Recent developments

The Turkish Banking Regulation and Supervision Agency (the “BRSA”) has recently amended the "Regulation on Measurement and Evaluation of Capital Adequacy of Banks” (the "Capital Adequacy Regulation") effective as of June 6, 2017.

Overview of the Amendments

  • The amendments to the Capital Adequacy Regulation introduced material changes to the information reported every trimester by the İstanbul Takas ve Saklama Bankası A.Ş. (central counterparty) (“Takasbank”). The amendments concern the assets used in the determining the capital obligation risk for qualified bank transactions with Takasbank. Pursuant to the new provisions, additional information shall be included in these reports:
    • Along with the total amount of assured guarantee funds of every member institution, the total amount of capital obligation before refinement and intensification of guarantee fund in the quarterly report; and
    • The capital factor applied to over assured guarantee funds.
  • Previously, banks were liable for estimating the total amount of capital obligation covering the risks within the guarantee fund. The estimated amount was sent to the BRSA within seven days after receiving Takasbank's notice. Under the amended Capital Adequacy Regulation, bank notification was deemed to be unnecessary, since both Takasbank and the banks were providing the same calculations to the BRSA. From now onward, only Takasbank will be responsible for providing the related notification to the BRSA.
  • Lastly, Takasbank is obliged to provide the assets used in determining the capital obligation risk of the qualified bank transactions with Takasbank once every three months. In case of any change to these risks, Takasbank must recalculate the information and report it immediately to the BRSA and the member institutions, regardless of the three-month period.

Conclusion

The amendments have changed the scope of banks' and Takasbank's notifications and their related responsibilities. Banks are no longer under the obligation to provide certain information to the BRSA, as Takasbank submits the same information.