Secondary legislation in Capital Markets Law (Sermaye Piyasası Kanunu)
→ Gül Belevi
The New Capital Markets Law (CML) No. 6362 entered into force on 30 December 2012. Following its entry into force, and within the context of several references made (eg, Art. 6 on the approval and publication of prospectus procedure) to the role of the Capital Markets Board (Sermaye Piyasası Kurulu) to determine terms and procedures, secondary legislation is rapidly being issued.
Within the scope of secondary legislation, some of the communiqués have been amended, such as the amendment to the Corporate Governance Regulation of 30 December 2011 on election of independent board members and resolutions of vital transactions. On the other hand, the CML published several communiqués in June and July that supersede the former communiqués and introduce significant novelties under the CML, such as the Communiqué on Sale of Capital Markets superseding the 3 April 2010 communiqué on the same matter. There are still draft communiqués regarding “special cases”, “registered capital system”, and “repurchased shares” that were published in September for public review. Such drafts and the remaining secondary legislation should be completed within one year, by the end of 2013 as per the CML. To illustrate some significant changes elaborately described under the secondary legislation, the below communiqués can be examined.
Communiqué on Prospectus and Certificate of Issue
Contrary to the registration mechanism in the previous Capital Markets Law, the CML sets forth an approval mechanism for public offerings. The CML has granted to the Capital Markets Board the duty to determine the minimum requirements for a prospectus, form of the prospectus, public disclosure requirements, exemptions and sale conditions, etc.
For instance, as per the communiqué, the Capital Markets Board determined that there is a prospectus exemption for public offers made to investors obtaining capital markets instruments of at least TRY 250,000 per investor and public offers of the capital markets instruments having a unit nominal value of at least TRY 250,000. Additionally, as per the communiqué, excluding initial public offers, an exemption may be granted if the aggregate amount of capital markets instruments subject to public offer is below TRY 5 mln.
The terms and conditions on conditional capital increase and capital increase by issuing shares below nominal value have been described in detail under the Share Communiqué No. VII-128.1, which superseded (i) the Communiqué on Capital Markets Board Registration and Sale of Shares, (ii) the Communiqué on Non-voting Shares, and (iii) the Communiqué on Participation Dividend Certificates.
Publicly held companies may issue shares from a price below the nominal value if the weighted average stock exchange price of shares is below the nominal value of the shares within the last 30 days before the public disclosure date of the capital increase resolution.
In parallel with the provisions of Turkish Commercial Code, enacted on 1 July 2012, the conditional capital increase of publicly held companies has also been described under the Share Communiqué. If the purchase of new shares is restricted and other conditions specified under the Share Communiqué are met, publicly held companies may make conditional capital increases.
Draft Communiqué on Repurchase of Shares by the Companies
In parallel with the Turkish Commercial Code, publicly held companies may purchase their shares or accept the shares as a pledge. The Capital Markets Board is authorised to designate the terms and procedures in this respect. The draft communiqué envisages that the repurchased amount cannot exceed 10% of the paid capital and 25% of the shares in circulation. The draft is currently open to public view.