The Communiqué on Leasing, Factoring and Finance Companies

Transcription

1 The Communiqué on Leasing, Factoring and

2 The Communiqué on Procedures and Principles for Establishment and Operations of Financial Leasing, Factoring and Financing Companies ( Communiqué ) by Banking Regulation and Supervision Agency ( BRSA ) has been published in the Official Gazette numbered and dated 15 February The Communiqué clarifies variable provisions regarding the scope, definitions and establishment methods which are regulated by the New Leasing, Factoring and Financing Companies Law numbered 6361 ( Law ) and the aforesaid regulations are summarized in below: 1- The procedures and principles regarding operations subject to permission have been determined on the basis of operation. Under the Communiqué, the following operations of the companies is subject to the permission of BRSA. The procedure of permission application of these operations is regulated in detail by The Communiqué, : Establishment of the company, Permission for operation, Opening a branch in Turkey and abroad, Amendment of articles of association and capital increase, Acquisition and transfer of shares Merger, spin-off and liquidation. 2- The documents that will be appended to the letter of application in the establishment of a company have been enumerated. As per the Communiqué, some of the documents required to be attached to the letter of application to be submitted to BRSA for the establishment of a leasing, factoring or financing company ( company ) are as follows: Activity program that contains certain details, The draft of articles of association, The criminal record certificate of individual founders and other individuals, The report prepared by sworn-in certified public accountants regarding the financial situation of individual founders. Personal background of members of the board of directors, 2

3 The financial statements and income statements for the last 3 three years of corporate founders that are certified by sworn-in certified public accountants. The report prepared by one of the rating companies for the founders which are banks or financial institutions, if any. The commitments in various issues stated in the appendices of the Communiqué, For the transactions performed with BRSA, the form of proxy given to person authorized to represent the founder/founders- if any, The certified public accountant report which will be prepared about the financial situation of the individuals who commit 10% and more than 10% of the capital, Furthermore, if the founders are foreign bank or financial institution, some of the documents mentioned above are not required. However, for these institutions, some additional documents are required to be sent to the BRSA. For example; Decision samples taken by public authorities regarding establishment of a company in Turkey The consolidated independent audit reports for the last 5 years. It is worth noting that the minimum paid in capital in cash and free of collusion of the companies has been determined as TRY under the Law. 3- The procedures and principles regarding obtaining the permission for authorization The companies are required to apply to BRSA with the documents determined in the Communiqué in 6 months after obtaining the permission for establishment from BRSA in order to obtain the permission for authorization. 4- The procedures and principles regarding opening a branch in Turkey and abroad. Under the Communiqué, each branch to be opened in Turkey or abroad must have at least TRY and operate in line with the standard rate in the Communiqué. The Communiqué has also brought a condition that in order to open a branch in abroad, there should be no obstacle for supervision of BRSA in the country where the branch will open. Furthermore, under the Communiqué, movement of a branch in one country to another country is subject to the principals of opening a new branch. Moreover, as per the Communiqué, in terms of the agreements signed with the banks, except performing the activity of product marketing and the information exchange with the clients, using the location of the banks thereby using company s own staff and information system is subject to the principals of opening a branch in Turkey. 3

4 5- Detailed explanations have been brought related to amendment of articles of association and capital increase. Drafts of the amendments on articles of association as well as the relevant decision of the board of the directors must be sent to the BRSA. Furthermore, under the Communiqué, it has been stated that the part of capital that is not increased in accordance with the legislation will not be considered in equity account. 6- The procedures and principals regarding acquisition and transfer of the company's shares. The requirement of make noticement to BRSA for the transfers of shares registered to share ledger of the company within one month after the transfer is brought by the Communiqué, even these are not subject to the permission of BRSA. 7- Detailed regulations have been brought for the permission of merger, spin-off and liquidation. 8- The corporate governance principles for the subjects determined in the Law have been regulated. By the Communiqué, the principles of the corporate governance have been regulated for the following subjects: The notifications related to the board of directors members, general manager and deputy general manager Subordinated debts Standard rate Internal control system Establishment of information system Risk management Independent audit In the Communiqué, the documents that are required to be appended to the letter of application to be submitted to BRSA for the permission of merger and spin-off have been enumerated. In case of liquidation, it is required to apply to BRSA with the board of directors decision regarding liquidation. 4

5 9- The corporate governance principals have been regulated in detail. By the Communiqué, the concept of subordinated debts has been defined and it is stated that the loans provided by the company will be considered as subordinated debt in case such loans have the qualifications under the Communiqué, Moreover, the part of subordinated debts which exceeds the %100 of the sum of other equity components are not considered in equity account. Furthermore, under The Communiqué, the companies must create an effective and sufficient internal control system for the purpose of performing their activities in line with the law, other related regulations, companies internal policies, rules and precedents and receiving information in due time. In addition to the above, The Communiqué has brought the condition that the audit of companies' annual financial statements and income statements by the authorized independent audit companies in the banks. The Communiqué has also stated that the independent auditors reports regarding yearend non-consolidated financial statements are required to be reported to BRSA database by April 15th of the following year. 10- The standard rate that must be reached for the equity of companies has been determined. BRSA is authorized by the Law to determine the restrictions and standard rates between corporate actions and equities and to take all kinds of measures for these restrictions for the purpose of finding, analyzing, following, measuring and evaluating of imposed risk. Based on this authority, given by the Law, by the Communiqué, the regulations regarding standard rate within the corporate management regulations have been brought by the Communiqué. As per the Communiqué, it is required that the rate of the company's equity to the total assets should be a minimum of %3 and it should be maintained. The company which cannot reach the standard rate cannot make a new agreement of leasing, factoring and financing until reaching the rate. Nevertheless, BRSA is authorized to increase the standard rate or determine different rates on the basis of company considering asset and financial structure of the company. 5

6 Finance Law Team Umurcan Gago Gündüz Şimşek Gago Attorneys at Law Partner T: +90 (212) Bekir Emre Haykır Gündüz Şimşek Gago Attorneys at Law Attorney T: +90 (212) Pınar Karamahmutoğlu Gündüz Şimşek Gago Attorneys at Law Attorney T: +90 (212)

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