Turkey
Answer ... Financial instruments issued by way of public offering or sales to qualified investors can be listed on Borsa Istanbul only if they meet the criteria set out in the Listing Directive. Different listing requirements apply to different capital markets instruments – such as equities, debt securities, lease certificates and structured products – as per the directive.
To list shares issued via public offering, Borsa Istanbul requires the following criteria to be satisfied:
|
BIST Star Market |
BIST Main Market |
BIST Sub Market |
Minimum free-float market value |
At least TRY 1 billion |
At least TRY 250 million |
At least TRY 100 million |
Minimum free-float percentage |
10% |
20% |
25% |
Minimum presence of net income |
Last 2 years |
Last 2 years |
Last 2 years |
Minimum equity/capital ratio |
Larger than 1 |
Larger than 1 |
Larger than 1.25 |
Further to the above, the following criteria must also be satisfied by a public company in order for its shares to be listed via public offering:
- It must have been incorporated at least two calendar years ago;
- Its financial situation must be sufficient to carry on its business operations;
- Its shares must not be restricted by any encumbrances that preclude shareholders from exercising their shareholding rights;
- It must not have suspended its activities for more than three months or been involved in any liquidation, bankruptcy or similar cases during the past year, other than for reasons acceptable to Borsa Istanbul;
- It must not be involved in any significant legal disputes; and
- It must provide audited consolidated accounts that comply with Turkish accounting standards and the requirements of the Capital Markets Board.
If debt securities or shares are offered to public, the issuer must prepare a prospectus and seek approval from the Capital Markets Board for both the shares and debt securities to be offered. However, if debt securities are exclusively offered to qualified investors, the issuer is exempt from the requirement to prepare a prospectus; instead, it need only prepare an issue document subject to the Capital Markets Board ’s approval and can be listed by Borsa Istanbul once the Capital Markets Board has approved the issue document. There are no other Borsa Istanbul requirements for the listing of securities issued solely to qualified investors.
Detailed listing criteria for each financial instrument are outlined separately in the Listing Directive. The listing requirements applicable to debt securities to be issued through public offering are similar to those applicable to shares. The listing requirements for debt securities, however, do not apply in the following circumstances:
- The issuer’s shares are traded on BIST Star Market, BIST Main Market or BIST Sub Market;
- The issuer is a bank licensed by the BRSA and the BRSA has granted its prior consent to the issue of debt securities; or
- The issuer is an investment institution subject to the Capital Markets Law.
Turkey
Answer ... Communiqué on Shares No. VII-128.1 (“Communiqué on Shares”) states that if a public company’s shares which are not traded on an exchange or newly issued shares as a result of a capital increase by way of limiting the pre-emptive right of shareholders are intended to be offered to the public, a secondary offering application accompanied by a list of documents must be submitted to the Capital Markets Board within 30 days as of the date of the resolution approving the secondary offering. Secondary public offerings are still subject to the prospectus requirement. The prospectus and other documentation indicated in Communiqué on Shares must be submitted to the Capital Markets Board for approval. A listing application must be submitted to Borsa Istanbul before trading in addition to the Capital Markets Board application. There are no restrictions or exemptions to be noted on this matter as set out under Communiqué on Shares.
Turkey
Answer ... Listing structures are not explicitly defined under the Listing Directive. However, listing conditions vary depending on the market and the offering method:
- Debt securities and lease certificates issued for sale to qualified investors are listed following approval of the prospectus by the Capital Markets Board and after completion of sales without any further assessment by Borsa Istanbul.
- Capital markets instruments issued by the Central Bank of Türkiye or the Ministry of Treasury and Finance are traded without being listed on the exchange without any further decision or transaction.
- As a fast-track listing, capital markets instruments traded on the main markets of foreign exchanges may be unconditionally listed and traded, provided that the prospectus or issue document is approved by the Capital Markets Board.
Turkey
Answer ... Borsa Istanbul has separate requirements for each type of security mentioned in the Listing Directive. However, the listing requirements for bonds issued through public offerings do not differ significantly from those for shares.
There are two different methods for listing bonds:
- The issuer can file an application to the Capital Markets Board for a one-off issue covering a pre-determined amount of debt securities in full; or
- The issuer can file an application to the Capital Markets Board covering all issues to be made in ranks up to a certain ceiling to be approved within a certain period of time. In such cases, the issuer must file an application with Borsa Istanbul for trading on the Debt Securities Market.
Debt securities such as bonds issued for sale to qualified investors are listed following approval of the prospectus by the Capital Markets Board and after completion of sales without any further assessment by Borsa Istanbul.
Turkey
Answer ... Typically, legal advisers, auditors and intermediary institutions are involved in the listing process. They are involved in:
- filing to the Capital Markets Board, Borsa Istanbul and MKK;
- drafting and reviewing the issue documents; and
- communicating with the relevant authorities.
These advisers are responsible for any incorrect, misleading or incomplete information in the reports they prepare. Additionally, intermediary institutions which have acted without due diligence can be held responsible for their part in any loss caused that cannot be indemnified by the issuer. Their liability is secondary and flows directly from any negligence on their part.
Turkey
Answer ... The conditions imposed by Borsa Istanbul for the listing of each financial instrument are well written and clear. Apart from these, there are no legal factors that must be considered when deciding on a listing strategy.
With regard to market trends, the equity markets continue to grow as there is strong demand for initial public offerings (“IPOs”) in Türkiye. As more companies apply for IPOs, investor demand for the equity markets is expected to increase. This should be considered when deciding on a listing strategy.
Turkey
Answer ... Delisting is regulated by:
- the Capital Markets Law;
- the Borsa Istanbul Listing Directive; and
- the Borsa Istanbul Regulation on Principles Regarding Stock Exchange Activities.
Companies, issuers and fund founders may voluntarily apply to Borsa Istanbul and request delisting of their capital market instruments as per the relevant Capital Markets Board legislation. Following this request, such instruments may be delisted subject to the decision of the Borsa Istanbul board. Capital markets instruments that expire or are redeemed will be deemed to have been delisted from Borsa Istanbul on the date of expiry or redemption, without the need for any action to be taken.
Borsa Istanbul may delist the securities of a company on a permanent basis if it breaches its ongoing obligations or the listing requirements, subject to the decision of the Borsa Istanbul board. Situations that require compulsory delisting are outlined in detail in Borsa Istanbul’s Listing Directive.
The Capital Markets Board is authorised to delist a company if it is in violation of its obligations under the capital markets legislation.
Turkey
Answer ... In Türkiye, securities are subject to both the declaration regime and the provisional tax regime.
Under the declaration regime, corporate tax is collected at a rate of 25% on corporate profits. However, corporate tax is collected at a rate of 30% on the corporate earnings of:
- banks;
- companies that fall under the scope of the Law on Financial Leasing, Factoring and Financing Companies No.6361;
- electronic payment and money institutions;
- authorised foreign exchange institutions;
- asset management companies;
- capital markets institutions;
- insurance and reinsurance companies; and
- pension companies.
For companies (except financial institutions) that offer their shares to the public for the first time at a minimum of 20%, the corporate tax rate is applied with a two-point discount for five accounting periods starting from the public offering.
Under the provisional regime, a withholding tax is applied – mainly by brokerage firms, banks and custody banks. The corporate profits derived from a listing of shares on the stock exchange fall under the provisional regime and are subject to withholding tax at a rate of 0% under current Turkish tax law.
While non-resident legal persons are solely subject to Turkish tax on trade income made through a permanent establishment or income sourced in Türkiye, resident legal persons are subject to Turkish tax on their worldwide income. Resident natural persons must declare any income generated through interest payments of debt securities issued outside of Türkiye if such income exceeds the relevant rate, which is publicly announced each year according to the revaluation rate.