The Capital Market Board has issued a statement on the procedures and principles for the secure issuance of capital market instruments – Financial Services

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In the Communiqué on procedures and principles relating to the guaranteed issue of capital market instruments (“Communiqué”), which was issued by the Capital Market Council (“Council”), the procedures and principles relating to the guaranteed issue of capital market instruments, the assets that can be guaranteed, the collateral management contract, the rights and obligations of the issuer and the collateral manager are regulated.

The said Communiqué entered into force after its publication in the Official Journal of January 26, 2022 and numbered 31731.

In this context, the regulations relating to the secured issuance of capital market instruments are as follows:

  • Issuers may guarantee capital market instruments to be issued, with certain assets determined by the Board. Depending on the event, the Board may also impose the guarantee of issued capital market instruments.

  • In case of guaranteed issuance of capital market instruments, the ownership of the assets subject to collateral may be transferred to the collateral manager or a limited right in rem may be established on these assets in favor of the collateral manager in order to fulfill the obligations of the transmitter. resulting from these instruments at maturity.

  • The condition stipulated for commencing the sale of the capital market instrument with collateral is the completion of transactions regarding the transfer of ownership of the assets subject to collateral to the collateral manager or the establishment of limited rights in rem over those this in favor of the Collateral Manager.

  • The secured assets must be differentiated from the assets of the collateral manager and no lien, pledge or other seizure can be placed on these assets, even for public debts and they cannot be registered in the bankruptcy estate.

  • The collateral manager cannot be a related party to the issuer.

  • The collateral manager must be a licensed institution with general depositary authority under the legislation.

  • In the event of default, or for other reasons provided by law or the terms of the agreement, the collateral manager may sell the assets subject to the collateral and allocate the proceeds among the investors, without notice or condition. .

  • The collateral management agreement is terminated in cases where the payment obligation arising from the issuance of the collateralized capital market instrument is fulfilled, the capital market instruments are redeemed or the payment transactions to perform to investors by converting collateral assets into cash is complete.

  • Public disclosure requirements on secured instruments are also regulated by the communiqué.

Please see this link for the full text of the press release published in the Official Journal of January 26, 2022 and numbered 31731 (only available in Turkish).

Information first published in the
MA | newspaper, a bimonthly legal newsletter produced by Moroğlu Arseven.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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