Client Alert:

CommuniquÉ on the Sale of Capital Market Instruments

The Communiqué On The Sale Of Capital Market Instruments (the “Communiqué”) has been published in the Official Gazette dated June 28, 2013 and numbered 28691. The Communiqué will come into effect on July 28, 2013.

The Communiqué redefines the terms “corporate investor” and “qualified investor” to comply with the European Union legislation. Moreover, the Communiqué provides the procedures and principles as to earn and lose the qualified investor status. In this respect, the Communiqué sets out the principles on monitoring and control of the number and status restrictions in sales to the qualified investors and in allocated sales. It also imposes certain duties on the Central Registry Agency and its members.

Additionally, the Communiqué determines when the sale of capital market instruments will actually be completed. It also re-regulates the sale procedures of capital markets instruments such as when the sale process will begin, sale periods and when the sale process will be halted.

When book building, the Communiqué allows the investors to sign the demand forms with their electronic signature or actually fill out these forms through an electronic environment without being signed by the investor given that the necessary security precautions have been taken by the authorized institutions. The Communiqué also introduces a new provision providing that book building does not actually mean that the investor’s demands will be met. The investors are also given the right to amend or cancel their demands within the book building period.

Another important change implemented by the Communiqué is that stock under the BIST-30 index, Eurobonds and private sector debt instruments traded at the stock exchange are added to those assets which can be blocked by the investors in public offering of capital market instruments.

The Communiqué also re-regulates the principles regarding allocated sales of capital markets instruments by increasing the maximum number of investors (real person and/or legal entity investors) allowed to buy instruments through an allocated sale from 100 to 150, in compliance with the EU legislation.

Moreover, the Communiqué provides that a minimum 20% of the total nominal value of capital markets instruments which will be publicly offered shall be allocated to domestic corporate investors

Incentives applicable to public offerings have also been regulated under the Communiqué. In this respect, the Communiqué allows the capital markets instruments to be sold to certain investor groups at different prices given that the difference between the public offering prices shall not exceed 20%.



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