January 2023 – The Turkish Capital Markets Board ("CMB"), in its weekly bulletin dated 19 January 2023, announced a Principal Decision ("Decision") stipulating certain rules and requirements for the initial public offerings ("IPO") of non-public companies in Turkey.

Below we summarise the main changes introduced by the Decision.

Changes to the determination of institutional investors

The CMB has determined, within the scope of the Decision, that:

  • to consider an investment fund that is a hedge fund and/or has an expression of private in its title as an institutional investor, the following conditions must be met together:
    • the number of investors should not be less than 50, and
    • no investor should have more than 20% of the total number of fund participation shares;
  • requests submitted by portfolio management companies on behalf of their customers with whom they have signed individual portfolio management contracts shall not be evaluated within the scope of the institutional investor group;
  • organisations that meet at least two of the following criteria shall not be considered as institutional investors:
    • total assets of TRY 50,000,000;
    • annual net income of TRY 90,000,000;
    • equity capital over TRY 5,000,000.

Increase of the threshold for the sale method in primary IPOs

Following the Board's previous decision published in 2021, the "Sale on the Stock Exchange" method was applied in IPO transactions if the market value of the shares offered to the public was TRY 100,000,000 or less. The new Decision revises this threshold value to TRY 250,000,000.

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.