Turkey: Market Abuse Actions In Accordance With Capital Markets Law


The Capital Markets Board adopted the Communiqué on Market Abuse (VI-1.104.1) ("Communiqué") in order to determine the acts and transactions that result in the distortion of the reliability, transparency, and stability of stock markets and other organized markets, which cannot be justified through reasonable economic or financial grounds, and sanctions upon those persons who do such acts and transactions. The Communiqué was published in the Official Gazette on 21.01.2014, and came into effect the same day. The Communiqué sets forth market abuse actions, and actions that are not deemed as market abuse.

Market Abuse with respect to Inside or Periodic Information

Persons that have inside or periodic information prior to the public disclosure of such information pursuant to the capital markets law, shall keep such information confidential until the disclosure thereof. The disclosure of such information by the persons in question before the public disclosure, and the execution of capital markets transactions based on direct or indirect knowledge of such information shall be deemed as market abuse.

Transactions regarding relevant capital market instruments by persons having inside or periodic information, or by the spouse, children, or cohabitants of such persons during the period starting from the day after the end of the accounting period regarding financial statements and reports of issuers, or independent audit reports, until the date of disclosure of those statements and reports to the public in accordance with legislation, is considered and treated as market abuse.

Transactions regarding relevant capital market instruments by persons having inside or periodic information or by the spouse, children, or cohabitants of such persons, during the period starting from the date of the finalization of inside or periodic information until the date of disclosure of such information to the public in accordance with legislation, is considered and treated as market abuse.

Market Abuse Actions with respect to the Orders or Transactions

Actions and acts by persons acting alone, or together, through stock markets, or in other organized markets, which may be deemed as material or effective, taking into account the determined value of the capital market instruments, price variations, transaction volumes, transaction amounts, transaction rates, order amounts, order rates, order cancellation amounts, order cancellation rates or order execution rates, distorting the reliability, transparency and stability of stock markets and other organized markets, or creating wrong or false impressions regarding prices, price variations, supply and demand of capital market instruments, or preventing competitive environments of the market, or formation of fair or correct prices:

  1. by selling and purchasing, executing account activities, giving orders, or cancelling or changing orders; or
  2. transmitting orders at different price levels; or
  3. by giving reverse orders within a period of less than one minute, such as a selling order at a price equal to or lower than the best purchase price in the market, or a buying order at a price equal to or higher than the best sale price; or
  4. executing transactions with itself or reciprocal transactions; or
  5. by executing transactions with the purpose of affecting opening or closing prices;
  6. executing transactions with the purpose of affecting the end-of-day or end-of-maturity settlement prices; or
  7. executing transactions with the purpose of increasing, decreasing, or maintaining the price; or
  8. exceeding the position limits provided for all accounts associated with a registry, or on a market basis in futures and options markets; or
  9. executing transactions that are similar to transactions executed in the relevant underlying asset market in futures and options markets

are considered and treated as market abuse actions.

Market Abuse through Communication or Correspondence

To indicate false, wrong or misleading information, spread rumors, inform, make material disclosures, make comments, or prepare reports that can affect prices, values of capital market instruments, or the decisions of investors, or which are capable to effect market indicators that may affect relevant indicators, is considered as market abuse. Furthermore, the execution of such action by persons who know, or should have known, that such actions are false, wrong or misleading, is considered as market abuse (For instance: board of director's members, managers, specialists, etc.).

Non-disclosure of information that is required to be disclosed pursuant to the Regulations by the Capital Markets Board regarding material disclosure, and which may affect the prices, values of capital market instruments, or the decisions of investors are also considered as market abuse.

In addition, selling a capital markets instrument despite giving a recommendation to purchase or hold, or purchasing a capital markets instrument despite giving a recommendation to sell, after making comments, or giving advice about such capital market instruments through newspapers, television, internet, or similar other media instruments, until the date of revising such comments or advice, or in any event, within 5 business days thereafter, is deemed as market abuse.

Other Market Abuse Actions

Prior to the transmitting of orders to investment companies, relevant stock market, or other organized markets that are capable of affecting the price or value of capital market instruments, to give orders regarding the capital market instrument in question or other relevant capital market instruments with advance knowledge on order of the investors, or to change or cancel such orders, or to transfer the information on the orders in question to third parties are considered as market abuses.

Following transactions in stock markets or other organized markets that are absent a power of attorney issued by a Notary Public, are considered as market abuse:

  1. to transmit orders, execute transactions, or make transfers by using the account of another person; or
  2. to allow other persons to transmit orders, execute transactions, or make transfers by allowing others to use his/her account.

In the event that the shareholders having control plans to sell their shares in the stock market, which exceed 10% of its share capital, or 50% of the value of their shares on de facto circulation in any twelve month (12) period, the relevant shareholders shall issue an information form in accordance with the legislation, and the form shall be approved by the Capital Markets Board prior to the sale. The form approved by the Capital Markets Board shall be announced through a Public Disclosure Platform. Non-compliance with aforementioned Article 27 of the Communiqué on Shares (VII-128.1) and the principal decision of the Capital Markets Board shall be deemed as market abuse.

If a person who is prohibited from concluding transactions by Capital Markets Board trades in stock markets, or in other organized markets, by using his/her own account, or the account of other persons during the prohibition period, the person in question shall be deemed to have committed market abuse.

Actions Not Considered As Market Abuse

The following transactions are not considered as market abuse actions:

  1. Transactions in order to ensure the financial stability or implementation of the policies on money, rates of exchange, and management of public debts by the Central Bank of the Republic of Turkey, and other authorized administrative authorities, or those persons who act on their behalf,
  2. Allocation of shares regarding repurchase programs, share acquisition programs to personnel, or other allocations of shares to the personnel of the issuer or subsidiaries under the regulations of the Capital Markets Board,
  3. The sale or purchase of capital markets instruments, or giving orders, or cancellation of orders in order to maintain the market price of such instruments in a determined period, provided that such transactions are concluded in conformity with the provisions of Capital Markets Law No. 6362 regarding the transactions on price stability and market making,
  4. The professional activities of journalists conducted in accordance with journalism ethics and standards provided that;

    1. an unfair advantage is not directly or indirectly obtained through the publishing of news or comments; or
    2. news or comments are not published in agreement with, or under the guidance of, persons who have committed abuses of information or market manipulation crimes; or
    3. the relevant capital markets instrument are not traded with, or such information is not disclosed to, third parties before publishing the news or comments.


The Communiqué of the Capital Markets Board provided for the acts and actions distorting the reliable, open, and stable functioning of stock markets and other organized markets, and the Communiqué defines actions that affect the price of capital market instruments, the decisions of investors, distorting the competition, and the fair and correct functioning of the transactions.

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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