TCMA ANNUAL REPORT 2018

and individual transactions associated with subordinate services to be offered to customers in accordance with the procedures and principles set out separately in Communiqués (including the electronic environment) and any and all other regulatory obligations must be fulfilled; · At the time of the signing of the “Capital Market General Framework Agreement”, the obligations under Article 25 of the Communiqué on Investment Firms regarding the communication of risks to the customers must be satisfied; · Investment firms must make available the sample framework agreements covering the detailed provisions that will form the basis of investment services and activities and individual transactions associated with subordinate services to be offered to the customers in a manner allowing access thereto from the home pages of their websites. Reconciliation Regarding Custody Accounts with Customers “Article 68 - Reconciliation between Customer and Custodian” of the Capital Markets Board of Turkey (CMB) Communiqué on Investment Services, Activities and Ancillary Services (Investment Services Communiqué) sets out the obligation to make a reconciliation between the customers receiving custody services and the authorized custodian about the customer’s capital market instruments and cash in writing or via electronic media at least once every calendar year. The problems experienced by our members and their hesitations associated with this obligation were described and our suggestions in relation to the obligatory reconciliation were submitted to the CMB. Feedbacks and Suggestions Regarding the Implementation Principles of the Derivatives Market (VIOP) An “Expanded Intermediary Institutions Professional Committee” was held on 13 August 2018 at the Association with the representative of the Association member intermediary institutions to discuss the effects of the extraordinary changes in currency rates upon national capital markets and to restrain the possible domain of the risks arising in the markets. While the meeting mostly focused on the impact of the highly volatile exchange rates upon the transactions carried out on the Derivatives Market (VIOP) operated under Borsa Istanbul and the risks borne by the system, the feedbacks and suggestions about the related market practice and principles that came to the fore in the meeting were conveyed to the Capital Markets Board of Turkey and Borsa Istanbul. Within the frame of the Association’s feedbacks and suggestions, Borsa Istanbul and Istanbul Clearing, Settlement and Custody Bank Inc. (Takasbank) took the necessary actions and updated the collaterals so as to decrease leverage ratios, thus mitigating the potential risk exposure of intermediary institutions and investors. Real Estate Appraisal Minimum Fee Tariff Our members’ feedback and suggestions regarding the “Real Estate Appraisal Minimum Fee Tariff” prepared by the Capital Markets Board of Turkey (CMB) for implementation in 2019 and “Real Estate Appraisal Minimum Implementation Principles” were communicated to the CMB. 2019 minimum fee tariff was determined within the frame of the Association’s feedback and suggestions. National Electronic Notification System Pursuant to the Electronic Notification Regulation published in the Official Gazette dated 6 December 2018, notifications to all public institutions and agencies and private legal persons must be made electronically from 1 January 2019. Under the said obligation, the notifications among the Association members and public institutions and other real and legal persons must be submitted via the national electronic notification system (UETS). Within the frame of the Electronic Notification Regulation, all information and documents demanded by the PTT Inc. (Turkish Post) to create electronic notification addresses for the Association members were provided to PTT via our Association and thus, facilitated the creation of electronic notification addresses. Suggestions for Developing the Corporate Bonds Market It was observed that in the recent past, certain issuer companies defaulted with their interest and principal amount liabilities, failed to satisfy their public disclosure obligations, and liquidity was limited in the secondary markets. In this context, a task force was set up to identify the problems related to corporate bond issuances and secondary markets, and to devise solution suggestions. The Task Force compiled suggestions to foster the healthy development of the corporate bond market including the issuance process, public disclosure rules, and measures to promote the liquidity and monitor issuer risk, which were submitted to the Capital Markets Board of Turkey (CMB). Furthermore, meetings were held with the CMB, Ministry of Justice, and the Justice Commission of the Turkish Parliament to discuss the problems faced in judicial and enforcement processes in case of default associated with corporate bonds. 25 TCMA 2018 ANNUAL REPORT