On 15 December 2017, the Electricity Market Regulatory Authority (the “EMRA”) amended the existing electricity market license regulation (the “Regulation”) to cover, among others, the following topics (the “Amendment”):

1. Transfer of Shares

The Regulation provides that, with certain exceptions, (i) any direct or indirect acquisition of shares representing 10% or more of the share capital of an entity holding a Turkish electricity production license (the “License Holder”) (or 5% or more if the License Holder is a publicly-traded company), and (ii) any share transfer resulting in a change of control of the License Holder, or any transaction with a similar effect to a change of control, shall be subject to EMRA’s prior written consent. Once such consent is obtained, the transaction needs to be completed within six months from the date of such consent.  In this respect, the Amendment has introduced the following new requirements applicable to License Holders:

a. Within three months from completion of a transaction requiring the EMRA’s written consent, the License Holder must apply to amend its license.

b. In the event of a change in the shareholding structure of a License Holder’s non-Turkish legal entity shareholder which results in either (i) an indirect change in the shareholding structure of the License Holder, or (ii) a change of control ofthe License Holder or any transaction with similar effect to a change of control, the License Holder must notify the EMRA within one year from such change and request an amendment to its license within six months from the date of notification to the EMRA1.

c. Within six months from the date of any other share transfers (that do not require the EMRA’s prior written consent), the License Holder must request a license amendment to the extent necessary to reflect any changes in its shareholding structure.  We understand that, with these changes, the Amendment aims to ensure that the electricity market license and underlying records provide the latest shareholding structure.

2. New Exceptions to the Restriction on Share Transfers

The Amendment has brought two new exceptions to the restriction on pre-license holders transferring shares during the pre-license period. The Regulation now allows share transfers, resulting in a direct or indirect change in the shareholding structure of a pre-license holder, which are undertaken (i) between married couples or first-degree relatives, or (ii) by the Savings Deposit Insurance Fund following its seizer of the management powers of the pre-license holder.

3. Data Protection Obligation

Prior to the Amendment, License Holders were obliged to have their data centres in Turkey or appoint services provides with data centres located in Turkey. The Amendment replaced this obligation with the requirement to take appropriate security measures to prevent any illegal access to, or processing or transmission of data in, the data centres (which the Licence Holder may operate itself or use a third party centre)2.