On February 08, 2016, the European Securities and Markets Authority (ESMA) published an announcement disclosing the result of its assessment of Turkish legislation governing prospectuses. Accordingly, ESMA concluded that a prospectus drawn up against Turkish requirements can constitute a valid prospectus under the Prospectus Directive for the purposes of its approval by the home competent authority of a Member State.
Following a request from the Capital Markets Board of Turkey, ESMA agreed to assess the requirements of Turkish laws and regulations on prospectuses. ESMA carried out a review of Turkish laws and regulations on securities and prospectuses as they currently stand and a comprehensive comparison between Turkish requirements and EU requirements set out in the Prospectus Regulation regarding minimum disclosure requirements for share prospectuses.
Based on this assessment work and in accordance with the ESMA opinion on the framework for third country prospectuses under Article 20 of the Prospectus Directive (ESMA/2013/317), ESMA concluded that a prospectus drawn up according to Turkish laws and regulations can constitute a valid prospectus under the Prospectus Directive for the purposes of its approval by the home competent authority of a Member State. Article 20 of the Prospectus Directive provides that the competent authority of the home Member State of issuers having their registered office in a third country may approve a prospectus for an offer to the public or for admission to trading on a regulated market, drawn up in accordance with the legislation of a third country.
ESMA’s assessment and subsequent recognition of the Turkish prospectuses is seen as an encouraging step towards aligning Turkish capital market rules with the EU standards and is expected to have a positive influence on Turkey’s ongoing İstanbul International Financial Centre (IFC) Project. With this recognition, companies whose prospectuses are approved in EU markets will have more convenience in floating their shares in Turkey should they consider a listing in the Turkish market and vice versa. For the complete ESMA review please click here.