Regulations have been amended in Turkey to ensure the independence and neutrality of credit rating activities. Regulatory changes also address credibility and reliability checks, exemptions for international credit rating agencies in Turkey, rating methodologies, as well as notice submissions. The Regulation Regarding Changes to the Regulation Regarding Authorization and Activities of Rating Institutions (“Amendment Regulation”) was published in Official Gazette numbered 29599 on 20 January 2016, entering into effect on 31 March 2016.
Significant changes introduced by the Amendment Regulation include:
- Credibility and reliability checks are regulated in detail for credit rating agencies.
- New conditions are introduced to become an authorized credit rating institution. Candidates must be authorized for credit rating by the Capital Markets Board (or relevant foreign banking authority) and meet certain regulatory criteria related to fundamental principles, professional competence and independence.
- The Banking Regulation and Supervision Agency’s (“BRSA”) authority is removed for granting exemptions to the Turkish agencies of international credit rating institutions regarding certain obligations.
- Documents and information required during authorization applications are reorganized.
- Methodologies used by authorized credit rating institutions must be verified and approved internally, or by consultancy firms or academics with necessary experience and qualifications, on at least an annual basis.
- The scope of publicly disclosures for authorized credit rating agencies has been widened to include information about charges and ethical principles.
- Credit rating institutions cannot announce another rating institution’s rating as their own rating, regardless of the relationship between the institutions.
- Authorized credit rating institutions must now also report information about rating levels (and other information BRSA requests) to the risk center in order to be shared with banks.
Please see this link for 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.