Neslihan Tuna Saracgil September 19 2022 Public disclosure obligations of public companies Selvi Attorney Partnership | Corporate & Commercial - Turkey Neslihan Tuna Saracgil Corporate & Commercial BackgroundDirectors' responsibilitiesShareholders' responsibilitiesCommentFor public companies, the obligation to disclose governance information to investors in a timely, complete and accurate way is important to ensure that capital markets remain reliable, transparent, efficient, stabilised, fair and competitive.BackgroundIn Turkey, the following legislation exists to govern the public disclosure obligation:the Capital Markets Law;II-15.1 Communiqué on Material Events Disclosure; andthe Implementation Guide, published by the Capital Markets Board (CMB).According to the Communiqué, information, events and developments that may affect the value and price of capital market instruments, or the investment decisions of investors, are considered as "inside information" and with the certain exceptions, it is obligatory to disclose the inside information to the public as soon as it emerges or is learned.Article 4 of the Communiqué stipulates that the authorisation to take managerial decisions that will impact an issuer's future development and commercial targets belongs to persons who are responsible for discharging managerial responsibilities, namely:members of board of directors of an issuer; andthose who have regular direct or indirect access to inside information as regards an issuer.Therefore, a shareholder who has access to inside information has the same responsibilities as directors in this regard.Generally, all transactions that are executed by the following persons must be disclosed to the public by the executor without prejudice to the provisions of the second paragraph of article 4 of the Communiqué:those with administrative responsibility;those who are closely related to such persons; andthe issuer's parent company.Directors' responsibilitiesThe Communiqué stipulates the situations in which a board of directors' decision must be made. Such a decision is especially important where a public disclosure must be delayed.Further, forward-looking statements can only be disclosed to the public following the board of directors' approval. The board of directors also determines the necessary procedures for effective implementation of public disclosure practices.Shareholders' responsibilitiesWhere direct or indirect shares or voting rights of a natural person or legal entity (or other natural persons or legal entities that act together with that natural person or legal entity) in the capital of a publicly traded issuer reach or fall below the following figures, the disclosure obligation is performed by the above persons or entities:5%;10%;15%;20%;25%;33%;50%;67%; or95%.Alternatively, where direct or indirect shares or voting rights of investment funds that belong to a founder in the capital of an issuer reach or fall below the same figures, the disclosure obligation belongs to the founder.CommentThe legislation regarding the public disclosure obligation does not state every situation in which a public company must make a disclosure. Instead, it states that information, events and developments that may affect the value and price of capital market instruments, or the investment decisions of investors, shall be disclosed with certain exceptions.Although the following does not constitute inside information, it is obligatory to make a public disclosure relating to:the board of directors' resolution as regards the date, time, place and agenda of the general assembly meeting;information as regards the right to attend the general assembly and total voting rights;the board of directors' or the general assembly's decision on profit distribution;the minutes of the general assembly meeting and the list of attendees, as determined by the CMB;the non-event of the general assembly meeting and information regarding the reason for this, as well as the date of the next meeting; andinformation about:the board of directors' decision regarding the issuance of new shares;the use of new share purchase rights;the cancellation of the shares issued due to capital increase; andthe replacement process in cases where there is a right to change.For further information please contact Neslihan Tuna Saracgil at Selvi Attorney Partnership by telephone (+90 212 258 40 40) or email ([email protected]). The Selvi Attorney Partnership website can be accessed at selvilegal.com.