Client Alert:



The Turkish Banking Regulation and Supervision Agency (“BRSA”) issued a new regulation on 7 May 2020, which lists the actions and transactions that will be considered as manipulating and/or misleading financial markets (“Regulation”). The Regulation follows the amendment to the Banking Code, which came into force a little over 2 months ago, on 20 February 2020 (“Amendment”). The recent Amendment introduced “manipulation and misleading transactions” into the Banking Code, before which there was no legislation that addressed such practices. Filling a gap in Turkish banking and finance law, the Amendment also imposes a monetary fine to those engaging in such practices.

The Amendment provides a brief description of “manipulation and misleading transactions” as banking transactions and practices carried out by Turkish banks and the Turkish branches of foreign banks (“Banks” or each a “Bank”) that aim to (i) create an artificial supply, demand or pricing (including currency exchange rates), (ii) spread false or misleading information by various methods including via the internet, (iii) influence interest holders by using false or misleading methods, or (iv) engage in similar transactions or practices for these purposes. If Banks engaging in manipulation or misleading transactions benefit from these acts, an administrative monetary fine of up to 5% of the relevant Bank’s total income may be imposed by the BRSA Committee. When determining the amount of the fine, the total end-of-year income including interest, profit share income, collected fees and commissions and income from other banking services are all taken into account. In addition, the monetary fine imposed cannot be less than twice of the amount of the benefit gained.

The Regulation complements the Amendment by setting out a list of practices and transactions which are to be considered as manipulation or misleading transactions. The following is a list of punishable actions by Banks:

  • To participate in, intermediate and instruct/order transactions or engage in similar acts with a view to:

a. creating a false impression regarding the supply, demand or price of a financial instrument, or maintaining the price of a financial instrument (including foreign currency exchange rates and interest rates) at an abnormal or artificial level, with the intent to do so;

b. impact the price of a financial instrument or the reference values such as interest, currency exchange rate, CDS, increasing the instability or negatively effecting the stability of financial markets, by taking advantage of the fluctuations within the financial markets or a shallow market, during periods in which the supply/demand balance does not occur in normal circumstances; or

c. impact the price of a financial instrument including currency exchange and interest rates by way of a deceptive mechanism or construct.

  • To carry out or intermediate transactions or practices to circumvent or negate the BRSA Committee’s decisions or restrictions regarding swaps, forwards, options and other such transactions provided to residents abroad with one leg in Turkish Liras and one leg in foreign currency or regarding liquidity provided in Turkish Liras by banks, by indirect methods including early redemption, postponement of due payments and/or failure to fulfil obligations.
  • To spread false or misleading information or rumours that may create a false or misleading impression as to the supply, demand or price of a financial instrument (including currency exchange or interest rates) or maintain this price at an abnormal or artificial level, via mass media including the internet.
  • To express an opinion via the internet or other mass media on a financial instrument, with regard to which a position is already taken, by hiding the conflict of interest from the public and to impact the price of the same financial instrument (including currency exchange or interest rates).
  • To pass on false or misleading information on a reference value, to enter false or misleading input or to engage in any practice to manipulate the calculation of a reference value, where the false or misleading nature of these are known or should have been known.
  • To engage in practices with the aim of fixing the buying or selling prices of a financial instrument or making other unlawful gains by using its influence over the supply or demand of a financial instrument.
  • To carry out buying or selling transactions affecting a financial instrument’s opening or closing prices (including currency exchange or interest rates) at the opening or closing of financial markets and to mislead or cause to mislead investors who took position in consideration of these opening or closing prices.
  • To influence the interest holders in a false and misleading manner.
  • To spread information and rumours which may cause a systematic risk by damaging the trust for the financial system.

While the literal interpretation of the Regulation suggests the above list is exhaustive, the practice of the BRSA Committee will be telling if that is indeed the case and whether these actions will be applied in a restrictive or broad sense, especially considering the umbrella wording of some paragraphs.

Please do not hesitate to contact our banking and finance team if you have any queries or if we can be of any assistance to you.


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