The Communiqué on Principles Regarding Security
("Communiqué") has been published
in the Official Gazette dated August 29, 2013 and numbered 28750,
replacing the former Communiqué dated August 5, 2011 and
numbered 28016 ("Repelled
The Repelled Communiqué has categorized the Security
Investment Companies ("Company or Companies") as Group A
and Group B Companies depending on how they have invested twenty
five percent of their monthly aggregate portfolio values. The
Companies invested their portfolios in companies which were
incorporated in Turkey were determined as Group A companies and the
remaining Companies were determined as Group B Companies.
Since tax-related differences amongst security investment
companies no longer exist, this distinction has been removed so
that the Companies that will be incorporated under the provisions
of the Communiqué will no longer be categorized.
Both the Repelled Communiqué and the Communiqué
include provisions regarding the share transfers of these Companies
prior to their initial public offerings. However, the Repelled
Communiqué was silent about the procedures for the share
transfers performed after an initial public offering.
The Communiqué has filled that gap with respect to the
share transfers performed after an initial public offering by
pointing that prior approval of the Capital Markets Board
("CMB") has to be obtained if there is a
change of control regarding the shares which grant its holder the
right of control in the management of the Company.
"THE REPELLED COMMUNIQUÉ WAS SILENT ABOUT THE
PROCEDURES FOR THE SHARE TRANSFERS PERFORMED AFTER AN INITIAL
There is another significant provision implemented by the
Communiqué governing the sale of shares of the Companies
which was not covered by the Repelled Communiqué.
Pursuant to Article 14 of the Communiqué, where the
aggregate stock exchange prices for the Company shares are below
TRY 1,00 prior to the announcement made by the Company regarding a
capital increase, the capital increase can be performed either by
(i) issuance of shares below the nominal value provided that all
privileges (if any) shall be revoked or (ii) an allocated capital
increase over a determined price provided that the determined price
shall not be less than the nominal value or the unit net asset
The Communiqué provides further that provides the
Companies may either manage their own portfolio if they employ a
sufficient number of qualified personnel or acquire such services
from portfolio management companies approved by the CMB. The
Repelled Communiqué made no provision in this regard.
Similarly, the Communiqué provides that the Companies may
acquire the following services from investment companies:
(i) accounting and operations and employment of the personnel
responsible for internal audit, and
(ii) services regarding risk management systems provided that
its control and supervision shall be performed by the board of
Additionally, Companies may acquire services regarding risk
management systems from their own portfolio management companies
given that they also acquire portfolio management services from
According to Article 32 of the Communiqué, the assets
within the portfolio of a Company shall be kept before a portfolio
retaining company effective from July 1, 2014.
Under the Communiqué limitations to the Company portfolio
are to be determined in line with the provisions set forth in the
Communiqué on Principles Regarding Investment Funds
("Investment Fund Communiqué") so
that the ratios of assets to be included under the Company
portfolio should comply with the provisions under the Investment
Previously, the liabilities of the board members of a Company
were not addressed under the Repelled Communiqué. This has
been rectified by the Communiqué so that the board members
or the managing director authorized by the board of directors shall
be responsible from their liabilities with respect to portfolio
limitations and public disclosures.
Finally, Communiqué regulates in detail the provisions
regarding the sale price applicable when the Company secedes from
its status as a Security Investment Company. These regulations also
include the price calculations that will be applied with respect to
the separation right of the shareholders.
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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