With the entry into the force of the Capital Markets Law No.
6362 ("CML") on December 30, 2012, the
legal landscape of the Turkish capital markets has dramatically
changed. The CML was enacted due to reasons such as (i)
harmonization with the European Union legislation, (ii) the new
Turkish Commercial Code and its provisions applicable to joint
stock companies and (iii) the fact that no significant amendment
was made to the previous Capital Markets Law no. 2499 since 1999
despite the growing complexity of the financial markets and the
increasingly interconnected global financial
The legislative changes constitute only one dimension of the
desired change for the liberalization of the Turkish capital
markets, which has been officially set under the Istanbul
International Financial Center Project within the scope of the
government agenda "2023 Vision".
Another important aspect of this liberalization trend is the
incorporation of Borsa Istanbul, currently the only stock exchange
in Turkey, as a private company (in the form of a joint stock
corporation), which brings together all the exchanges (Istanbul
Stock Exchange, Istanbul Gold Exchange and Turkish Derivatives
Exchange) and operating in the Turkish capital markets under a
As a part of Borsa Istanbul becoming an international hub,
Nasdaq's purchase of 5% of Borsa Istanbul's shares was the
initial step of its globalization, which aims to increase the
competitiveness of Borsa Istanbul in international capital markets.
Globalization efforts of Borsa Istanbul continue by the launch of
trading in Turkish equity index derivatives products on London
Stock Exchange Derivatives Market as of September 2015.
In addition to the institutional and operational transition that
Borsa Istanbul is going through, ListingIstanbul1
initiative of Borsa Istanbul also plays a vital role in its active
efforts to increase the number of listed foreign securities.
An important legal change supporting Borsa Istanbul's
current stance has occurred in the Communiqué on Foreign
Capital Market Instruments and Depositary Receipts and Foreign
Investment (the "Communique") by an amendment entered
into force on January 22, 2015. According to the amendment, foreign
governments and foreign governmental institutions can now issue
capital markets instruments in Turkey. In order to ease the legal
process, the Capital Markets Board ("CMB") regulated that
it has sole discretion to determine the principles regarding the
sale of foreign capital market instruments by foreign governments
and foreign governmental institutions in Turkey. Additionally, in
order to provide an incentive, the CMB has also set the issuance
fee as 0.
Within the scope of the globalization trend, Borsa Istanbul
gives a special focus on Commonwealth of Independent States
("CIS"). Upon Russia's actions towards Ukraine and
the annexation of Crimea by Russia, USA and EU have imposed
sanctions and expanded the measures taken against Russia. There are
also sanctions imposed on Belarus and Ukraine. In this current
landscape investors from CIS region are seeking alternative
markets. Despite all the pressure on Turkey to support the
sanctions enacted by EU, the Turkish government has rejected this
Considering all the recent legislative amendments favoring
foreign investors and the ongoing relations between Turkey and the
CIS countries, it is evident that the Turkish capital markets
provide a fertile and secure investment environment and makes it
highly attractive for CIS investors. For the issuance of foreign
capital markets instruments by both foreign governments and foreign
private institutions, Borsa Istanbul offers a promising investor
climate with reliable capital markets and regulatory environment.
The fact that Borsa Istanbul is a shareholder and has board seats
in the stock exchanges of two of the CIS countries, namely,
Kyrgyzstan and Azerbaijan demonstrates its continuous efforts to
attract foreign investors from the CIS region.
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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