Regulation Regarding Portfolio Management Companies

On February 18, 2023, Communiqué Amending the Communiqué on Principles Regarding Portfolio Management Companies and their Activities (III-55.1) ("Communiqué") (III-55.1.d) ("Amending Communiqué") was published in the Official Gazette dated February 18, 2023 and numbered 32108. With this Amending Communiqué, some articles of the original Communiqué have been amended or added.
 
Article 3 of the Communiqué, which includes the definitions, has been amended by the Amending Communiqué to include the full-time employment concept and defined as not being professionally engaged in any other business and being on duty in a continuous manner. The definition of Sub-portfolio Management has been revised as being performed by a Company authorized by the Board or an authorized institution abroad.
 
The Amending Communiqué also updates the monetary provisions regarding capital. The initial capital for the establishment of Portfolio Companies has been increased and it is now regulated to be at least TL 30,000,000. In terms of the size of the portfolio under management, the minimum capital amounts have been updated as follows:

• The minimum shareholders' equity of the Company up to TL 1,000,000,000 is TL 30,000,000,
•  The minimum shareholders' equity of the Company from TL 1,000,000,001 to TL 4,000,000,000 is TL 40,000,000,
• The minimum shareholders' equity of the Company from TL 4,000,000,001 to TL 36,000,000,000 is TL 50,000,000,
• The shareholders' equity of the Company exceeding TL 36.000.000.000 shall be at least TL 100.000.000,

shall be mandatory.
 
The Communiqué stipulated that if the size of the portfolio under management exceeded TL 15,000,000,000,000, additional equity equal to 0.02% of the excess amount should be held, whereas the Amended Communiqué set the monetary limit as TL 72,000,000,000,000.
 
With the Amending Communiqué, Article 15 of the Communiqué has been revised and the procedures and principles regarding the non-headquarter organizations of portfolio management companies have been determined. According to this article, the company's non-headquarter organizations are identified as agencies, branches and contact offices, and the definitions and establishment principles of the relevant organizations are explained. Furthermore, it is also regulated that the Company may open branches and contact offices in Turkey or abroad and may establish agencies with banks and intermediary institutions. The article in the Communiqué on registration and announcement obligation has also been updated accordingly. The Amending Communiqué regulates that the permissions to open a non-headquarter organization shall be announced on the KAP and the matter shall be registered with the relevant trade registry within 10 business days following the notification of the permission and announced in the Turkish Trade Registry Gazette.
 
Companies that have obtained permission for establishment or operation prior to the effective date of the Amending Communiqué are obliged to bring their organizational structure into compliance with this Amending Communiqué until 30 June 2023 at the latest.
 
The Amending Communiqué shall be executed by the Capital Markets Board and has entered into force as of its publication date, February 18, 2023.