Authorization of Members by the Capital Markets Board

Authorization of Members by the Istanbul Stock Exchange

Supervision of Members

Suspension or Prohibition of Trading Activities

• Investment and Development Banks
• Commercial Banks (A-O)
• Commercial Banks(P-Z)
• Brokerage Houses (A-D)
• Brokerage Houses (E-N)
• Brokerage Houses (O-Z)

According to an arrangement by the Capital Markets Board on 15th August, 1996, banks intending to operate in the Equities Market transferred their stock market operations to the brokerage firms which they have either took over or established.

• Branches and Agencies

Authorization of Members by the Capital Markets Board

Before engaging in activities in the capital markets, all intermediary institutions must be authorized by the Capital Markets Board which is the regulatory and supervisory body of the Turkish capital markets.

Only brokerage houses and banks authorized by the Capital Markets Board may become members of the ISE. Banks and brokerage houses admitted to membership by the Executive Council of the ISE shall be granted ISE Membership Certificate which indicates the markets in which the relevant member is authorized to operate.

The authorizations of each ISE member consist of the following:

• Primary market operations,
• Secondary market operations,
• Portfolio management,
• Providing investment consultancy services,
• Dealing in repo/reverse-repo operations,
• Margin trading, short-selling and securities lending.
• Intermadiation in derivatives instruments transactions.

All intermediary institutions including banks willing to engage in capital markets operations, are required to meet specific qualifications outlined in the Laws and Communiqués of the Capital Markets Board. In addition to minimum capital requirements, other conditions required by the Capital Markets Board should also be met.

The Capital Markets Board grants permission to brokerage houses for opening branches and agencies while banks are subject to approval by the Banking Regulation and Supervision Agency for establishing branches.

Authorization of Members by the Istanbul Stock Exchange

All brokerage houses and banks are reviewed for eligibility for ISE membership by the Executive Council of the Istanbul Stock Exchange. Members do not necessarily trade in every market available at the ISE. ISE members may be authorized to trade in more than one market. All intermediary institutions must deposit the collateral amount determined specifically for each market of the ISE in which they may operate. The members are authorized by the ISE to operate in the following markets:

• stocks
• bonds, bills and real estate certificates
• repo-reverse repo
• odd-lot (off-exchange)
• foreign securities market international bonds

The ISE Members trade in the markets of the Istanbul Stock Exchange through their representatives. The ISE provides training for the ISE Member representatives designed specifically for the type of market in which they operate. Only those member representatives who have successfully concluded the training are granted authorization to operate in the ISE markets.

Supervision of Members

Comprehensive supervision and auditing of members are undertaken by the Capital Markets Board and by the Istanbul Stock Exchange. ISE members are obliged to present operational figures both to the Capital Markets Board and the Istanbul Stock Exchange upon request. The Istanbul Stock Exchange is also empowered to seek access to the records of members when required. Banks are also subject to the supervision of the Central Bank and the Banking Regulation and Supervision Agency.

Suspension or Prohibition of Trading Activities

As the regulatory and supervisory body, the Capital Markets Board has the right to suspend or prohibit the trading activities of member intermediaries .

The Istanbul Stock Exchange reserves the right to accept or deny the membership of an intermediary institution that has obtained a brokerage license from the Capital Markets Board. There are certain cases when the Istanbul Stock Exchange can suspend the trading activities of a member or cancel, permanently, the membership of an intermediary institution.The details of such cases are outlined in the ISE Regulations.

Breakdown of Monthly Transactions by Members