Temporary Regulatory Measures Introduced by the CMB to Maintain Market Stability
A. Introduction
Pursuant to the Capital Markets Board of Turkey’s (“CMB”) decision no. 18/574, published in the CMB Bulletin dated 23.03.2025 and numbered 2025/18 (“CMB Announcement”), certain temporary measures have been introduced to preserve market stability. In this context, short selling transactions have been temporarily prohibited, regulatory conditions for company share buybacks have been eased, and margin requirements applicable to margin trading have been relaxed.
B. Significant Changes in the CMB Announcement
Short Selling Transactions Prohibited Until 25 April 2025
According to the CMB Announcement, short selling transactions in the equity market of Borsa İstanbul A.Ş. (“Borsa İstanbul”) are prohibited from 24 March 2025 until the end of the trading session on 25 April 2025. Intraday transactions conducted without activating the short sale flag and closed on the same day are also covered by this restriction.
Investment firms are responsible for ensuring and monitoring compliance with this prohibition.
Eased Regulations for Share Buybacks by Public Companies
In accordance with the CMB Announcement and CMB’s decision dated 19.03.2025 and numbered 16/531, it has been decided that certain limitations and obligations set forth in the Communiqué on Buy-Backed Shares No. II-22.1 (“Communiqué”) and the CMB’s principal decisions shall not apply to share buybacks to be conducted between 24 March 2025 and the end of the trading session on 25 April 2025.
• The restrictions preventing the price of a buy order exceeding the current bid quotations or the last executed sale price, and the highest current bid available in the order book shall not be applied.
• The rules prohibiting the placement of orders and execution of transactions under the share buyback program during the opening session and the last 15 minutes of the first session, as well as during the opening and closing sessions of the second session, shall not apply. Additionally, for shares traded via both continuous trading and single-price methods, the rules prohibiting order placement during the opening session, mid-day single-price session, and closing session, as well as the submission of special transaction notifications, shall also not be applied.
• The upper limit requiring that the total value of repurchased shares must not exceed the total amount of distributable resources within the framework of CMB regulations shall not be applied.
Margin Requirements Applicable to Margin Trading Have Been Relaxed
Pursuant to article 17 of the Communiqué on Margin Trading, Short Selling, and Lending and Borrowing of Capital Market Instruments (Series: V, No: 65), it has been decided that the requirement to maintain a minimum margin ratio of 35% throughout the term of margin transactions may be applied flexibly, and at a minimum of 20%, until the end of the trading session on 25 April 2025, provided that this aligns with the intermediary institutions’ own risk policies and, to the extent possible, takes into account client requests.
For more information and support, please contact us at info@lbfpartners.com
LBF Partners Law Firm
Pursuant to the Capital Markets Board of Turkey’s (“CMB”) decision no. 18/574, published in the CMB Bulletin dated 23.03.2025 and numbered 2025/18 (“CMB Announcement”), certain temporary measures have been introduced to preserve market stability. In this context, short selling transactions have been temporarily prohibited, regulatory conditions for company share buybacks have been eased, and margin requirements applicable to margin trading have been relaxed.
B. Significant Changes in the CMB Announcement
Short Selling Transactions Prohibited Until 25 April 2025
According to the CMB Announcement, short selling transactions in the equity market of Borsa İstanbul A.Ş. (“Borsa İstanbul”) are prohibited from 24 March 2025 until the end of the trading session on 25 April 2025. Intraday transactions conducted without activating the short sale flag and closed on the same day are also covered by this restriction.
Investment firms are responsible for ensuring and monitoring compliance with this prohibition.
Eased Regulations for Share Buybacks by Public Companies
In accordance with the CMB Announcement and CMB’s decision dated 19.03.2025 and numbered 16/531, it has been decided that certain limitations and obligations set forth in the Communiqué on Buy-Backed Shares No. II-22.1 (“Communiqué”) and the CMB’s principal decisions shall not apply to share buybacks to be conducted between 24 March 2025 and the end of the trading session on 25 April 2025.
• The restrictions preventing the price of a buy order exceeding the current bid quotations or the last executed sale price, and the highest current bid available in the order book shall not be applied.
• The rules prohibiting the placement of orders and execution of transactions under the share buyback program during the opening session and the last 15 minutes of the first session, as well as during the opening and closing sessions of the second session, shall not apply. Additionally, for shares traded via both continuous trading and single-price methods, the rules prohibiting order placement during the opening session, mid-day single-price session, and closing session, as well as the submission of special transaction notifications, shall also not be applied.
• The upper limit requiring that the total value of repurchased shares must not exceed the total amount of distributable resources within the framework of CMB regulations shall not be applied.
Margin Requirements Applicable to Margin Trading Have Been Relaxed
Pursuant to article 17 of the Communiqué on Margin Trading, Short Selling, and Lending and Borrowing of Capital Market Instruments (Series: V, No: 65), it has been decided that the requirement to maintain a minimum margin ratio of 35% throughout the term of margin transactions may be applied flexibly, and at a minimum of 20%, until the end of the trading session on 25 April 2025, provided that this aligns with the intermediary institutions’ own risk policies and, to the extent possible, takes into account client requests.
For more information and support, please contact us at info@lbfpartners.com
LBF Partners Law Firm
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