Turkey’s Banking Regulation and Supervision Agency (“Agency”) has amended regulations governing asset management companies. Changes effect establishment principles, fields of activity, operating licences, amending articles of association, share transfers, corporate management and information system. The Regulation Amending the Regulation on Principles Regarding Establishment and Activities of Asset Management Companies (“Amendment Regulation”) was published in Official Gazette number 29644 on 5 March 2016, entering into effect on the same date.

Significant amendments made by the Amendment Regulation include:

  • A minimum amount of paid-up capital is required during establishment of asset management companies. The amount increases from TRY 10,000,000 to TRY 20,000,000. Asset management companies must comply with this requirement by 31 December 2017.
  • If the documents required from foreign nationals for establishment and operation licenses cannot be obtained due to the absence of any authority or system in their country of residence, the Agency will now certify this situation with documents obtained from the authorities of the relevant country. If certification is not possible, the license applicant must make a written declaration in this regard.
  • The Banking Regulation and Supervision Board (“Board”) will grant operating licence to asset management companies, giving consideration to:
    • Whether the capital is paid in cash and free of any collusions.
    • The company’s ability to conduct the planned activities.
    • Establishment of appropriate service units alongside internal control mechanisms, accounting, data processing and reporting bodies.
    • Whether sufficient personnel strength is established for these bodies and whether appropriate job descriptions, duties and powers are determined for these employees.
  • Board permission is now required for:
    • Change of control.
    • Issuing new privileged shares.
    • Establishing privileges on existing shares.
    • Abolishing privileges.
    • Establishing usufruct rights.
  • Board permission is no longer required to transfer shares with usufruct rights.
  • Notification periods for general managers and board members of asset management companies increase from seven days to one month. Notification procedures are outlined in detail.
  • Regulations are introduced for establishing systems for internal control, information systems and risk management. Asset management companies must comply with these regulations by 31 December 2016.
  • Several changes are introduced regarding fields of activity for asset management companies.
  • Financial statements and statistical data must now be presented to the Agency within requested periods and via requested methods.
  • Grounds for cancelling operating licences have expanded. If an asset management company does not rectify its situation within the three month period granted by the Agency, the Board has discretion to cancel the operating licence, giving consideration to certain criteria.

Please see this link for the full text of the Amendment Regulation (only available in Turkish).

Information first published in the MA | Gazette, a fortnightly legal update newsletter produced by Moroğlu Arseven.