On July 21, 2016, the Turkish Capital Markets Board (the “CMB”) decided to remove the limits under the Communiqué on Share Buy-backs (the “Communiqué”) that are applicable to public companies’ acquisition of their own shares. This measure is part of the CMB’s efforts to minimize and mitigate the negative effects on the shares traded in the Borsa Istanbul (“BIST”) by the attempted coup that took place on July 15, 2016. The decision seeks to stabilize the prices of the shares traded on the BIST, preventing any artificial decrease as a result of the coup attempt.
What the decision says
- Public companies that do not currently have any share buy-back programs can acquire their own shares from the stock exchange without being subject to any limit under the Communiqué provided that they publicly disclose any such trade.
- Public companies that have a share buy-back program can acquire their own shares from the stock exchange without being subject to any limit under the Communiqué provided that they publicly disclose the trade and duly inform their authorized bodies of this acquisition.
The CMB is closely following the latest political developments in Turkey and is eager to adopt any necessary measure to ensure the smooth operation of the Turkish capital markets and to avoid any fluctuations that might negatively affect investors. The abovementioned measures undertaken by the CMB are significant means of protecting investors by giving public companies the chance to stabilize the value of their own shares. Turkish equity share prices have fallen following the attempted coup and President Recep Tayyip Erdoğan’s recent announcement of a state of emergency within the country. The CMB’s expedient decision symbolizes its intention to protect the Turkish capital markets and commitment in strengthening the Turkish stock exchange as a developing financial hub.