Capital Markets Board Decision on Sales Methods and Distribution Principles for the Initial Public Offering of Shares

The Capital Markets Board of Turkey (CMB) has issued Decision No. i-SPK.128.23 (dated 19/09/2024 and numbered 1508) (Decision No. 128.23) with the Capital Markets Board Bulletin published on 19.09.2024.

Decision No. 128.23 repealed Decision No. i-SPK-128.21 (dated 30/03/2023 and numbered 20/412).

The important points and innovations foreseen regarding the sales method and distribution principles for the initial public offering of shares as per Decision No. 128.23 are summarized below:

The threshold value of TRY 750,000,000, which was taken as a basis for determining the sales method to be used in public offerings, was maintained.

For public offerings where the market value of the offered shares exceeds TRY 750,000,000 and when book building outside the stock exchange method is used:

• It was regulated that an allocation of up to 10% of the total amount can be made for the investor group with high demand other than the institutional investor group and equal or proportional distribution methods can be used, and that there is an obligation to provide collateral in case of proportional distribution method.
• In the distributions to be made to the domestic institutional investor group, if there is sufficient demand, at least 50% of the allocated shares will be distributed to mutual and pension funds. Quantity limitations for portfolio management companies, and funds were retained. In addition, a limit of 2% of the offering amount was introduced for persons related to portfolio management companies and special regulations were included in this scope.
• If the amount to be allocated to an investor group is not met, the unmet demand can be freely transferred to other groups. In this context, the obligation to first transfer the unmet portion to the domestic individual investor group has been abolished.
• In the distributions to be made to the foreign investor group, the issuer, and the authorized public offering institution will be responsible for the transactions aimed at evading or circumventing the provisions regarding the distribution principles. In this context, the issuer and the intermediary or the consortium leader are obliged to give an undertaking to the CMB.