ARTICLE 3 - (1) Terms used in this Directive shall bear the following meanings;

Transcription

1 ISTANBUL SETLEMENT AND CUSTODY BANK INC. BORSA ISTANBUL INC. DEBT SECURITIES MARKET CLEARING AND SETTLEMENT AND COLLATERAL MANAGEMENT DIRECTIVE CHAPTER ONE Purpose, Basis, Definitions and Abbreviations Purpose ARTICLE 1 - (1) The purpose of this Directive is to stipulate the principles and procedures for cash and security settlement, default, collateral, custody, exercise of a right, transfer transactions of the capital market instruments sale and purchase transactions conducted in Borsa Istanbul Inc. Debt Securities Market and other transactions to which these securities are subject, and the membership therein as well as other duties assigned to Takasbank in accordance with the legislation and/or the Board. Basis ARTICLE 2 - (1) This Directive has been prepared in accordance with article 77 of the Capital Markets Law No published in the Official Gazette dated and numbered 28513, article 10 of the Law on Payment and Security Settlement Systems, Payment Services and Electronic Money Institutions published in the Official Gazette dated and numbered 28690, the General Regulation on the Establishment and Operating Principles of the Central Clearing and Settlement Institutions published in the Official Gazette dated and numbered 28662, Istanbul Settlement and Custody Bank Inc. Central Clearing and Settlement Regulation published in the Official Gazette dated and numbered and the relevant legislation Definitions and Abbreviations ARTICLE 3 - (1) Terms used in this Directive shall bear the following meanings; a) Debt Securities: Bonds, share convertible bonds, exchangeable bonds, bills, precious metal securities, and sukukdrawn and issued in accordance with the provisions of the relevant legislation by the issuers in their capacity as debtor as well as the capital market instruments whose nature is accepted as debt instrument by the Board. b) Exchange: Borsa Istanbul Inc. c) GDDS: The government domestic debt securities. ç) EFT: The Electronic Fund Transfer System. d) ESTS: The Electronic Securities Transfer System. e) General Manager: The General Manager of Istanbul Settlement and Custody Bank Inc. f) Collective Investment Institutions: The mutual funds, private pension funds and investment trusts. g) Board: The Capital Markets Board. ğ) CRA: The Central Registry Agency Inc. h) PSDS: The private sector debt securities. ı) Market: Borsa Istanbul Inc. Debt Securities Market. i) Procedure: Istanbul Settlement and Custody Bank Inc. Borsa Istanbul Inc. Debt Securities Market Clearing and Settlement and Collateral Management Procedure. j) System: Takasbank s system. Page 1 /13

2 k) Clearing and Settlement: All of the processes that enable the transfer of cash and/or assets between the parties within the time periods and on the conditions set forth by Takasbank, through fulfillment by the members of the obligations arising in relation to the transactions conducted in the Market. l) Takasbank: Istanbul Settlement and Custody Bank Inc. m) CBRT: The Central Bank of the Republic of Turkey. n) TETS: Takasbank Electronic Transfer System. o) TIC: The cash accounts of the banks at the CBRT. ö) Member: Those who are allowed to become a party to the clearing and settlement services provided by Takasbank for the transactions conducted in the Market. p) Investment Institution: The brokerage houses that have received authorization from the Board to engage in investment services and activities and other capital market institutions whose establishment and operating principles are determined by the Board to engage in investment services and activities, and the banks. r) Directive: Istanbul Settlement and Custody Bank Inc. Borsa Istanbul Inc. Debt Securities Market Clearing and Settlement and Collateral Management Directive. s) Board of Directors: The Board of Directors of Takasbank. ş) Regulation: Istanbul Settlement and Custody Bank Incorporation Central Clearing and Settlement Regulation. CHAPTER TWO Guidelines for Membership Membership ARTICLE 4 - (1) The CBRT and the investment institutions satisfying the conditions stipulated in article 5 may become a clearing and settlement member (2) Institutions who become a member to the Market are also a direct clearing and settlement member pursuant to the first paragraph of article 7 of the Regulation. Direct clearing and settlement members are authorized to perform only the clearing and settlement transactions of themselves and/or of their customers Conditions for membership ARTICLE 5 - (1) The following conditions must be met to become a Clearing and Settlement Member in the Market. a) The trading authorization in the Debt Securities Market should not have been removed due to oppositions to the relevant legislation, b) The agreement whose content is determined by Takasbank should have been signed and submitted, c) The technical infrastructure should have been established and the necessary measures to ensure its operability should have been taken in order to conduct the transactions at Takasbank, ç)the relevant accounts at Takasbank, CRA and the correspondent banks designated by Takasbank should have been opened. (2)If Takasbank acts as a central counterparty in the Debt Securities Market, the additional membership conditions shall be stipulated by the Central Counterparty Regulation. Membership application and its acceptance Page 2 /13

3 ARTICLE 6 - (1) The institutions that will apply for membership are required to submit their application request addressed to the Directorate General of Takasbank together with a letter accompanied by the information and documents affirming the fulfillment of the conditions sought for membership and send the information and documents referred to in article 10 of the Regulation and the below listed documents by enclosing them to this letter to Takasbank. a) Membership application form, b) Authorization certificate (copy), c) Document to be received from the Exchange for their membership in the Market, ç) Membership Agreement and Pre-Agreement Information Form, d)letter of Undertaking for Cash, Securities, Collateral, Conditional Virement and Electronic EFT Instruction, e) Implementation Agreement for the Customer Instructions to be delivered to Istanbul Settlement and Custody Bank Inc. via Fax Machine, f) Other documents to be requested by Takasbank in accordance with the relevant legislation. (2) In order for the membership applications to be eligible for assessment by Takasbank, the information and documents referred to in the first paragraph of this article as well as other documents to be requested by Takasbank should have been completed. Takasbank shall review the filed applications in terms of whether the conditions sought in article 5 are met or not. The decision made by Takasbank on the application shall be notified to the concerned in writing. (3) In order to commence its operations at Takasbank, the institution whose membership application is accepted, should; a) deposit the membership collateral, b) authorize the personnel who will trade on behalf of the member on Takasbank system, within 1 month from the notification that its membership application has been found eligible. Otherwise the membership permission granted to the relevant institution shall be cancelled. (4) The date on which the obligations referred to in the 3rd paragraph have been fulfilled shall be deemed the date that the institution has become a clearing and settlement member in the Market, and the member shall become entitled to trade from that date. Obligations of the members ARTICLE 7 - (1) The Members are obliged to comply with the following issues: a) Act in accordance with all rules and principles laid down by this Directive and other relevant legislation for the Market clearing and settlement transactions, b) Behave in accordance with the principles of honesty and good faith towards their customers and other members, c) Fulfill all dues, fee and commission payments and other liabilities requested by Takasbank in due time, ç) If stipulated by Takasbank, adhere to the arrangements for taking general and special nature insurances which would cover any financial and legal liability that might be incurred against other members and take other measures in such nature, d) Furnish all types of information and documents to be requested on issues deemed necessary by Takasbank with regard to the business and transactions within the scope of the Directive, and provide all types of support in the investigations to be carried out by the officers of Takasbank, Page 3 /13

4 e)adapt within the prescribed time periods to the system revisions to be made by Takasbank and participate in the tests they are invited, f) Make notification to Takasbank within 15 days in case of transfer of shares providing direct or indirect management control, g) In addition to the books and records required to be kept legally, keep other records determined by Takasbank, draw the information and documents in due form; and convey them to Takasbank in a periodic manner or at times requested by Takasbank, and maintain such documents and records for a period of 1 year, ğ) Inform Takasbank of any change in the head office address, board of directors and general manager at the latest on the business day following the date on which the change has happened, h) Fulfill other obligations under the Directives within their time periods and in a complete manner. (2) If any Member foresees that it will be unable to either partially or wholly fulfill its obligations, it shall be obliged to notify the situation immediately to the Board and Takasbank together with all substantiating information and documents containing the reasons thereof. Such notification shall not constitute an impediment for Takasbank to take the necessary measures stipulated in the Directive. (3) The members shall be responsible for the performance of all obligations related to the transactions they have conducted in accordance with the activities stipulated under the Directive as well as the works executed by their employees pursuant to their duties. (4) The members shall conduct their transactions via remote access by using the user codes and passwords allocated to the personnel they have authorized. The responsibility arising from the transactions conducted on the system by using the allocated password as well as from the use of the password by unauthorized people shall belong to the member. (5)In cases where access to the system is not possible, the transactions can be executed by Takasbank in accordance with the written instructions to be given by the people who have authority to represent the member. Suspension of member activities and removal from membership ARTICLE 8 - (1) If it is determined that the member has lost the membership conditions set forth in article 5, Takasbank shall be entitled to ask the fulfilment of such obligations within an appropriate time period to be allotted thereof provided it shall not exceed 3 months. (2) In case of occurrence of risks of a significant nature which would jeopardize the secure and uninterrupted functioning of the clearing and settlement system as a result of the loss of the membership conditions or the non-fulfillment of the obligations, Takasbank shall be entitled to either temporarily suspend the activities of the member entirely or on a transaction basis without designating any time or remove the member from the membership. This state of affair shall be informed to the Board and the Exchange via the fastest means of communication. (3) If the trading authorization of the member is revoked by the Exchange, the market operator, the Board or the competent authority, the member shall be removed from the clearing and settlement membership by Takasbank. (4) The obligations of members that have arisen from the transactions included in the scope of the Directive, of whose activities are suspended, who are removed from the membership or wish to depart from the membership upon their own written request, shall prevail. (5)Takasbank shall be entitled to take all types of measures it deems necessary, including the following, to ensure completion of the clearing and settlement transactions of the institution whose activities are suspended or who is removed from the membership. Page 4 /13

5 a) restraining the member from trading directly on its accounts at Takasbank, b) using the settlement receivables of the member to cover its settlement debts, c) resorting to the collateral of the member, ç) restoring to the member s assets held in its free accounts at Takasbank. Departing from the membership ARTICLE 9 - (1) Institutions wishing to depart from the membership shall inform Takasbank of this situation in writing. Along with the obligations of the relevant member within the scope of the Regulation; a) copies of the documents received from the Exchange which substantiate that it has terminated its Market membership should have been delivered to Takasbank, b) all future-dated transactions it has conducted in the market should have been fully liquidated, c) it should have no liability against Takasbank. CHAPTER THREE Clearing and Settlement Transactions General Principles ARTICLE 10 - (1)The members conduct their transactions by accessing to Takasbank system through the web infrastructure. (2) The rights and obligations of the members arising from their transactions subject to the clearing and settlement are concluded on account by Takasbank over the designated accounts. (3) No Takasbank guarantee exists for the finalization of the transactions on their value date and within their time periods. Finalization of the clearing and settlement transactions within their time periods is conditional upon the timely fulfillment by the debtor members of their obligations. (4) Settlement of the transactions conducted by using the foreign capital market instruments and the Equity Repo Market and the settlement of the transactions in other markets are processed in a separate manner. (5) Settlement of the outright purchase and sale transactions conducted in the Market are performed on the value date, whereas the settlement of the repo-reverse repo transactions are performed on the start and expiry dates by using the relevant cash/security settlement accounts. Markets/sub-markets to which the clearing and settlement service is provided ARTICLE 11 - (1) The settlement transactions of the following sub-markets included in the structure of the Market are performed by Takasbank. a) Outright Purchases and Sales Market, b) Repo-Reverse Repo Market, c) Interbank Repo-Reverse Repo Market, ç) Repo Market for Specified Securities, d) Offering Market for Qualified Investors, e) Equity Repo Market, f) International Bonds Market, g) Eurobond Negotiated Deals Platform, Page 5 /13

6 ğ) Other sub-markets to be established within the structure of the Debt Securities Market. (2)The settlement of the foreign currency denominated transactions conducted in the sub-markets within the structure of the Market shall be concluded by Takasbank by using a correspondent bank. Central clearing and settlement ARTICLE 12 - (1) Except for the exemptions introduced by the Board, the settlement of all transactions conducted in the Market are performed by Takasbank. Settlement dates and periods ARTICLE 13 - (1) The settlement of TL denominated transactions conducted in the Market shall be performed on the same day (T+0), whereas the settlement of the foreign currency denominated transactions shall be performed one day after the transaction date(t+1). Repo-reverse repo contracts, on the other hand, shall be settled on the start and expiry dates of the transaction. The settlement of the future-dated transactions shall be performed on the value date. (2)In determining the settlement periods, the business days on which Takasbank and its correspondent banks are officially open shall be taken into account. (3) The settlement periods to be applied on half- days shall be determined and announced to the members by Takasbank. (4) It is not possible for the parties to finalize the settlement transactions by fulfilling their security or cash obligations before the settlement date. (5) The settlement deadlines of the Market can be changed by the Board of Directors of Takasbank by obtaining the opinion of the Exchange. (6)Cash and security settlement obligations related to the transactions conducted in the Market shall be fulfilled within the hours designated in the Directive. Otherwise the default provisions shall be applied. (7) The settlement periods can be temporarily changed by Takasbank General Manager due to the problems arising from the clearing and settlement, custody, payment or market operating systems. Currency ARTICLE 14 - (1) In the payment of the cash obligations arising from the clearing and settlement transactions, the currency of the contract executed in the Market shall be used. Finality of settlement ARTICLE 15 - (1) The clearing and settlement instructions and transactions of the capital market instruments and their payment transactions can neither be revoked and nor can be cancelled including the state of temporary or permanent suspension of activities of the members and initiation of liquidation actions at the administrative and judicial authorities. (2) Upon any notification served to Takasbank for suspension of member activities or all types of measures and decisions regulated by the laws, the Exchange shall be informed thereof via the fastest means of communication to stop its Exchange transactions. (3) The settlement transactions of all contracts executed in the Market and transmitted to the clearing ans settlement system shall be concluded. (4) Collateral established by the Member through its available cash and security balances at Takasbank shall be used to terminate its obligations. To be able to take action in accordance with the decision served to Takasbank under the second paragraph, all obligations of the Member against Takasbank should have been completed. Page 6 /13

7 Settlement accounts ARTICLE 16 - (1) All members wishing to trade in the markets and sub-markets listed in article 11 are obliged to open the cash and security accounts necessary for the execution of the clearing and settlement transactions both at Takasbank and the CRA and at the correspondent bank to be designated by Takasbank in accordance with the nature of the transaction. (2) Cash/security obligations due to the settlement shall be fulfilled on account. Netting ARTICLE 17 - (1) Except for the sub-markets referred to in the fourth paragraph of article 10, the cash amounts of the transactions conducted in all sub-markets at the Market shall be netted off. (2) Transactions conducted in the Outright Purchases and Sales Market, Offering Market for Qualified Investors and Repo Market for Specified Securities and the securities to be received due to repo redemptions in all submarkets shall be netted off and the net payable or receivable shall be calculated on a security basis. Except for the chain transactions, securities purchased by reverse repo from the Repo-Reverse Repo Market and the Interbank Repo-Reverse Repo Market at the Exchange shall not be included in the netting process. These securities shall be kept blocked until the redemption date in the On-Exchange Reverse Repo Collateral Depo Account of the relevant member at Takasbank. (3) The outright purchases and sales market transactions to which securities payable in foreign currency are subject and the transactions between the repo-reverse repo markets shall not be netted off. Delivery versus payment principle ARTICLE 18 - (1)In the clearing and settlement transactions, the delivery versus payment principle shall be applied. The settlement receivables of the members failing to fulfill their settlement obligations shall not be paid. (2) The receivables released against the partially fulfilled obligations shall also be paid partially. Blocking, unblocking and the order of liquidation ARTICLE 19 - (1) The settlement receivables of the members shall be blocked starting from most liquid to least liquid against their settlement debts. Unblocking of the receivables, on the other hand, shall be made from least liquid to most liquid. (2)The blocking operation shall be performed starting from the security that has the nearest maturity, whereas the unblocking operation shall be performed starting from the security that has the farthest maturity. Special provisions for the collective investment institutions ARTICLE 20 - (1) The responsibility for the settlement of the transactions conducted in the Exchange on behalf of the collective investment institutions shall belong to the direct clearing and settlement member executing the transaction. Debt securities - clearing and settlement transactions ARTICLE 21 - (1) The clearing and settlement of the outright purchase and sale transactions conducted in the Market shall be performed on the value date, whereas the clearing and settlement of the repo-reverse repo transactions shall be performed on the start and expiry dates by using the relevant cash/security settlement accounts. (2) The allocation of the receivables released against the debts closed during the netting process shall be made on a pro-rata basis. Page 7 /13

8 (3) In case of lack of sufficient balance in the settlement pool, the members who closed their security and/or cash debts shall be ranked based on the time priority principle and the balance occurred in the settlement pool shall be allocated according to this rank. (4) In case the receivable balance released as a result of the debt closing operation is not available in Takasbank Pool Account, a rank of receivables shall be created for cash and each security. In creating the rank of receivables, the hour in which the debt closing operation enabling the release of the relevant receivable was performed in Takasbank system shall be taken into account. Offsetting operations between the markets ARTICLE 22 - (1) Between the markets operated by Takasbank and the markets/sub-markets to which clearing and settlement service is provided, it is possible to offset the receivables due from a market/sub-market against the debts arising out of other market/sub-market transactions by placing a cash and/or share offsetting instruction. (2) The markets/sub-markets for which an offsetting instruction can be placed shall be determined and announced to the members by Takasbank. CHAPTER FOUR Default and Unjust Treatment Payment Transactions Debt Securities Default Principles ARTICLE 23 - (1) The members who fail to fulfill their obligations arising from the transactions conducted in the Market within the hours designated in the Procedure shall be deemed to have been defaulted without the need to serve any further notice. (2) A pre-default interest shall be collected from the members who fulfill their obligations with the same day value but after the prescribed hour, whereas a default interest shall be collected from the members who fail to fulfill their obligations with the same day value but fulfill on the subsequent days. (3) The default penalty shall be calculated on the basis of the calendar days between the date of default and the date on which the obligation has been fulfilled. (4) No pre-default interest shall be calculated in the event the CBRT fulfills its obligations related to the transactions it has conducted in the Market until EFT closing hour on the settlement date. Default interest ARTICLE 24 - (1) From the member who fails to fulfill its obligation within the prescribed time periods, a default interest calculated over the unfulfilled obligation amount for the period elapsing from the date it has defaulted to the date it has fulfilled its obligation shall be collected together with other legal liabilities thereon. (2) In determining the default interest of the Debt Securities Market, the opinion of the Exchange shall be obtained. (3)A default interest shall be charged to the defaulting member up to the amount to be calculated over the unfulfilled obligation amount based on the coefficients designated in the Procedure by using the higher of the weighted average overnight interest rates occurred in the repo-reverse repo markets where the government securities are traded, in CBRT Interbank Money Market or in Takasbank Money Market formed by the Exchange. (4) Upper and lower limits shall be applied to the pre-default interests. These limits shall be determined by the Board of Directors by taking account of the re-valuation rates announced by the Ministry of Finance each year. (5) For the obligations failed to be fulfilled within the same day, the upper limit shall not be applied. Page 8 /13

9 (6)If the obligation being defaulted is denominated in a foreign currency, TL value of the cash or security shall be calculated by taking the foreign currency buying rate announced by the CBRT on the relevant value date as the base. On the other hand, in case it is defaulted in any foreign currency denominated obligation, Takasbank may also decide to calculate the default interest over the coefficients that it might determine separately for each foreign currency. (7) In case of reoccurrence of the default in the quarterly period, the coefficient shall be increased by 1 point for each additional default. Calculating the default interest ARTICLE 25 - (1) The default interest shall be calculated in the manner stipulated in the Procedure. Terminating the event of default ARTICLE 26 - (1) The cash/security obligations failed to be fulfilled on the value date and the cash/security balances kept blocked against the obligations shall be notified to the Exchange until the next business day by the hour designated in the Procedure. An ex-officio sale/purchase transaction shall be conducted by the Exchange by using the blocked receivables to terminate the event of default. (2) Transactions that are conducted to terminate the default shall not be netted off with the settlement debts of the member. (3) The defaulting member shall be obliged to terminate its event of default at the designated time notified to itself. Accrual, notification and collection ARTICLE 27 - (1)The accrued default interest shall be paid within 1 business day after the accrual date together with other legal liabilities thereof. (2) The notification of the accrued default interest shall be made in electronic environment through the member screens. Upon delivery of the notification in electronic environment, the member shall be deemed to have received the notification without requiring any further notice or advice. (3) The default interest and other legal liabilities failed to be paid, albeit accrued, by the member within their time periods shall be collected ex-officio by Takasbank from the free account of the member on the next business day. (4) The default penalties shall be transferred to the Guarantee Account until the date on which Takasbank will provide service as the central counterparty for the debt securities. Takasbankdefault committee ARTICLE 28 - (1)The member to whom a default interest has been accrued may object at Takasbank based on the reasons that the default has occurred without its own fault and due to problems arisen from the relevant central depository system or payment system or a material mistake has been made in the calculation of the default interest. (2)The objections shall be made at the latest within 1 week after the default accrual date with a letter accompanied by the documents related to the objection. (3)The objection of the defaulting member shall be evaluated and resolved by the Default Committee established within the structure of Takasbank in accordance with article 35 of the Regulation. (4) If the objection made by the member is justified, the default interest shall not be applied and if it has already been collected, the relevant amount shall be refunded to the member. (5) If the objection is declined, the decision shall be informed to the relevant member via a letter. Page 9 /13

10 (6) The objection shall not inhibit the payment of the default interest within its time period. Unjust Treatment Payment ARTICLE 29 - (1) An unjust treatment payment shall be made in the manner stipulated in the Procedure to the member to whom the delivery or payment has been failed to be made on the settlement date due to the default of the member in the fulfillment of its commitment. CHAPTER FIVE Transactions Relating to Custody and Exercise of Rights Custody Service ARTICLE 30 - (1) Institutions that have become a Takasbank member by satisfying the membership conditions can receive custody service. (2) Takasbanknezdindekiüyehesaplarındabulunanborçlanmaaraçlarıniteliğindekisermayepiyasasıaraçlarıbakiyele riüyebazındaamaçlarınagöredetaylandırılanfarklı depo hesaplarındavetakasbank mal varlığındanayrıolarakizlenir. The balances of the capital market instruments qualified as debt securities that are held in the member accounts at Takasbank shall be monitored separately from Takasbank s assets, in different depo accounts detailed on customer basis according to their purpose. (3) The custody service shall be provided by Takasbank in accordance with the principles stipulated in the Procedure. Transactions Relating to Exercise of Rights ARTICLE 31 - (1) The transactions relating to exercise of rights (redemption/coupon payments) of the debt securities safe kept at Takasbank shall be performed by Takasbank. (2) Redemption and coupon proceeds of the foreign currency payable debt securities shall be paid to the member s account at the correspondent bank. (3) Redemption and coupon proceeds of the debt securities held as collateral at Takasbank shall be paid to the extend they remain over the required collateral amount. CHAPTERSIX Transfer Transactions General Principles ARTICLE 32 - (1) The memberscan transfer the debt securities held in their custody accounts at Takasbank between their own accounts or to another member account. (2) Transfer transactions among the members can be executed in the system in two ways: free virement and conditional virement. In addition, it is also possible to transfer securities from the accounts at Takasbank to another account at the CBRT via ESTS. (3) Execution of the transfer transactions through the user codes and passwords allocated to the personnel authorized by the members and within the hours designated by Takasbankin the Procedure is essential. (4) The time periods to be applicable on half-day official holidays shall be separately determined and announced to the members by Takasbank. (5) The time periods applicable for the transfer transactions can be changed by the approval of the General Manager. Page 10 /13

11 (6) Principles for the transfer transactions can be differentiated by Takasbank according the type of the asset and transaction. CHAPTER SEVEN Repo Reporting and Depo Transfer Transactions Repo reporting and depo transactions ARTICLE 33 - (1) Banks and brokerage houses are obliged to report the off-exchange repo and reverse repo transactions they have conducted with their customers or other brokerage houses and banks as well as those whose term has been broken (irregular maturity) to Takasbank until the next business day by 10:45 at the latest. (2) The capital market instruments subject to the off-exchange transactions must be deposited in the Repo Block Account at Takasbank. (3) In case the debt securities issued by the Undersecretariat of Treasury at abroad are made subject to the repo and reverse repo transactions being conducted; the member is required to; a) open an account by signing the Supplementary Agreement for International Securities Correspondence within the scope of Takasbank foreign capital market instruments correspondence service, in addition to itsexisting custody agreement with Takasbank, b) transfer the capital market instruments subject to the transaction to the account opened in the name of Takasbank at the correspondent bank, and c) deposit the capital market instrument held in its Free Depo Account to the Repo Block Account. (4) In line with the agreement of the brokerage house or the bank conducting the repo and the customers, the capital market instruments subject to the repo transaction can be safe kept in the account at Takasbank of another investment institution authorized by the CMB to provide depository service. (5) Reporting of the capital market instruments subject to the non-takasbank settled repo-reverse repo transactions conducted in the Market shall be made directly to Takasbank on the start date of the transaction. (6) Transactions conducted with the CBRT in accordance with the Open Market Operations shall not be included into scope of the reporting. (7) The principles and procedures for the depo conditions and the reporting shall be determined and announced by Takasbank. (8) In case of identification of any opposition to the principles stipulated by Takasbank, a notification shall be made to the supervision authority with which the brokerage house or the bank is related. CHAPTER EIGHT Miscellaneous and Final Provisions Clearing and Settlement Membership TEMPORARY ARTICLE 1 - (1) Banks and brokerage houses trading in the Market as of the date that the Procedure has entered into force shall be directly accepted as a member to Takasbank with the clearing and settlement member status Guarantee Account Page 11 /13

12 TEMPORARY ARTICLE 2 - (1) A guarantee account shall be established to ensure the allocation of the cash settlement receivables in the shortest time possible in case of occurrence of any event of default in the fulfillment of the settlement obligations. (2) The Guarantee Account shall be comprised of the cash amounts transferred by the relevant Exchange and the default penalties charged on the cash and security defaults. (3) The principles for use of the Guarantee Account shall be stipulated by the protocol signed between the Exchange and Takasbank. (4) The balance of the Guarantee Account shall be used by Takasbank, if required, at the end of the fulfillment period of the settlement obligation. The Guarantee Account shall enable the completion of the settlement transactions within their time periods to the extent its account balance is sufficient. However, no guarantee or commitment exists for the completion of the settlement transactions within their time periods. (5) Securities corresponding to the cash amount subject to the default shall be blocked as the collateral of the transaction. (6) The Guarantee Account may be liquidated in the event Takasbank becomes a Central Counterparty for the transactions conducted in the Debt Securities Market or upon resolution of the Exchange. If liquidated, it shall be announced to the members. Collateral TEMPORARY ARTICLE 3 - (1) For the collateral, trading limit reserves and/or depreciation/ appreciation reserves to be requested for the transactions conducted in the Market, the regulations of the Exchange shall apply until the date on which Takasbank will start providing service as the Central Counterparty. (2) Safekeeping of the collateral and reserves at Takasbank is essential. Procedures ARTICLE 34 - (1) Principles and procedures relating to the services included in the scope of the Directive shall be stipulated by the Procedure. The Procedure shall enter into force by the approval of the General Manager. Announcements ARTICLE 35 - (1)Details and amendments related to the issues included in the scope of the Directive shall be announced to the members through the General Letters to be published by Takasbank. Exemptions ARTICLE 36 - (1)The following exemptions shall be applied to the transactions to which the CBRT is a party in the Repo-Reverse Repo Markets. a) The cash and security balances of the CBRT to be received against the cash and/or securities it owes as a result of the transactions it has conducted in the Market are not blocked, and they are released without waiting for the fulfillment of the obligations. The receivables are transferred to the CBRT upon their transfer from the cash/security settlement pool account to the CBRT accounts at Takasbank. In making the transfers from the settlement pool account, the receivables of the CBRT are allocated with priority. b) In the Repo-Reverse Repo Markets, securities subject to the reverse repo transactions to which the CBRT is a party are not blocked at Takasbank. They are transferred to Takasbank s relevant account at the CBRT ESTS system. c) Transactions in Takasbank system are performed by Takasbank on behalf of the CBRT. Commissions Page 12 /13

13 ARTICLE 37 - (1) Fees related to the clearing and settlement services under the Directive shall be determined in accordance with the principles stipulated in article 61 of the Regulation and announced to the members. (2) Transactions conducted by the CBRT at Takasbank are exempt from any commission. Enforcement ARTICLE 38 - (1) The Directive shall enter into force on 3 February Execution ARTICLE 39 - (1) The provisions of the Directive shall be executed by the Board of Directors. Page 13 /13