During the final months of 2002, the Turkish Capital Market Board (CMB) promulgated a number of new legislative acts.
The Communiqué Amending the Communiqué on Independent Auditing in the Capital Markets, which came into force on January 1 2003, prohibits independent audit firms and individuals employed by these firms from providing consulting and auditing services to companies at the same time. The communiqué also prevents consulting firms, which are controlled by auditing firms via management control or share capital majority, from providing their services to companies that are working with the controlling auditing firm. These prohibitions are also applicable to individual shareholders and managers of auditing or consulting firms. The only exception to the rule is the ability to provide consultancy services as to the accuracy of financial accounts and tax declarations within the tax law framework.
The Communiqué on the Procedure and Principles concerning the Recording of Dematerialized Capital Market Instruments permits the electronic recordkeeping of securities and rights related thereto in the Central Registry Corporation (CRC) in accordance with a recording system to be determined by the CRC under the supervision of the CMB. The establishment, operation, working and supervising principles of the CRC will be determined by regulations to be promulgated by the Council of Ministers. The communiqué lists different types of accounts to be opened in the CRC. Accordingly, issuers, brokerage companies, clearinghouses, account representatives and investors can open accounts with the CRC.
Finally, Article 25 of the Regulation on the Istanbul Securities Exchange Securities Market was amended, setting out the timeframe to cease transactions of a publicly-held company. Accordingly, the maximum period of time to be granted to companies whose transactions are temporarily ceased is two months. These companies can only be granted an additional one-month period if the board of directors of the Istanbul Stock Exchange deems it necessary.
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