By the Banking Regulation and Supervision Agency:
REGULATION ON FINANCIAL HOLDING COMPANIES1
(Published in the Official Gazette dated 1/11/2006, nr 26333)
Objective and Scope, Basis and Definitions
Objective and Scope
ARTICLE 1– (1) The objective of this Regulation is to regulate the procedures and principlesfor the scope of financial holding companies, their corporate structures and their limitations and audits.
(2) This Regulation covers the financial holding companies for which natures and scope are laid down by Article 4 hereof.
ARTICLE 2– (1) This Regulation has been prepared based on the Articles 78 and 93 ofBanking Law Nr. 5411 dated October 19, 2005.
ARTICLE 3– (1) The following terms used in this Regulation shall have the meaningsexpressly designated to them below:
ç) Financial holding company: Financial holding company as defined by Article 3 of the
Law,for which qualifications and scope are set forth by Article 4 of this Regulation
ğ) Credit institution: Credit institution as defined by Article 3 of the Law
1 Amended by the Regulation published in the Official Gazette dated 23/10/2015 nr. 29511.
ı) Agency: Banking Regulation and Supervision Agency
Scope of financial holding companies
ARTICLE 4– (1) In the event that the following conditions concerning a parent company which is established in Turkey as a joint stock company (AS) and has at least one of its subsidiaries operating as a credit organization are met altogether, the mentioned parent company falls in the scope of financial holding companies:
ç) The ratio of the average of the sum of assets of the subsidiaries composed of banks and financial leasing, factoring and financing companies as of the end of the last three accounting periods to the average of the sum of assets of the subsidiaries composed of credit institutions and financial institutions is ten per cent or more.
Corporate Structure of Financial Holding Companies
Qualifications of partners and indirect shareholding
ARTICLE 5– (1) Qualifying holders that are natural persons and legal entities must meet the qualifications for bank founding partners as laid down by Article 8 of the Law.
(2) In determination of qualifying holding as referred to by the first paragraph, indirect shareholding is determined subject to the procedures and principles regulated by the Article 13 of Regulation on Banking Operations Subject to Permission and Indirect Shareholding.
Amendments to articles of association, share acquisition and transfers
ARTICLE 6- (1) Amendments to the articles of association of financial holding companies shall be governed by provisions of the Article 16 of the Law and the Agency shall be informed of such amendments within ten work days from the date of registration of these amendments to the Trade Registers Office.
(2) Acquisition and transfers of shares by financial holding companies shall be applied by provisions of Article 18 of the Law. Such transactions shall be subject to provisions set forth in
Article 11 of the Regulation on Banking Operations Subject to Permission and Indirect Shareholding.
(3) In issue of permissions for acquisition and transfer of shares in financial holding companies, the transfer share laid down by the Article 18(3) of the Law is deposited with the Fund on the basis of the change indirectly occurring in the shareholding of the bank.
Provisions about corporate management
ARTICLE 7– (1) Financial holding companies may determine their organizations and processes regarding corporate management pursuant to the procedures and principles established by the Regulation on the Principles for Corporate Management of Banks referring to Article 22 of the Law.
Limitations Concerning Financial Holding Companies
(Amended OG 23/10/2015-29511) Equities, capital adequacy, leverage ratio and liquidity adequacy
ARTICLE 8- (1) Financial holding companies are obliged to calculate consolidated equity pursuant to the provisions of the Regulation on Equities of Banks published in Official Gazette No:28756 dated September 5, 2013.
(5) Financial holding companies are obliged to have adequate high quality liquid asset stock that can meet net cash outflows in order to determine minimum liquidity level on consolidated basis pursuant to the provisions of Regulation on Calculation of Liquidity Coverage Ratio of Banks published in Official Gazette No:28948 dated March 21, 2014.
FX net general position/equity standard ratio
ARTICLE 9- (1) Financial holding companies are obliged to calculate on consolidated basis the FX net position/equity standard ratio in a manner to include their partners having the nature of credit institution and financial institution pursuant to the provisions about protective regulations in Article 43 of the Law.
(2) Financial holding companies calculate FX net general position/equity standard ratio as
of consolidated equity calculation period pursuant to the provisions of articles 5 and 6 of the Regulation on the Calculation and Implementation of Foreign Currency Net General Position/Equity Standard Ratio by Banks on Consolidated and Non-Consolidated Basis.
ARTICLE 10- (1) The financial holding company having the nature of parent company is obliged to calculate and implement its credit limits upon the provisions of the Regulation on Credit Operations of Banks by considering the transactions considered as credit which are included in balance-sheet and off-balance sheet accounts of each partnership having the nature of credit institution or financial institition covered by consolidation and which are determined by Article 48 of Law and by considering the consolidated equity amount calculated according to the Article 8(1).
(Amended OG 23/10/2015-29511) Rectification of excess
ARTICLE 11- Provisions of related legislation are applicaple in rectification of excesses about limits and ratios that financial holding companies are subject to.
Audit of Financial Holding Companies
Audits, sharing audit information and measures to be taken
ARTICLE 12- (1) As per Articles 65, 66, 93 and 95 of the Law, financial holding companies including all of their partners covered by consolidation are subject to consolidated audit. Consolidated audit is conducted by consolidating the results of audits of banks and companies of financial leasing, factoring and financing audited by the Agency and the results of audits conducted by authorities authorized to audit and supervise other financial institutions. Upon a request made to competent authorities by the Board if deemed necessary by the Agency, consolidated audits shall jointly be conducted by the staffs of the Agency and relevant competent authorities, who are authorized to conduct such audits.
(2) Copies of any reports, opinions and/or written comments obtained as a result of audits conducted by authorities authorized to audit and supervise the financial institutions other than banks and financial leasing, factoring and financing companies, in the relevant financial organization covered by the first paragraph, which concern subjects of a nature that may have impact on the financial structures of financial holding companies, are sent to the Agency within maximum fifteen days from the date of their preparation by the relevant competent authorities as per the Article 95(4) of the Law. The Agency may request the authorities in charge of audits
and supervision of the relevant financial institutions by providing justification thereof that they submit any information considered essential in view of the financial sheets of financial holding companies, which cannot be derived from the reports or opinions regarding the results of audits sent, including copies of documents concerning such information.
Accounting and reporting system
ARTICLE 13- (1) Articles 37 and 38 of the Law concerning the accounting and reporting systems and consolidated financial reports are applicable for financial holding companies. Financial holding companies shall prepare and publish consolidated financial reports at the end of March, June and September and at the end of accounting period, pursuant to Turkish Accounting Standards and Turkish Financial Reporting Standards.
Procedures Related to the Banks’ Accounting Applications and Preservation of Documents are applied.
ARTICLE 14- (1) (Amended OG 2/4/2015-29314) The external audit of consolidated financial reports of financial holding companies prepared as of the endof accounting period, is conducted pursuant to Turkish Commercial Law No:6102 dated January 13, 2011, Decree Law Concerning the Organization and Duties of Public Oversight Accounting and Auditing Standards Authority No:660 dated September 26, 2011 and related legislation.
Miscellaneous and Final Provisions
Receipt of rating and evaluation activities and procurement of support services
ARTICLE 15– (1) Article 34 of the Law applies for any ratings to be procured by financial holding companies. Such operations are carried out by the organizations authorized under the Regulation on Principles for Authorization and Activities of Rating Institutions and Cancellation of theri Authority in line with the procedures and principles laid down by the mentioned regulation.
ARTICLE 16- (1) Financial holding companies are subject to the Article 96 of the Banking Law relating to authority of demanding information and document of the Agency.
(2) The partners of financial holding companies, members of board of management and other members, persons act in the name of them, and institutions which financial holding companies receive rating, independent audit, valuation and support services and their employees are subject to the provisions relating to keeping the secrets regulated in the Article 73 of the Banking Law.
Documents concerning qualifying holders
PROVISIONAL ARTICLE 1– (1) Qualifying holders of financial holding companies, documents listed by sub-paragraphs (b), (ç), (d), (e), (g), (ğ), (h), (ı), (i), (j) and (o) of the first paragraph of Article 4 of the Regulation on Operations of Banks Subject to Permission and Indirect Shareholding and copies of the Trade Registry Gazette indicating that founding legal entities are qualified holders of financial holding companies as well as list of attendants and any other legal documents to be requested by the Agency are sent to the Agency no later than June 1, 2007.
(2) In the event that qualifying holders of financial holding companies fail to meet the conditions laid down by Article 8 of the Law and/ or they fail to submit documents certifying that they are in possession of such conditions to the Agency as indicated by the first paragraph, they have to transfer their shareholdings in financial holding companies by June 1, 2007 such that their shares fall below the limit of qualified holding. Partners failing to achieve the required share transfers by this date shall not benefit their partnership rights other than dividends. In this case, other partnership rights are exercised by the Fund upon a notification by the Agency. Such shareholders shall not exercise their privileges until their direct or indirect shares in capital fall below ten per cent.
Documents concerning top managers
PROVISIONAL ARTICLE 2– (1) Companies falling in the scope of financial holding companies as of the date of entry into force of this Regulation have to render their positions regarding members of their executive boards and supervisory committees as well as general managers and deputy general managers compliant with the provisions of Articles 23, 24 and 25 of the Law and make necessary notifications thereof to the Agency as required by the Article 7(3) and (6) no later than June 1, 2007.
Submission of comparative information
PROVISIONAL ARTICLE 3– (1) Financial holding companies are not obliged to submit comparative information in their first reporting to be made as per the Article 13(1).
Entry into Force
ARTICLE 17– (1) Articles 8, 9, 10, 11, 12, 13 and 14 and the Article 15(1) and (2) of this Regulation enter into force as of December 31, 2007 whilst other provisions take force as of the date of publication.
ARTICLE 18– (1) The provisions of this Regulation are enforced by the Chairman of the Banking Regulation and Supervision Agency.