On November 27, 2015, the Capital Markets Board of Turkey published Resolution No. 128.11, clarifying the underwriting regime for Turkish IPOs. Now, if an underwriter subscribes for publicly-offered shares during the book‑building process, the shares are deemed to have been acquired as part of its underwriting obligation.
For an IPO in Turkey, an underwriter must undertake to acquire the issuer's shares if the value of the offered shares is:
- Below TRY 20 million (~USD 6.75 million), in which case all of the unsold shares must be underwritten.
- Between TRY 20 million and TRY 40 million (~USD 13.5 million), in which case all of the shares up to TRY 20 million and half of the unsold shares from TRY 20 million to TRY 40 million must be underwritten.
An underwriter acquiring shares as part of its underwriting obligation cannot sell the shares purchased at a price less than the public offering price for at least six months following the public offering.
Prior to the new resolution, while an underwriter could subscribe for an issuer's shares during an IPO book-building process, it was not clear whether those shares could be applied to its underwriting obligation. The resolution now makes clear that those subscribed shares, in fact, apply to satisfying the underwriting obligation.