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The Capital Markets Board (CMB) has been actively updating its legislation as stated in its annual work plan for 2003 by issuing new communiqués or by amending existing legislation.

One of the notable updates is the Communiqué On the Principles for Venture Capital Companies (Communiqué VI/15). This communiqué regulates the incorporation principles and requirements for the incorporators of venture capital companies. It also sets out the rules on the registration of the shares of venture capital companies with the CMB and the public offering of the shares of venture capital companies. Also included in Communiqué VI/15 are venture capital companies' permitted scope of activities, portfolio limitations, management principles and requirements to be met by their managers, and rules regarding public disclosures.

Also, for the first time in its history, in Communiqué Serial VI No. 15 the CMB has reflected its principle decision about privileged shares in publicly held companies by limiting the scope of the privileges that can be granted to incorporators and impeding the issuance of further privileges once the venture capital company has gone public. As a result of this principle decision, the CMB no longer allows publicly held companies to expand the scope of privileges created before going public or establishing new ones after going public.

Another update is the passage of the Communiqué on the Registration of Profit and Loss Sharing Certificates with the CMB. This communiqué sets out principles for the issuance of profit and loss sharing certificates in Turkish liras, or indexed with a foreign currency, for certificates to be sold within Turkey or abroad, in order to provide finance to the issuers.

In addition to the above stated new communiqués, the CMB recently amended several pieces of existing legislation, including the Communiqué on the Sale of Shares and Registration of Shares with the CMB, the Communiqué on Principles Concerning Shares Without Voting Rights, the Communiqué on Principles About Brokerage Activities, the Communiqué on Bookkeeping During the Brokerage Activities, the Communiqué on Portfolio Management Activities and Companies Performing Portfolio Management Activities, and the Communiqué on the Correction of Financial Tables During High Inflation Periods. These amendments intend to improve the legislation in line with the issues confronted during day-to-day practice.

In the first quarter of 2003, the CMB has made these changes to its legislation in order to meet the goals of its annual work plan. Reviewing the work that has been carried out thus far, it appears that the CMB will continue its hard work during the remainder of the year to amend and update its legislation.

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