Stock Market

The fully computerized trading system of the Istanbul Stock Exchange (ISE) was completed in mid-November 1994. The system enables the ISE members to trade in stocks and rights coupons. The stock trading activities are carried out in two separate sessions, one session in the morning and the other in the afternoon. Computerized trading significantly improved the speed of execution and increased the daily trading capacity.

Prices are determined on a “multiple price-continuous auction” method, utilizing a computerized system that automatically matches buy and sell orders on a price and time priority basis. The buyers and sellers enter the orders into the computer system through their workstations located at the ISE building and also in their head offices. It is a blind order system with trading ISE members identified upon matching. All information regarding transparency, except standing order IDs, are displayed in the trading system during the sessions. At present approximately 1000 workstations in ISE building and each brokerage house has one remote workstation in their head offices.

ISE members authorized to operate in the ISE Stock Market are marked as "S" in the list of members. At present, there are no fixed commissions for trading of stocks. The fee an ISE member may charge its clients is between 0.2% and 1%. Depending upon the amount and frequency of trading, the fee is negotiable between the member and the client.

For the companies traded on the ISE, the standard "lot size" or the unit of trading is 1 share (1 share = 1 YTL nominal). The system enables members to execute several types of orders such as "limit," "limit value," "fill or kill," "special limit," and "good till date" type orders. Members can enter buy and sell orders with various validity periods of up to one trading day. Unmatched orders without a specific validity period are canceled at the end of the trading session.

Every order involving a price limit is also limited by a maximum lot quantity. Lot limits are either 250, 500, 1.000, 2.500, 5.000, 10.000 or 25.000 lots. The maximum trading limit for an order is YTL 1,5 million /order for all types of orders except special orders. For rights coupons, one round lot represents the subscription coupons of a stock with a total nominal value of 1 YTL.

Special orders are designated depending on the base price and the lot limits allowed for bidding or offering for each stock. Special orders can include shares up to the "block trade" limit, which is at least 10% of the paid-in-capital, and they cannot be partially matched. Special orders are executed upon the approval of floor specialists. Any special order entered into the system can be canceled before it is executed. Special orders are not taken into consideration as registered transactions, but are included in the calculation of the traded value and volume of the market.

The Base Price is determined by rounding the previous session's weighted average price to the nearest price tick. Price margins are generally limited to 10 % above or below the base price. However, in the rights issue market, the margin is 25 %. Upper limits are rounded upwards and lower limits downwards with the appropriate price tick. The best bid, offer and closing prices of stocks, indices and number of stocks are shown on screens and textlite in the trading floors.

The ISE is open from Monday to Friday, and the Stock Market Official Trading Hours are as follows:

National Market, Second National Market & New Economy Market First Session Second Session	09.30 a.m.-12.00 a.m. 14.00 p.m.-17.00 p.m.
Primary Market, Wholesale Market and Official Auction Market	11.00 a.m.-12.00 a.m.
Watch List Market	14.00 p.m.-15.00 p.m.

The ISE accepts the orders only in electronic environment during the Electronic Order Transmission Period between 09:30 and 09:45 as part of the first session and between 14:00 – 14:10 as a part of the second session. This period of the session is designed to handle the mass order transmission and in order to enable this, only electronic means are allowed to transmit orders. No manuel transmission through workstations is allowed during this period. Electronic Order Transmission procedure is subject to existing trading rules and only available for “limit orders”. Orders transmitted to the ISE system are matched in a continuous auction environment according to priority rules based on price and time.

Rights Coupon Market transactions are conducted during the same session of the corresponding market.

Note: The time zone of Turkey is GMT+2 (GMT +3 from late March to late October)

All companies included in the National Market fulfill the listing requirements pre-determined by the ISE. Currently, 100 companies selected from among the listed companies in the National Market are included in the ISE National 100 Index , which is the main index of the ISE Stock Market.

- Settlement period of T+2 days.
- Multilateral netting system
- Payments cleared by same day funds
- Delivery Versus Payment (DVP)

The “Second National Market” was established with the aim of promoting trading in stocks of small and medium size companies incorporated in all parts of the country, in a reliable and transparent environment. The Second National Market consist of companies delisted temporarily or permanently from the ISE's National Market as well as companies that fail to fulfill the listing requirements and lack the necessary qualifications for trading on the ISE's National Market. Companies meeting the criteria for trading on the Second National Market are admitted to this market upon the decision of the Executive Council of the ISE.

- Settlement period of T+2 days.
- Multilateral netting system
- Payments cleared by same day funds
- Delivery Versus Payment (DVP)

The “New Economy Market” was formed in order to enable telecommunication, information technologies, electronic, internet, computer manufactury, software and hardware, media or technology companies with growth potential operating in related fields to offer their stocks to the public via the ISE, which enables trading of such stocks in an organized market. It also provides capital for their investments which, in turn, will contribute to the development of the capital markets in Turkey.

The "Watch List Companies Market" was established with an aim to provide an organized and liquid market for trading of stocks of companies under special surveillance and investigation due to extraordinary situations with respect to stock transactions and/or companies traded on the ISE; disclosure of incomplete, inconsistent and/or untimely information to the public; failure to comply with the existing rules and regulations as well as other situations leading to delisting of stocks and/or dismissal from the related market temporarily or permanently in order to protect investors' rights and public interest. The Watch List Companies Market began to operate on December 4, 1996 and the trading takes place between 14:00-15:00.

The “Wholesale Market” provides for trading of stocks in large quantities. The market permits the sale of stocks which are traded on the ISE's National and Regional Markets as well as those which are not traded on the ISE, through capital increases or sale of stocks of existing shareholders to pre-determined and/or unidentified buyers. Block sale of stocks within the framework of privatization scheme of public entities are also realized in this market.

Settlement of securities traded in the Wholesale Market is realized by the ISE Settlement and Custody Bank Inc. (Takasbank) which is the sole and exclusive central depository in Turkey. Subject to the ISE's approval, the buyer and seller may request Takasbank, in written form, not to settle the securities. The settlement period is T+2 (two work days following the trade date). Delivery Versus Payment (DVP) method is utilized.

Margin Trading, Short-Selling and Securities Lending Margin trading, short-selling, securities lending and borrowing have been regulated by the Capital Markets Board. Starting from April 3, 1995, authorized ISE members have the opportunity to engage in short-selling transactions in stocks constituting the ISE National 100 Index. The list concerning the Securities Lending Margin trading has been changed with a circular since August 24, 1999 as including all the companies traded in the ISE markets.

Trading information, daily market information as well as statistics are disseminated through international and local data vendors on a real time basis. Market Information is also broadcasted via Turkish Radio and Television on teletext on real-time basis in Turkish.

Statistical information as well as corporate news are also provided in the ISE's periodical publications. The ISE publishes daily, weekly, monthly (in Turkish and English) and quarterly bulletins (in Turkish and English). The yearbook of companies, the annual factbook as well as publications introducing the ISE, video cassettes dubbed in English, French, and Japanese are also available. Most of the publications are also available in English.

The companies traded on the ISE are obliged to submit to the ISE their financial statements on a quarterly basis according to the standards required by the Capital Markets Board. The six-month and annual financial results have to be independently audited. In addition to reporting all corporate actions to the ISE, the traded companies are also required to comply with the disclosure requirements.

The Surveillance Department and trading floor specialists monitor inter and intra-day activities to detect any unusual price movements, trading volumes, illegal practices such as manipulation, insider trading and artificial market activities. In addition to computer-assisted surveillance, the Istanbul Stock Exchange scans various news sources and collects information about the financial, legal and managerial positions of traded companies. When any misleading information is encountered, the nature of suspicion and the evidence are reported to the Chairman and CEO of the Istanbul Stock Exchange.

As part of the WAN (Wide Area Network) project, since December 2001, the ISE Stock Market members have been provided the opportunity to route their orders directly to the ISE automated trading system through an interface software that has been developed by the ISE. Thanks to this system, called Ex-API, order transmission speed is accelerated while waste of time due to manual transmission is minimized.

Since December 2001, Stock Market members that have fulfilled the technical requirements have been gradually included in the Ex-API system. By the end of the year 2004 nearly all of the members began using this system. Through Ex-API, members route the orders (either collected or derived by their own back-office systems) directly to the ISE automated trading system and instantaneously receive order and trade confirmations. Nearly % 85 of the total number of orders are being transmitted by ExAPI system. Development process have been continuing on this system which enables members to improve operational efficiency and to reduce costs.