CapitalMarkets Law
Legal work relating to public offerings, debt instruments, equity market obligations and the regulations of the Capital Markets Board.
Capital markets law covers the issuance of securities, the obligations of companies traded on the stock exchange, investment services and the rules protecting market integrity.
Scope
Capital markets law covers the issuance and public offering of shares and debt instruments, the trading of these instruments on the stock exchange, the obligations of publicly held companies, the activities of institutions such as brokerage firms, portfolio management companies and investment funds, and the rules protecting market integrity. The principal legislation is Capital Markets Law No. 6362. Regulatory and supervisory authority lies with the Capital Markets Board (SPK); the detailed rules are largely set out in the Board’s communiqués. Publicly held companies are also subject to the provisions of Turkish Commercial Code No. 6102 on joint stock companies.
The fundamental aim of the regulations is the protection of investors and the transparent, fair and stable functioning of the markets. For this reason, the principles of equal disclosure, non-abuse of inside information and market integrity form the basis of many regulations applicable to publicly held companies and intermediary institutions. The market infrastructure is formed by institutions such as Borsa İstanbul, the Central Registry Agency (MKK) and Takasbank; trading, registration and clearing rules are set out in the regulations of these institutions. Provisions on crypto asset service providers have also been added to Law No. 6362, and these entities likewise fall within the Board’s remit.
Frequently encountered matters
- Legal preparation for the public offering process; prospectus and issuance document (Communiqué on Prospectus and Issuance Document).
- Issuance of debt instruments, capital increases and the registered capital system.
- Material event disclosures via the Public Disclosure Platform (KAP).
- Compliance with corporate governance principles and independent board members.
- Mandatory and voluntary tender offers; change in management control.
- Significant transactions and the right of exit; squeeze-out and sell-out rights.
- Allegations of use of inside information (insider trading) and market fraud.
- Operating licences for brokerage firms, portfolio management companies and investment funds.
- Disputes between investment institutions and investors.
- SPK administrative sanction decisions and the remedies available against them.
Process and points to note
Public offering and issuance transactions rely on the preparation of the prospectus or issuance document submitted for the Board’s approval; the content of the document, the financial statements and the independent audit reports are important at this stage. The issuer and the responsible persons are liable for the accuracy of the information contained in the document. Companies traded on the stock exchange are required to disclose material events to the public in accordance with the procedure in the Communiqué on Material Events; the timing and content of a disclosure may later become the subject of a dispute.
Market-disruptive actions are subject to administrative sanctions under Art. 104 of Law No. 6362. Insider trading (Art. 106) and market fraud (Art. 107), by contrast, carry criminal penalties; for these acts, criminal investigation and administrative sanction proceedings may run in parallel. As the Board’s requests for information and documents, letters requesting a defence and on-site inspections may be subject to short response periods, the date and time limit of every letter served are determined immediately.
The remedy against Board decisions and its time limit vary according to the type of decision; for administrative acts, the time limit for bringing an action is, as a rule, sixty days (Administrative Procedure Law No. 2577 Art. 7), while for administrative fines the special route under the relevant law is checked separately. As communiqués are frequently updated, the current legislation is taken as the basis in each transaction. This information does not constitute investment advice.
Our office’s approach
The work consists of reviewing issuance documents, board resolutions and public disclosures for compliance with the legislation, monitoring correspondence with the Board and determining the time limits for challenging sanction decisions. Investment advice is not given.