The Regulation on the Procedures and Principles for the Reimbursement of Investors by the Investor Compensation Centre Regarding the Partial Annulment of Article 13(4) of the Capital Market Law (the "CML")1 (the "Regulation") was published in the Official Gazette2 with the decision of the Constitutional Court dated 22 October 2015.

Before the partial annulment of Article 13(4) of the CML, it was regulated that the capital market instruments that are dematerialised and kept by the Central Registry Agency must be delivered to their owners within seven years and capital market instruments which are not delivered at the end of the seventh year would be transferred to the Investor Compensation Centre (the "ICC"), meaning that the owners of these capital markets instruments would lose their property rights on these instruments as a result of them being transferred to the ICC.

The decision of the Constitutional Court mentioned above emphasised the fundamental constitutional right to property and thereby relied on Articles 13 and 35 of the Constitution of the Republic of Turkey (the "Constitution"). As per the decision of the Constitutional Court, Article 13(4) of the CML indefinitely and absolutely removes the property rights of investors, does not enable a smooth and safe disposal of the goods and movables in the capital markets and does not foresee a compensation mechanism for investors in case there is a violation of such rights. Accordingly, the Constitutional Court stated in its decision that Article 13(4) does not provide a reasonable balance between the public interest and personal property rights. Consequently, the Constitutional Court partially annulled Article 13(4) of the CML with the reasoning that it is contrary to the Constitution and includes an imbalanced intervention into a person's right to own property.

In this respect, the Capital Markets Board then regulated and introduced a new procedure for the reimbursement of investors. According to the Regulation, property of capital market instruments that is transferred to the ICC or the amount of the capital market instruments sold by the ICC after the transfer to the ICC will be reimbursed to investors. An application by investors should be made to the ICC within ten years starting from the effective date of the Regulation.


1. The Capital Markets Law is numbered 6362 published in the Official Gazette numbered 28513 and dated 30 December 2012.

2. Official Gazette numbered 29824 and dated 7 September 2016 following the partial annulment of Article 13(4) of the Capital Market Law No.6362.

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