who voted against such decision shall be granted the right to sell their shares to the company in accordance with Article 24 of the CML ("Right to Exit") prior to conducting the capital increase.
  • In capital increases through cash, the company is required to prepare and announce a report that describes the purposes of the funds to be obtained through the public offering. Furthermore, after the IPO, the company is also required to make announcements addressing whether the funds obtained through the IPO have been used in accordance with such purposes within 10 business days following the announcement of financial tables for two financial terms (including interim terms.

D) Capital Increase of Listed Companies through Bonus Shares

  • In capital increases where internal reserves, other than profits, are added to capital, and in consideration of the weighted average price of the shares at the exchanges during thirty days prior to announcement of such capital increase, in case the adjusted price of the shares is calculated below TL 2,- (two Turkish Liras), the respective company is not permitted to conduct such capital increase.

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.