On November 27, 2015 the Capital Markets Board (the "CMB") published draft amendments to its current Disclosure Communiqué (II-15.1) which would amend the scope of disclosure for related parties and certain issuers. It is available on the CMB's website for public comment until December 18, 2015.
What the CMB proposes
If adopted in its current form, the draft communiqué would introduce a number of new rules for disclosures of public companies and issuers of capital markets instruments other than shares:
- Persons with managerial responsibility, persons closely affiliated to these persons, and the parent company will be required to disclose sales of an issuer's shares exceeding TRY 50,000 (approx. USD 17,500) within ten business days prior to the sale transaction. Currently, these persons and parent companies are only required to disclose the sale transaction at least one business day prior to the transaction while share purchases by these people are also subject to disclosure.
- If a sale that has been previously disclosed by persons with managerial responsibility, persons closely affiliated to these persons, or the parent company does not occur, the fact that the transaction has not been concluded must also be disclosed, together with the reason.
- Privately held companies that have issued capital markets instruments to qualified investors would be required to disclose events or developments that (i) change the issuers' financial condition or activities, and (ii) could result in an adverse effect on the issuer's ability to fulfill its obligations to debt instrument holders. Currently, the first condition is limited to changes in conditions set during the issuance of a capital market instrument.
- Fund users (i.e., obligors of lease certificate (sukuk) holders or asset leasing companies) in lease certificate issuances would no longer be required to make public disclosures.
Conclusion
The draft communiqué furthers the protection provided to investors in Turkish capital markets by increasing publicly available information through extending disclosure requirements of public and privately held companies issuing capital markets instruments to qualified investors. The CMB also intends to lower the regulatory compliance costs for lease certificate issuances to increase the share of Islamic finance in Turkey.
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