Türkçe
The regulations regarding bearer shares in the Turkish Commercial Code (“TCC”) was amended with Articles 29 to 34 of the Law No. 7262 on the Prevention of the Financing of the Proliferation of Weapons of Mass Destruction (“Law”), which entered into force upon publication in the Official Gazette dated December 31, 2020.
In accordance with these amendments; in joint stock companies, bearer share certificate holders are obliged to notify the Central Securities Depository of Turkey (“MKK”) about the shares they own and the share transfers made.
What is the Scope of Bearer Shareholders’ Notification Obligation Regarding the Shares?
With the amendments made in the TCC, the obligation to notify MKK is imposed on bearer shareholders regarding both the shares they hold and the transfer of these shares.
Prior to the amendment, bearer shareholders were not obliged to notify any institution regarding the share certificates they hold. Pursuant to the previous version of Article 417 of the TCC, the board of directors took into account the entry cards in terms of bearer share certificate holders while arranging the list of attendees to the general assembly.
However, with the amendment made to Article 486 of the TCC by the relevant Law, the provision of “Information regarding bearer shareholders and their shares are notified to the Central Securities Depository of Turkey before distribution of the shares to the shareholders” was added to the article. In that respect; now, based on the notification of bearer share certificate holders in joint stock companies to MKK, information regarding the bearer shares will be registered to the registry system.
The said notification obligation must be fulfilled by latest 31.12.2021. In accordance with the Provisional Article 14 added to the TCC by Law; those who have bearer shares are obliged to apply to the joint stock company with their share certificates in order to be notified to MKK until 31/12/2021. The procedures and principles regarding the notification to be made to MKK and the fees to be charged in this context will be determined by the communiqué to be issued by the Ministry of Trade.
What are the Consequences of Non-Fulfillment of Notification Obligation?
In accordance with the Provisional Article 14 added to the TCC by Law; if those who have bearer shares do not apply to a joint stock company together with the shares to be notified to MKK until 31/12/2021, they cannot use their rights related to the shares arising from the TCC until the required application is made.
In addition; pursuant to Provisional Article 14; those who do not make the notification mentioned above will be imposed an administrative fine pursuant to paragraph 13 of Article 562 of the TCC.
What is the Scope of Bearer Shareholders’ Notification Obligation Regarding the Transfer of Shares?
Prior to the amendment; pursuant to Article 489 of the TCC, the transfer of bearer shares was only valid upon the passing of possession of the shares. In that respect; in order for a joint stock company shareholder to transfer the bearer share certificate, it was sufficient to only deliver the share certificate to the transferee. However, after the amendments made in the TCC, it will be necessary to make a notification to MKK in order for the transfer of the bearer share to be valid.
The said notification obligation will be effective as from April 1st, 2021.
What are the Consequences of Non-Fulfillment of Notification Obligation?
In the event that a notification is not made to MKK, those who own bearer shares will not be able to exercise their rights arising out of the Law until the necessary notification is made. The date of notification made to the MKK shall be taken as basis for the assertion of rights related to bearer shares against the company and third parties.
ERKUT LAW OFFICE
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