New capital markets communique introduces fundamental changes for publicly-traded companies

Available languages: TR

Turkey has published and enacted a new communique on Significant Transactions and Exit Right, which will significantly affect the decisions by the senior management of publicly-traded companies. Communique No. II-23.3, which came into force when published in the Official Gazette on 27 June 2020, introduces secondary legislation in line with the Law Amending the Banking Law and Certain Laws No. 7222, which came into effect on 25 February 2020 and amended the Capital Markets Law (CML).

The Communique stipulates the principles and procedures for significant transactions, exit rights and the determination of the exit right price.

The following article outlines the main features of the Communique.

Scope of significant transactions

  • The system of assuming that every merger and demerger is a significant transaction (ST) has ended. Now, being party to a merger and demerger transaction as set forth by Article 5 of the Communique is considered an ST (along with being a party in a merger by the formation of a new company by acquiring a company through increasing the capital by 50% or more).
  • Article 6 of the Communique regulates the threshold for the significance of asset transfers, transactions resulting in asset transfers or establishing a right in rem, and the number of transactions in the scope of the ST. The significance threshold has been increased to 75%, which has led to a decrease in the number of transactions in the scope of the ST.
  • As per the Communique on Corporate Governance (II-17.1), the above-indicated threshold is 50% for listed companies of shareholders with more than a 50% free-float share, excluding Groups 1 and 2 companies, real estate investment companies and venture capital investment companies. Furthermore, any asset transfer that leads to a complete change in the area of activity of or any transaction that establishes a right in rem over the companies mentioned above is deemed to be an ST regardless of the ratio, Article 6(6).
  • Although not included as an ST under the Communique, fundamental transactions that significantly change the partnership structure by means of altering its main activities in the ordinary course of its business, which could lead to investors changing their investment decisions, may be regarded as STs by the Capital Markets Board (CMB), Article 4(3). Note that the evaluation of the CMB may be subjective, which could in practice lead to disruptions.
  • Transactions are excluded from the scope of an ST, if they include exiting the exchange list, terminating, altering the area of activity by amending the articles of association and purchasing relevant party assets.

Shareholders who may use the exit right

  • The Communique reflects the CML amendment regarding the unavailability of the exit right to those shareholders who transfer their shares after they are eligible to use their exit right. In this regard, an exit right (including matched orders regardless of the completion of exchange) is applicable for shareholders at the time the exit right arises for shares they have at that given time. As a result, the share amounts that may be subject to the exit right will be calculated by deducting sales made until the relevant general assembly meeting (on a last-in first-out basis), and the day-end net balance from the shares held as of the date the exit right originated, Article 11(2).
  • A list of the shareholders who have exit rights and each share amount that these shareholders may use for their exit rights must be provided to the relevant company by the Turkish Central Registry Agency (Merkezi Kayıt Kuruluşu Anonim Şirketi) one business day before the respected company’s general assembly meeting, Article 11(4).
  • Concerning the current practice, the distinction mentioned above will not be made for privately held companies, and every shareholder who attends the relevant general assembly meeting will be entitled to use its exit right, Article 11(3).

Price of exit right

  • With the CML amendment, the previous practice regarding the price of shares subject to the exit right has ended, and the fair price practice has been adopted. Fair price has become a concrete principle under the Communique. For publicly-traded companies, the exit-right price is to be calculated over the daily adjusted weighted average covering the previous one-month period for shares traded at Yıldız Pazar, and six months for other publicly-traded companies as of the date the right was originated, Article 14(1).
  • For privately-held companies, the practice of preparing a valuation report has been preserved, and an additional report has been deemed necessary for changes occurring after the initial valuation report, Article 14(2).

Offering the purchase of shares that are subject to the exit right

  • The company's obligation to make a purchase while exercising the exit right has been removed. Offering the shares subject to the exit right to existing shareholders or other investors before their purchase by the company is regulated based on the CML amendment.

Exemptions-conditions where the exit right does not originate

  • Removing or changing privileges, proposing voluntary takeovers and merger transactions where a special-purpose acquisition vehicle is a party (as previously regulated within the conditions where the exit right does not originate) have been included within the exemption conditions under the Communique.
  • The Board has been granted the authority to give exemptions from the exit right obligation, among others, in the following situations: transactions made by companies to recover from financial difficulty; companies acquiring material benefits in exchange for establishing limited real rights on assets for the benefit of third parties; and transactions such as being party to intra-group mergers where the transferring company substantially preserves the core business and the shareholder structure(Article 16.1).
  • The list of conditions where the exit right does not originate have been extended to include mergers for retrieval, sales made to financial institutions and banks with the right to repurchase and share sales of subsidiaries by public offering.

Transition Period

  • In principle, the abolished Communique II-23.1 was applied to public transactions before the entry into force of the Communique.
  • Significant dates for the determination of persons that can benefit from the exit right and the share amount of STs that were declared before the entry into force of the Communique for the exchange companies. Further to this, the following dates apply:
    • 25 February 2020 for transactions declared to the public before 25 February 2020;
    • Declaration date for transactions declared to the public between 25 February 2020 and 27 June 2020, which was the date of entry into force of the Communique.
  • Although earlier communique provisions will be applied to transactions declared to the public before the entry into force of the Communique, before the purchase of shares that are subject to the request of an exit right, the right to take a board of directors decision regarding offering it to other shareholders or investors is confirmed by the Communique (Provisional Article 1).


  • A guide has been published to govern the application.

As a continuation of the amendments made to the CML earlier this year, the Communique applies to the principles and procedures of significant transactions and exit rights of minorities, which senior management of companies, especially publicly-traded companies, should take into account.

For more information, contact your regular CMS advisor or local CMS experts: Hülya Kemahlı and Arcan Kemahlı.