Turkish Beneficial Ownership Disclosure Rules Tighten Grip on Investors

Turkey’s capital markets regulator has introduced revised communiqué on the disclosure of material events, imposing stricter requirements on shareholding disclosures and transactions involving Turkish or foreign listed companies. This move is expected to strengthen the grip on investors in the country’s securities market.

Key Changes in the Revised Communiqué

• Stricter Disclosure Requirements: Any acquisition or disposal that causes a holding to reach, exceed, or fall below specific thresholds (5%, 10%, 15%, 20%, 25%, 33%, 50%, 67%, or 95% of total voting rights or share capital) must be disclosed by the Central Registry Agency (MKK) via the Public Disclosure Platform on behalf of investors.
• Group Holdings: Investors acting together with other investors and keeping their holdings on separate MKK accounts linked to different tax IDs or Turkish national ID numbers are required to disclose the relevant threshold crossing through the MKK’s Public Disclosure Platform.
• Memorandum of Information: Corporations whose shares are traded in the exchange must prepare and issue a memorandum of information for shareholders under certain conditions, including share sales exceeding 10% of capital within any period of twelve months.

Consequences of Non-Compliance

Non-compliance with the new rules may result in verbal or written cautions from the Capital Markets Board and could lead to suspension of trading, as well as imposition of penalties. Investors are advised to carefully review the new regulations and seek professional advice before making any transactions in Turkish listed companies.

Impact on Foreign Investors

As Turkey continues to strengthen its grip on investor disclosures, it remains to be seen how this will impact foreign investors and the overall stability of the country’s securities market. Compliance with Turkey’s beneficial ownership disclosure rules will be more stringent than ever before.