Recent Development
In our latest client alert, we explained the implications of the recent exemption introduced by the Borsa Istanbul A.Ş. (“Borsa Istanbul”) for companies that do not meet certain financial requirements for listing on the Star Market. The July 31, 2017 amendment to the Borsa Istanbul Listing Directive (the “Directive”) also introduced new products to be listed on Borsa Istanbul and clarified that the securities issued by the Turkish Sovereign Wealth Fund (Türkiye Varlık Fonu) (the “Sovereign Fund”) will also benefit from the privileged listing process granted to the securities issued by the governmental authorities.
What’s new?
- The Directive introduces new types of securities that can be listed on the Collective and Structured Products Market and the Equity Market for Qualified Investors. This is the second wave enlarging the product range of these markets. The October 25, 2016 amendments allowed for the listing of real estate certificates and lease certificates1 in these markets. The new amendment allows the listing of (i) venture capital investment fund certificates; (ii) real estate investment fund certificates; (iii) structured products other than investment firm warrants (yatırım kuruluşu varantları) and investment firm certificates (yatırım kuruluşu sertifikaları) in these markets. The Directive also grants the Borsa Istanbul’s Board of Directors the authority to determine other securities for listing on the two markets.
- Securities that are eligible for listing on the Collective and Structured Products Market will be listed on the Equity Market for Qualified Investors if they are offered to qualified investors.
- Previously, real estate certificates were listed on the relevant market immediately following the Capital Markets Board’s (the “CMB”) approval of either the certificates’ offering circular or issuance certificate, without requiring the Borsa Istanbul’s review. Pursuant to the recent amendments, the CMB will now consider the Borsa Istanbul’s opinion when reviewing the application.
- The securities issued by the Sovereign Fund, its sub-funds, the management company or the companies established or mandated by the management company will be listed on the relevant market without any additional review or decision.
Conclusion
In an effort to strengthen Istanbul’s position as a financial center, the Borsa Istanbul is now offering investors and issuers a wider range of securities options through deepened and diversified product categories. Accordingly, the new product categories and easier offering opportunity are expected to increase the trading volume and issuance of securities in the Borsa Istanbul.
1 The Borsa Istanbul decides which lease certificates are listed on the Equity Market for Qualified Investors depending on the lease certificates’ features.
