TSPB ANNUAL REPORT 2019

28 TCMA 2019 ANNUAL REPORT INITIATIVES Mutual Funds and Investment Trusts Board Fee Calculation Our Association applied to the Capital Markets Board (CMB) in December 2019 in order to revise the calculation method for the board fees, collected from mutual funds and investment trusts to use the average net asset value instead of the fund’s total net asset on the latest working day value. According to the CMB’s resolution, as of February 2020, the board fee will be accounted for by allocating a daily provision and the difference can be reflected as an additional expense. Our Recommendation on Gold Pricing in Fund Portfolios In order to eliminate the difference among the institutions in setting the price of gold for physical gold, and gold bonds and lease certificates in fund portfolios and to ensure consistency across the industry, our Association filed a request at Istanbul Settlement and Custody Bank Inc. (Takasbank) in December 2019. In response, Takasbank began to apply the standard gold price in its fund valuation reports within the same month. Our Proposal on the New Field of Activity for Asset Management Companies Asset management companies can receive audit, internal control, and research services from investment institutions, while they can receive risk management systems and accounting services from investment firms and other specialized institutions provided that the surveillance and follow-up are carried out by the board of directors. The opinions were conveyed to the Capital Markets Board in December 2019 in order to assign asset management companies with the authority to offer similar services to other asset management companies. Our Recommendation on Reducing the Cash Transactions Operational Cost for the Mutual Funds All cash flow for mutual funds circulates initially via the custody accounts, according to the relevant regulations. However, this process increases the operational costs considering the funds’ numerous cash transfers in-between their accounts. In this context, our Association forwarded its proposal to the Capital Markets Board in December 2019, in order to allow the funds’ cash transfers in-between its accounts in different institutions, without being intermediated by the custody accounts. Taxation in Mutual Funds In order to address the current uncertainties regarding taxation in mutual funds, our Association conveyed its opinions in December 2019 to the Ministry of Finance and Ministry of Finance Revenue Administration in March, asking the “Draft Guideline on the Taxation of Mutual Funds and Investment Trusts” publications to be delivered regularly. Our Proposal on the Improvement within the Public Disclosure Platform (KAP) Concerning the difficulties faced by our members to track the disclosures of corporate bond issuers on the Public Disclosure Platform (KAP) our suggestions were forwarded to the Central Securities Depository of Turkey (MKK) in January. Deadlines of the Financial Statements Disclosure Our Association discloses the sector’s financial statements, which compiles and discloses financial statements of brokerage firms and asset management companies quarterly. This comprehensive dataset enables member institutions to conduct a comparative self- assessment. In this context, taking into consideration the demands of our members to shorten the time for the data publication, our Association requested from the Capital Markets Board to revise the deadline for disclosure of the financial statements at an earlier date, in April 2019. Co-operation with Financial Professional Organizations At various dates during the year, our Association conducted consultations with the Banks Association of Turkey and the Insurance Association of Turkey, regarding the financial sector development and implementation processes. Our Association’s Investment Portfolio In June 2015, the Association’s Board of Directors decided to invest the provisions for severance and notice pays for the Association’s employees in mutual funds traded in the Turkey Electronic Fund Trading Platform (TEFAS) in order to maximize its return with minimum risk and to support the capital markets, with appropriate asset allocation. The investment sum, which started with TL 1.1 million in March 2016, reached TL 2.4 million at the end of 2019. Workshop on Financing the Technological Initiatives In order to develop the capital markets’ role to offer creative financing solutions for the technology ventures, a workshop on “Financing the Technological Initiatives” was held on