The Capital Markets Board of Türkiye ("CMB") has issued a new resolution dated 23.03.2025 and numbered 18/574 ("Resolution") introducing a set of temporary regulatory measures in response to recent developments in Borsa Istanbul. The aim of the Resolution is to protect investor rights and ensure stability in the functioning of the market. Within the scope of this Resolution, the following measures have been adopted:
Short Selling Transactions Temporarily Prohibited
Between March 24 and April 25, 2025, short selling transactions in Borsa Istanbul equity markets have been completely prohibited. This prohibition also covers intraday positions that are opened and closed on the same day without using the designated short selling button. Investment firms have been reminded that they are responsible for monitoring and ensuring compliance with this regulation.
Flexibility Granted in Share Buybacks
Between March 24 and April 25, 2025, certain restrictions related to share buyback transactions will be temporarily lifted:
- Removal of Price Limits
Between March 24 and April 25, 2025, price limitations on share buyback orders will be temporarily suspended. Companies will be allowed to place buyback orders at prices higher than the current best bid or the last traded price.
- Removal of Trading Session Restrictions
Under the existing regulations, share buybacks could not be executed during certain time intervals, specifically, the opening and last 15 minutes of the first session, the opening and closing of the second session, and during periods when the single price method was applied. With the Resolution, this restriction will not apply between March 24 and April 25, 2025, allowing companies the flexibility to carry out share buybacks during all trading sessions, including opening, midday, and closing periods.
- Removal of Budget Cap
The upper limit on the total monetary amount allocated for share buybacks will be temporarily lifted. Under the previous regulation, companies were only permitted to use resources eligible for profit distribution to finance share buybacks. In other words, buybacks could only be made using distributable profits. With the temporary removal of this restriction, companies will be allowed greater flexibility in utilizing a broader range of funds for share buybacks during the specified period.
Flexibility in Equity Ratio for Margin Trading
Under current regulations, the minimum equity maintenance ratio for ongoing margin trading transactions was set at 35%. With the Resolution, this ratio may be applied flexibly at a minimum of 20% until the end of the trading session on April 25, 2025. This flexibility may be exercised by intermediary institutions in line with their internal risk policies and while taking client demands into consideration.
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.
