Capital Markets Board of Turkey Announces New Draft Statement: Venture Capital Market


The Capital Markets Board of Turkey (Plank) posted “The Draft Statement on Principles Regarding Companies Whose Shares Are Traded in the Venture Capital Market” (Draft Statement), on its website on September 20, 2022, for public review and comment. With the Draft press release, the Council aims to regulate the procedures and principles concerning (i) the sale of shares of non-public companies to qualified investors without a public offer by raising capital, and then obtaining the status of a listed company, (ii) the liabilities of companies after the sale of their shares on the stock exchange without a public offering; and (iii) the responsibilities and exemptions of companies regarding financial reporting, independent auditing and material disclosures.

Subject of the draft press release

Companies offer their shares to the public and acquire the status of a listed company with the aim of obtaining, easier access to financing, greater liquidity for their shares, increased publicity concerning the company itself. For smaller companies, however, the public offering becomes too cumbersome due to board auditing and lengthy and costly public offering procedures. The draft communiqué aims precisely to solve this problem by introducing new regulations allowing these small businesses to have easier access to financing, as well as qualified financing. The draft communiqué thus aims to pave the way for companies to acquire public company status without going through a public offering while simultaneously protecting companies from certain relevant risks.

Listed company status introduced by the draft press release

Listed company status can be acquired in two ways: (i) companies whose shares are listed on the stock exchange, and (ii) joint stock companies with more than 500 shareholders but whose shares are not yet listed on the stock exchange. stock exchange are qualified as a public company listed on the stock exchange. The draft notice, on the other hand, stipulates that unlisted companies can issue their shares without a public offering and that their shares can be traded on the venture capital market established under the Istanbul Stock Exchange. According to the draft notice, joint-stock companies whose shares will be traded on the venture capital market will be considered as listed companies.

Conditions for being traded on the venture capital market

Simply put, a company needs to raise its capital and the newly issued shares need to be allocated to qualified investors in the venture capital market in order for the shares of a company to be traded in the venture capital market. The Board designates investment funds, pension funds, securities investment trusts, venture capital investment trusts, real estate investment trusts and natural and legal persons holding Turkish and/or foreign currencies and capital market instruments in an amount of at least TRY 1 million on the date of the public offer as accredited investors.

Therefore, companies must follow the following procedures in order to be traded on the venture capital market:

  • The board of directors of the company must prepare an amendment text to modify the articles of association in accordance with the regulations of the board of directors and the objectives and principles of the law on capital markets (Law No. 6362) (Right) and make a request to the Commission with the modification text. The text of modification must be adopted during the general meeting to be held within 6 months at the latest.
  • The general meeting of the company must rule on the capital increase. At the same time, a resolution must be made regarding the partial or complete restriction of the use of pre-emptive rights according to Article 461 of the Turkish Commercial Code (Law No. 6102)
  • An application must be made to the Régie with the prospectus and the appendices. The Board also requires that the following conditions be met: (i) the registered capital of the company must be at least TRY 5 million, (ii) its net turnover must exceed TRY 30 million, and (iii ) its total assets must be greater than TRY. 50 millions.


The draft communiqué will soon take its final form and the communiqué which will regulate the procedures and principles regarding the issuance of shares of non-public companies to be traded on a new market under the Istanbul Stock Exchange, without a public offering will come into effect. Thus, an intermediary mechanism will be put in place allowing companies to reap similar benefits to public offerings while avoiding its disadvantages such as costly procedures to some extent.

You can access the full text of the draft press release here (only available in Turkish).


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