CAPITAL MARKETS BOARD OF TURKEY

CAPITAL MARKETS
BOARD OF TURKEY
Regulatory and Supervisory
Authority for Turkish
Securities Markets
2
CONTENTS
Who We Are ..............................................................3
About the Capital Markets Board. ...............................3
Organizational Structure. ............................................3
Functional Structure - Departments .............................5
Staff Profile. ................................................................8
What We Do ..............................................................9
Whom We Regulate and Supervise… ..............……….11
Regulatory Framework ............ .................................11
International Relations.. ............................................12
Relations with the IOSCO......... ................................12
Relations with the EU… ..................................………..13
Relations with Other International Institutions.....…...14
Bilateral Memorandum of Understandings ................15
Statistical Data & Publications………… .............……….17
Selected Indicators of Capital Markets in Turkey …….18
Contact Details for the Capital Markets
Board and Other Relevant Institutions… ....................19
3
4
WHO WE ARE
Our vision is to be a leading, dynamic and internationally recognized regulatory and supervisory authority dedicated to sustained development of
capital markets in Turkey.
About the Capital Markets Board
The Capital Markets Board of Turkey (CMB) is the first regulatory and supervisory authority in charge of the securities and derivatives markets in Turkey. Empowered by the
Capital Markets Law (CML), which was enacted in 1981,
the CMB has been making detailed regulations for organizing the capital markets and developing market instruments and institutions.
The CMB licenses, regulates and supervises capital markets and institutions in Turkey. Its remit is to:
• Maintain fair, orderly and efficient capital markets,
• Ensure that investors are protected and receive
full,
accurate and timely information,
• Safeguard investments in capital markets.
Organizational Structure
The Chairman is the chief executive who is responsible for
the administration and representation of the CMB.
5
The Executive Board is the main decision-making body of
the CMB and is empowered to decide on any issue within
the authority of the CMB.
The Executive Board consists of seven members/commissioners. The Council of Ministers appoints two members
from among four nominees of the Ministry of State for
Economic Affairs. The other five members are appointed
from among the nominees of the Ministry of Finance,
Ministry of Industry and Trade, the Banking Regulatory
and Supervisory Board, the Association of Trade Chambers and Exchanges, and the Association of Capital Markets Intermediary Institutions. Each of these institutions
nominates two candidates, one of whom is to be elected.
All commissioners are appointed by the Council of Ministers for a period of six years. The Council of Ministers designates one of the members as the Chairman and the
Executive Board elects one member as the Deputy Chairman.
The Executive Vice Presidents are authorized and responsible for the coordinated operation and administration of
the entire organization.
The departments are organized according to their functions.
The organization chart of the CMB is given below:
6
CAPITAL MARKETS BOARD
7
Functional Structure - Departments
To implement its statutory objectives, the CMB set up 12
departments which are as follows:
Department of Enforcement
The Department of Enforcement supervises public companies, brokerage houses and other financial institutions operating in securities markets. The Department also assists
the CMB in enforcing securities regulations and investigates possible violations.
Department of Corporate Finance
The Department of Corporate Finance examines the applications of the corporations for issuing and public offering of securities and reviews documents that publicly held
corporations are required to file with the CMB and to disclose. Its mission is to ensure that investors are provided
with accurate and adequate material information in order
to make informed investment decisions.
Department of Intermediary Activities
The Department of Intermediary Activities is authorized and
responsible for reviewing and examining the applications of
the intermediary institutions to operate in the capital markets; and for ensuring the compliance of all regulated inter8
mediaries on an ongoing basis with capital adequacy and
disclosure requirements.
This department also regulates stock exchanges and other
organized markets where the capital markets instruments
are to be traded and gives advices to them; makes necessary regulations regarding the settlement, custody and dematerialization institutions and operations as well as the
investor compensation schemes and gradual liquidation.
Department of Institutional Investors
The Department of Institutional Investors mainly regulates
and supervises the establishment, operation and disclosure standards of collective investment institutions. It is
also responsible for registering the financial instruments
to be issued and offered to public by collective investment
institutions.
Department of Market Oversight and Enforcement
The Department of Market Oversight and Enforcement is
responsible for overseeing the secondary markets including the derivative markets, developing necessary regulations to ensure the efficient operation of secondary
markets, as well as developing surveillance systems for
oversight of trading in secondary markets.
9
Department of Research
The Department of Research undertakes economic and financial research studies, on local and foreign/international markets for the CMB to develop long-term
strategies and to take appropriate actions on the basis of
sound determinations. Identifying the needs of the capital
market system and making policy recommendation are
among the functions of this department.
Department of Accounting Standards
The Department of Accounting Standards carries out studies to establish general and private accounting standards
related to the institutions under the CMB’s remit, in line
with international standards. It also evaluates the applications of establishing independent auditing firms and rating firms that will operate in Turkey and supervises the
activities of independent auditing firms and the quality of
services they provide.
Department of Data Processing, Statistics and Information
The Department of Data Processing, Statistics and Information is responsible for forming a reliable and real database and setting up the system required for computerized
data processing. It supports the CMB in all aspects of information technology.
10
Department of Legal Consultancy
The Department of Legal Consultancy is actively involved
in the activities for drafting regulations within the authority
of the CMB. It provides advice on legal issues and represents the CMB in any litigation. The EU Affairs Group,
which acts within this department, carries out the CMB’s
European Union related affairs.
Department of Institutional Communications
The Department of Institutional Communications coordinates the CMB’s relations with the capital market institutions, public agencies, private sectors and the media at
national and international level, organizes local and international meetings and manages internal and external
communication programs.
Applications in accordance with the law on information
request and complaints from the public are also handled
within this department.
The International Relations Group, which coordinates the
CMB’s international relations, is part of this department.
Department of Strategy Development
The Department of Strategy Development carries out
studies to identify the CMB policy and targets, provides
strategic plan accordingly, reviews its implementation,
makes recommendations on how to further improve the
CMB’s activities, prepares progress reports, formulates
11
performance and quality evaluation and management criteria, carries out studies regarding job descriptions and
work procedures as well as enhancement of efficiency and
makes recommendations as to how the CMB budget be
prepared in accordance with the strategic plan and the
determined targets.
Department of Administrative and Financial Affairs
The Administrative and Financial Affairs Department
keeps accounts and prepares financial statements for the
CMB. It also cares for the CMB’s employee-related issues
such as: rights, retirement, health care, and social security
benefits.
Staff Profile
As of February 2011, the total number of employees at
the CMB is 550. The staff profile by position and its
breakdown by academic background can be summarized as follows:
12
STAFF OF THE CMB BY POSITION
EXECUTIVE BOARD...................................7
TOP MANAGEMENT ...............................35
PROFESSIONAL STAFF..........................281
Experts ..............................................217
Assistant Experts..................................64
EXPERTS (not included in
professional staff).................................155
ADMINISTRATIVE STAFF........................62
CONTRACT STAFF ...................................10
TOTAL....................................................550
STAFF OF THE CMB BY ACADEMIC BACKGROUND
zPhD.................................. 21
Master...............................215
Undergraduate ..................240
High School ........................ 51
Other.................................. 23
*As of February 2011
13
WHAT WE DO
Our main mission is to maintain safe, fair, transparent and efficient capital markets, protect the rights
and interests of investors, and facilitate the participation of public in economic development in an efficient manner.
TO ACHIEVE THIS, WE
Oversee
• all participants in capital markets industry including
the publicly held corporations, brokerage firms, collective investment institutions, stock and derivative exchanges, clearing and custody system and other
related agencies operating in capital markets.
Regulate
• capital markets, capital market institutions and instruments by establishing rules and making changes
when necessary in order to adapt our regulatory structures to new circumstances.
Issue
• guidelines in line with international standards of reg-
14
ulation.
Encourage
• corporate governance principles and best practices.
Monitor and Supervise
• all participants in capital markets industry to reduce
the risks of non-compliance with laws and regulations
and to ensure financial soundness.
• audit firms and rating agencies.
• financial statements and annual reports to verify disclosures made by corporations.
• all statutory filings submitted by licensed institutions
to ascertain their compliance with licensing and ongoing obligations.
• markets for market abuse such as: manipulation, insider trading and mis-selling of products by brokerage
firms.
Authorize
• all applicants, intermediary institutions, collective investment schemes, independent auditing firms and
15
rating agencies that meet the qualifications required
to operate and we require them to provide all financial statements and other information about themselves.
Register and Approve
• publicly held companies and capital market instruments to be issued or offered to the public, merger &
acquisitions, demerger, tender offers.
Enforce
• issues which are referred to the CMB after the investigations are taken up by the Enforcement Department.
serious breaches which will be brought before the
Public Prosecutor after the CMB has secured the necessary evidence through formal enquiries, examination of records and other methods that the CMB may
deem appropriate as a breach of legal requirements.
License
• professionals who will work in capital market institutions based on the results of licensing examinations.
The objective of these examinations coordinated by
our Licensing and Registration Group is to determine
16
the professional qualifications, capabilities, knowledge
and experiences of professionals working as specialists, managers, derivative instruments staff, real estate
appraisers, residence appraisers, credit rating specialists, corporate governance rating specialists and independent auditors in capital markets and to give the
successful candidates licenses in respective areas.
17
WHOM WE REGULATE AND SUPERVISE
The CMB licenses, regulates, monitors and supervises the conduct of business activities in the capital markets.
We regulate and supervise
• Corporations which have more than 250 shareholders or which offer their shares to the public and
whose shares are traded at the stock exchange. The
CMB registers the securities which are issued or offered to the public and is responsible for the regulation and supervision of the entire process.
• Capital market institutions which are defined in the
CML as (i) intermediary institutions (banks and brokerage firms); (ii) investment companies (including
real estate investment trusts and venture capital companies); (iii) mutual funds; (iv) other institutions (settlement, custody, rating institutions, independent
auditors, portfolio and asset management, investment advisory, real estate appraisal companies). • organizations and operations of stock and derivatives exchanges and other organized markets including precious metal exchanges.
18
Regulatory Framework
Main legal framework of Turkish capital markets consists
of three major legislations:
Capital Markets Law (Nr.2499)
Decree Law No. 91 concerning securities exchanges
Turkish Commercial Code
Other regulations which are related to the capital markets
are:
Decree No.32 on “protecting the value of the Turkish currency”
Regulation concerning the establishment and operation
principles of securities exchanges
Regulation on the Istanbul Stock Exchange (ISE)
Regulation concerning the establishment and operation
principles of futures and options exchanges
Law amending the laws related to housing finance system
19
INTERNATIONAL RELATIONS
As the CMB attaches great importance to bilateral and
multilateral international relations, in order to improve its
relations with international organizations, it is working
closely with foreign regulators and other related organizations such as the Organization of Economic Cooperation and Development (OECD), World Trade Organization,
World Bank, International Monetary Fund.
Besides these international organizations, the main focus
of the CMB’s international affairs is on information exchange work with foreign securities authorities and links
with the International Organization of Securities Commissions (IOSCO) of which the current CMB Chairman holds
the Emerging Markets Committee Chair position.
Moreover, cooperation with the European Union, due to
the Turkey’s candidate country status for EU membership,
constitutes the bulk of international work.
Relations with the IOSCO
Constituted by the regulatory/supervisory authorities in
securities markets around the world, IOSCO is an organization that ensures coordination and cooperation in related areas, promotes common standards of regulation
20
and supervision of global markets and enhances international cooperation and information sharing.
The CMB became a member of the IOSCO in 1988, since
then it has been involved in IOSCO operations. In this regard, the CMB has been actively participating, either as a
member or chair, in the work of main committees and
working groups within the organization and has been contributing to the constitution of policies in line with the realization of IOSCO’s goals and objectives.
Relations with the EU
In the context of Turkey’s candidate country status for EU
membership, screening process meetings were held for
preparation before entering into the negotiation process.
These meetings formed the framework in relation to the
latest situation of the related EU Acquis and identified the
issues to be completed within the Turkish legislation.
CMB’s main responsibilities for the harmonization of legislation involve the Free Movement of Capital, Financial
Services, Company Law and Economic and Monetary Policy of the EU Acquis. For this purpose, the CMB has been
conducting harmonization studies in coordination with relevant institutions and participating in related subcommittee meetings.
21
Furthermore, activities are being carried out in order to
benefit from the EU funds and other assistance made
available by the EU members for the alignment and implementation of the EU Acquis. In this context, the Twinning Project conducted with the German Federal Ministry
of Finance between 2006-2007 provided improvement in
legislative alignment. During the same period, a separate
technical assistance project was carried out to identify and
address the CMB’s needs for improvement in the field of
information technologies.
Moreover, regarding bilateral cooperation, three projects
were conducted with the Dutch Financial Markets Authority between 2007-2009 in order to strengthen the CMB’s
administrative capacity in relation to supervision. In the
scope of short-term EU funds, a project on IT Audit is
being conducted from November 2010, through March
2011. In the coming period, a new EU-funded technical
assistance project will be initiated with the purpose of legislative alignment in accounting, improvement of administrative capacity in relation to financial services, the
development of a licensing and training center and
strengthening the CMB IT infrastructure.
Apart from these projects, in relation to the alignment
with the EU Acquis and improvement of technical and
legal infrastructure of capital markets, various workshops,
22
expert missions and study visits are continuously being
conducted in cooperation with the Technical Assistance
Information Exchange Office (TAIEX) of the EU Commission.
Relations with Other International Institutions
• The Organization for Economic Co-operation
and Development (OECD)
The CMB, as the National Coordination Unit in the OECD
Corporate Governance Committee, closely follows OECD
studies, coordinates institutions and participates in the
meetings of National Coordination Units.
Furthermore, the CMB participates in the activities of the
Financial Markets Committee and the Small and Medium
Enterprises and Entrepreneurship Working Group and is
a member of the International Network on Financial Education (NFE).
• World Trade Organization (WTO) and The General Agreement on Trade in Services (GATS)
General Agreement on Trade in Services (GATS) has 11
basic service categories that also cover financial, fiscal and
banking services. The representation in GATS is not institutional based but country based. In this context, the
23
CMB has been participating in World Trade Organization
(WTO) Financial Services Committee meetings.
• The Islamic Financial Services Board (IFSB)
In August 2010, the CMB became an associate-member
of the Islamic Financial Services Board (IFSB). Herewith,
the CMB aims to provide the investors with new financial
services and attract foreign capital to Turkey.
• The Standing Committee for Economic and
Commercial Cooperation of the Organization of
the Islamic Conference (COMCEC)
The CMB, in order to undertake an active role within
COMCEC, contributes to establishing a “COMCEC Capital
Markets Regulatory Bodies Forum” to ensure the exchange of information and collaboration between the regulatory authorities of 57 member states.
Bilateral Memorandum of Understandings
The CMB has signed Memorandum of Understandings
(MoUs) with foreign regulators to strengthen the mutual
cooperation in technical and legal matters of common interest.
24
Bilateral MoUs signed by the CMB
Country
Institution
Date
1
Krygyzistan
The State Service for Financial Market Supervision and Regulation
under the Government
of the Kyrgyz Republic
February
2011
2
United Arab
Emirates
Emirates Securities and
Commodities Authority
October
2010
3
Azerbaijan State Committee for Securities
Securities Commission
June
2010
April
2010
4
Malaysia
5
Russia
Federal Financial Markets
Service of Russia
August
2009
6
Syria
Syrian Commission on Financial Markets and Securities
January
2008
7
China
China Securities Regula- November
2006
tory Commission
8
Taiwan
Financial
Supervision June 2006
Commission
9
Israel
Israel Securities Authority
February
2006
10
Montenegro
Securities Commission of
the Republic of Montenegro
February
2006
25
Bilateral MoUs signed by the CMB
Country
11
Institution
Dubai Financial Services
United
Arab Emirates Authority
Date
November
2005
12 Bosnia and Securities Commission of
Herzegov- the Federation of Bosnia
and Herzegovina
ina
Republic of Srpska Securities Commission
October
2005
The Netherlands Authority for the Financial Markets
October
2005
13
Netherlands
14
Croatia
Croatian Securities Com- June 2005
mission
15 Macedonia Securities and Exchange April 2005
Commission
16
Bulgaria
Financial
Supervision April 2005
Commission
17
Romania
Romanian National Securities Commission
18
19
Albania
Malta
Albanian Securities Commission
December
2004
October
2003
Malta Malta Financial September
2003
Services Center
April
2002
(Malta Financial Services
Authority)
June 2001
Malta Stock Exchange
26
Bilateral MoUs signed by the CMB
Country
Institution
Date
20
Greece
Capital Markets Commission
October
2001
21
Portugal
Comissão do Mercado de July 2001
Valores Mobiliários
22
Australia
Australian Securities and June 2001
Investment Commission
23
USA
Commodity Futures Trad- June 2001
ing Commission
24
Italy
Commissione Nazionale June 2001
per le Società e la Borsa
25
Sweden
Finansinspektionen
June 2001
26
Germany
BAWe (BaFin)
May 2000
27
France
Commission des Opéra- May 2000
tions de Bourse (Autorité
des Marchés Financières)
28
Great
Britain
HM Treasury
Financial Services
A uthority
London Stock Exchange
27
August
1999
Statistical Data & Publications
The CMB publishes monthly statistical bulletins, periodical
reports, academic studies and information booklets for investors.
All publications can be accessed at the CMB’s Website:
www.spk.gov.tr (in Turkish)
www.cmb.gov.tr (in English)
List and contact details of the institutions under the remit
of the CMB are also available on this Website.
28
Selected Indicators of Capital Markets in Turkey
2009
October 2010
NUIMBER OF CORPORATIONS REGISTERED BY THE CMB
548
562
-NUMBER OF CORPORATIONS TRADED ON THE ISE
322
339
-NUMBER OF COMPANIES NOT TRADED ON THE ISE
226
223
235,966
350,184
NUMBER OF INVESTORS IN ISE
1,000,261
1,025,175
NUMBER OF MUTUAL FUNDS INVESTORS
2,998,648
3,373,967
144
144
103
103
41
41
393
534
- Number of Domestic Mutual Funds
316
465
- Portfolio Value ($ Million)
19,9
21,0
- Number of Foreign Mutual Funds
77
69
- Portfolio Value ($ Million)
39
35
NUMBER OF PENSION FUNDS
130
136
6,126
8,162
NUMBER OF INVESTMENT TRUSTS
33
33
- Portfolio Value ($ Million)
479
522
14
18
3,172
3,847
2
2
103
105
23
25
26,7
31,2
NUMBER OF INDEPENDENT AUDITING FIRMS
95
93
NUMBER OF REAL ESTATE APPRAISAL FIRMS
63
81
9
9
MARKET CAPITALIZATION OF THE ISE COMPANIES ($ Million)
INTERMEDIARY INSTITUTIONS
-Brokerage Firms
-Banks
NUMBER OF MUTUAL FUNDS
-Portfolio Value ($ Million)
NUMBER OF REAL ESTATE INVESTMENT TRUSTS
- Real Estate Investment Trusts Net Asset Value (Million $)
NUMBER OF VENTURE CAPITAL INVESTMENT TRUSTS
- Portfolio Value ($ Million)
NUMBER OF PORTFOLIIO MANAGEMENT COMPANIES
- Value of Portfolios under Management ($ Million)
NUMBER OF RATING AGENCIES
29
CONTACT DETAILS FOR THE CAPITAL MARKETS
BOARD AND OTHER RELEVANT INSTITUTIONS
Capital Markets Board
Web Site
: http://www.spk.gov.tr/
Address
: Eskişehir Yolu 8. Km. No:156
06530-ANKARA
Phone
: +90- 312- 292 90 90
Fax
: +90-312- 292 90 00
İstanbul Stock Exchange
Web Site
: http://www.imkb.gov.tr/
Address
: Reşitpaşa Mah. Tuncay Artun cad.
Emirgan 34467-İSTANBUL
Phone
: +90-212- 298 21 00
Fax
: +90-212- 298 25 00
ISE Settlement and Custody Bank Inc.
Web Site
: http://www.takasbank.com.tr
Address
: Şişli Merkez Mahallesi Merkez Cad.
Mecidiyeköy Yolu Sok. No: 6
34381 Şişli-İSTANBUL
Phone
: +90-212- 315 25 25
Fax
: +90-212- 315 25 26
Turkish Derivatives Exchange Inc. (TURKDEX)
Web Site
: http://www.vob.org.tr
Address
: Akdeniz Cad. No:14 Birsel İş Merkezi
Daire: 601 35210 Alsancak / İzmir / TURKEY
Phone
: +90 232 481 10 81
Fax
: +90 232 445 61 85
30
İstanbul Gold Exchange
Web Site
: http://www.iab.gov.tr/
Address
: Rıhtım Cad. No: 81
34425 Karaköy- İSTANBUL
Phone
: +90-212- 292 66 00
Fax
: +90-212- 292 66 18
Central Registry Agency Inc.
Web Site
: http://www.mkk.com.tr/
Address
: Askerocağı Cad. Süzer Plaza No:1-15
Kat:2 34367 Elmadağ-Şişli-İSTANBUL
Phone
: +90-212- 334 57 00
Fax
: +90-212- 334 57 57
The Association of Capital Market Intermediary
Institutions of Turkey
Web Site
: http://www.tspakb.org.tr/
Address
: Büyükdere cad. No:173
1. Levent Plaza A Blok Kat:4
34394 Levent-İSTANBUL
Phone
: +90-212- 280 85 67
Fax
: +90-212- 280 85 89
Corporate Governance Association of Turkey
Web Site
: http://www.tkyd.org/
Address
: Yıldızposta cad. Dedeman İşhanı
No:48 Kat:7 34349
Esentepe-İSTANBUL
Phone
: +90-212- 347 62 73
Fax
: +90-212- 347 62 76
31
Association of Real Estate Investment Companies
Web Site
: http://www.gyoder.org.tr/
Address
: Nispetiye cad. Levent İşmerkezi
No: 6/2 34330 Levent-İSTANBUL
Phone
: +90-212- 282 53 65, +90-212- 325 28 25
Fax
: +90-212- 282 53 93
Turkish Institutional Investment
Managers’ Association
Web Site
: http://www.tkyd.org.tr/
Address
: İş Kuleleri Kule-2 Kat:8
34330 4. Levent-İSTANBUL
Phone
: +90-212- 279 03 99
Fax
: +90-212- 279 07 44
Public Disclosure Platform
Web Site
: http://www.kap.gov.tr/
Address
: Reşit Paşa Mah. Tuncay Artun cad.
Emirgan İSTANBUL
Phone
: +90-212- 298 21 00
Fax
: +90-212- 298 25 00
32