The Law nr.7262 on Prevention of Financing of Proliferation of Weapons of Mass Destruction, adopted on December 27, 2020 at the Grand National Assembly of Turkey, introduces many regulations to enhance transparency of shares and share transfers, and to contribute to the environment of business confidence to the extent that any and all information on the owners of bearer shares and shares thereof is entered to the system on record basis.
As per the former version of the Section 486, under the Turkish Commercial Code, on issuance of share certificates at the incorporated companies; it was sufficient to have the resolution, adopted for issuance of the bearer shares by the board of directors, registered and announced, and then to publish the same on the website of the company in order to ensure that the bearer shares are valid at the incorporated companies.
However; the Section 486 has been supplemented by the Section 31 of the Law nr. 7262, introducing the requirement to notify the Central Registry Agency of the details on the share owners and the shares held by the same, before distribution of the bearer share certificates at the incorporated companies.
Accordingly; the provisions, set out under Turkish Commercial Code nr. 6102 regarding the bearer share certificates, have been amended by the Law nr. 7262, making it mandatory for the incorporated companies to notify the Central Registry Agency of the details on the bearer share certificates, and transfer of such shares. Moreover; it has been set out, under the paragraph a of the Section 43 on effect of the Law nr. 7262, that the provisions on the bearer share certificates (Sections 28-34) shall enter into effect as of April 1, 2021.
The owners of the bearer shares are required to apply with the incorporated company until December 31, 2021 together with the share certificates to be notified to the Central Registry Agency. Upon such application, the board of directors of the incorporated company shall be obliged to notify the Central Registry Agency of the owners of bearer shares, and the shares held by the same, in 5 business days.
Section 562 of the Code nr. 6102 has been supplemented by the Section 33 of the Law nr. 7262, setting out that any person, failing to observe such requirement to notify as included under the section 486 thereunder – in other words; any person who fails to notify the Central Registry Agency of the owners of bearer shares, and the shares held by the same before distribution of such share certificates to their owners - shall be imposed with an administrative fine of 20 thousand TRY.
Section 562 of the Code nr. 6102 has also been supplemented by the Section 33 of the Law nr. 7262, setting out that any person, failing to observe such new requirement to notify the transfer of bearer shares as included under the section 489 thereunder – in other words; any person who fails to notify the Central Registry Agency although they have taken over bearer such shares - shall be imposed with an administrative fine of 5 thousand TRY.
Owners of bearer shares are required to apply with the respective incorporate companies until December 31, 2021 in order to ensure that the bearer shares held by the same are notified to the Central Registry Agency; otherwise, they shall be imposed with administrative fine, and in case of any failure to file such application, they may not exercise any of the statutory rights, granted thereto regarding their shares, until performance of such application.
The Ministry of Trade has been granted with the authority to set out the principles and procedures, to be followed in notification of the Central Registry Agency of the bearer shares, and registration thereof, as well as the fees to be collected for such purpose. Accordingly; the principles and procedures on this matter, as well as the fees to be collected for such purpose shall be set out under a communiqué to be promulgated by the Ministry of Trade.
Source: The Official Journal, dated 31/12/2020 and bearing the Issue number 31351 (5th bis.), publishing the Law nr.7262 on Prevention of Financing of Proliferation of Weapons of Mass Destruction
