01 A temporary short selling ban has been imposed on the Istanbul Stock Exchange ("BIST") and the equity and equity index derivative markets have been temporarily closed

A temporary decision has been adopted on BIST equity markets. In this context, as of 6 February 2023, short selling transactions are banned, and positions opened and closed without using the short selling button on the same day are also covered by this ban. Investment institutions are responsible for monitoring and enforcing this decision.

Furthermore, due to the increased volatility and unusual price movements following the earthquake disaster, BIST closed the Equity & Index Derivatives Markets within the Equity Market and Derivatives Market under the framework of the Capital Market Law Regulations, from 8 February 2023 until 14 February 2023, i.e., for a period of five business days, in order to ensure the reliable, transparent, efficient, stable, fair and competitive operation of the markets. Taking into account the low trading volume, it was also decided to cancel transactions that do not provide a healthy price formation in the closed markets.

02 Trading halt decision adopted regarding investment 02 funds and pension mutual funds

In accordance with the decision numbered 7/158 dated 8 February 2023 of Turkey's Capital Markets Board ("the Board"), the transactions described below have been suspended due to the closure of BIST, until the date the market is reopened, provided that the portfolio keeper is informed and investors are notified through a disclosure on the Public Disclosure Platform ("KAP")

Regarding investment funds:

  • Calculation of unit share prices and participation share trading transactions have been suspended, except for umbrella funds issued in connection with debt instruments, money markets, guaranteed/protected umbrella funds, funds issued under the precious metals umbrella fund, hedge funds with the phrases "foreign exchange", "money market" and "short-term" in their titles, and funds with the phrase "foreign" in their titles, and
  • Calculation of unit share prices and participation share trading transactions have been suspended for funds related to participation umbrella funds, except for funds that contain a specific asset group (lease certificates, gold, precious metals, money markets) in their title.
  • In addition, transactions on the Electronic Fund Trading Platform of Turkey (TEFAS) for the said funds have also been suspended.

Regarding pension mutual funds:

  • Share price calculations and share trading transactions, except for debt instruments, money markets, participation (excluding participation share funds), precious metals and initial pension funds, are suspended.
  • Share price calculations and share trading transactions of pension mutual funds, including OKS funds, except pension mutual funds with the words "foreign" and "currency" in their titles, have been suspended.
  • In this context, the trading of these funds on the Individual Pension Fund Trading Platform (BEFAS) is also suspended.

For investment funds and pension mutual funds, it has been decided to consider the first day of the BIST Equity Market's opening as the valuation date in the execution of share purchase/sell orders (including transactions realised on TEFAS/BEFAS) that have a valuation date of 8 February 2023.

In addition, according to the decision numbered 8/173 of 9 February 2023, the decision regarding retirement investment funds will be applied to all retirement funds.

03 Changes have been made to the regulations regarding credit interest rates and risk calculations for intermediary institutions

In accordance with the Board's announcement numbered 9/179 dated 14 February 2023 in order to reduce the negative impact of the earthquakes on financial markets and prevent investor victimisation:

  • To determine the maximum credit interest rate to be applied to customers whose portfolio size is 1,000,000 Turkish liras or less by intermediary institutions and the interest rate to be applied in case the whole or part of the amount they are obliged to pay due to a non-margin buy order is not deposited on the settlement day, the Board, in its announcement, states that the loan to be given by the intermediary institution should be determined at a reasonable level, taking into account the cost of funds provided by the intermediary institution, until 10 April 2023,
  • Until 30 June 2023, the position risk ratio for equity shares taken in their own portfolios by intermediary institutions is to be calculated at a rate of 3% instead of 10%, and the position risk ratio for "Other Customers" monitored under the credit account is to be calculated at a rate of 4% instead of 8%,
  • Credits provided to customers residing in earthquake zones with a business address or an account in the branch located in the earthquake zones, it has been decided not to take into account in the general transaction limit calculation from 6 February 2023 until 30 June 2023, and
  • The initial equity protection ratio, which was determined as 35% by the Board's decision numbered 17/400 dated 19 March 2020, will be applied as 20% until 10 April 2023.

04 Board facilitates share buyback transactions

According to the Board's principle decision numbered 9/177 and dated 14 February 2023, publicly traded companies and their subsidiaries whose shares are listed on the stock exchange can initiate a share buyback program with a board of directors' resolution without the need for a general assembly decision. The board of directors' decision must specify details such as the purpose, duration, number of shares to be purchased, and fund amount, and must be disclosed to the public in accordance with the rules of special circumstances disclosure. The board of directors' decision must also be presented to shareholders at the first general assembly meeting. Companies and subsidiaries that already have a buyback program in place do not need to take an additional board of directors' decision.

It has been decided to apply the principles mentioned above for bonus shares acquired due to repurchased shares. In addition, repurchased shares will not be sold for 30 days from the date of repurchase and the "first in, first out" method will be applied for sales. Moreover, the Board has decided not to apply certain articles in the Regulation on Repurchased Shares numbered II-22.1.

05 Changes have been made to the notification deadlines of financial reports for companies located in earthquake zones

n order to minimise the negative impact of the earthquake on the financial markets and prevent investor grievances, the Board has allowed businesses subject to capital markets legislation to submit their financial reports for the year 2022 until the final notification date determined in capital markets legislation. Investment funds have been granted an additional period until 30 April 2023 for the announcement of independently audited financial reports for the year 2022 and annual reports for pension mutual funds for the year 2022 to be published on KAP.

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