TSPB ANNUAL REPORT 2019

27 TCMA 2019 ANNUAL REPORT Our Recommendations Regarding the Mutual Funds’ Portfolio Constraints Capital Markets Board’s (CMB) Communique on Mutual Funds grants certain exemptions to issues by the Central Bank of the Republic of Turkey and the Undersecretariat of Treasury be also granted to the Turkish Sovereign Wealth Fund. Our Association relayed opinions to CMB in February, in order to extend those exemptions to the issues by the Turkey Sovereign Wealth Fund. As it is known, it is possible for the founder and / or manager of mutual funds to include the fund shares in its portfolio, up to an upper limit of 20% of the fund’s shares. Founders can provide an advance for fund expenses during the fund establishment and this advance is not included in the calculation of the above-mentioned ratio for 1 year. However, in some cases, the fund-selling process may take more than 1 year after the establishment of the fund. In this context, our Association applied to the CMB in February 2019 to request that the period be ruled out until the sale of shares be calculated in the calculation of this rate. Our Recommendations on the Development of Venture Capital Funds Regarding the challenges faced by the asset management firms that manage venture capital mutual funds under the scope of the “Tech-InvesTR Venture Capital Support Program”, our recommendations were forwarded to the Republic of Turkey Ministry of Treasury and Finance in March. Our Suggestions on the Development of Real Estate Mutual Funds Our Association applied to the Capital Markets Board in March, based on our members’ demands, in order to set the upper limit for the expense ratio to be calculated annually, starting from the fund issuance for real estate mutual funds. Simultaneously, an attempt was made before the Ministry of Internal Affairs, General Directorate of Civil Registration and Citizenship Affairs, to change the minimum real estate or venture capital mutual fund participation share amount required for the acquisition of Turkish citizenship to 250,000 US dollars or equivalent foreign currency or equivalent Turkish lira, similar to direct real-estate investments. Our Recommendations on Trading Hedge Funds at TEFAS A set of recommendations were transmitted to Capital Markets Board (CMB), in November 2019, in order to solve potential problems that might arise regarding the performance fees, public disclosure, foreign currency transfers when the hedge funds start being traded under the Turkey Electronic Fund Trading Platform (TEFAS). In view of our suggestions, the CMB made a new regulation in December 2019. On the other hand, additional time was requested for the construction of the necessary infrastructure for these funds to be traded over the Internet via TEFAS. In line with our recommendations in February 2020, the CMB stated that the investors can engage in hedge fund transactions via the distribution channels (namely banks), conditional to the distribution channel discretion. Our Suggestion to Enable Fund Shares Transfer Our Association applied to the Capital Markets Board (CMB) in December 2019 to enable the transfer of mutual fund shares traded at TEFAS of a single investor between her own accounts in different institutions as well as between the accounts of different investors in the same and/or different institutions. Money Market Funds Expense Ratio After the regulatory change, which lowered the maximum fund expenditure rates by half in March 2019, our Association applied to the Capital Markets Board in June 2019, asking to reinstate the previous rates. Our Proposal for Fund Performance Criteria Change Our Association applied to the Capital Markets Board in February 2019 in order to use the BIST-KYD 1-Month Deposit Index instead of TR-LIBOR as a benchmark for collective portfolio investments.