TCMA ANNUAL REPORT 2018

Initiatives employing new technology in the provision of financial services and evaluating their impact on the existing financial system. “FinTech Search Conference” was organized in Ankara on 17 December 2018 within the scope of the activities of the Financial Technology Permanent Sub-working Group established under the leadership of the T.R. Ministry of Treasury and Finance, Banking Regulation and Supervision Agency (BRSA), Central Bank of the Republic of Turkey (CBRT), and the Capital Markets Board of Turkey (CMB). During the conference, the Association and our members presented the sector’s opinions and suggestions at the “Capital Market Institutions and Associations Agencies” working group. Activities for Developing the Capital Market The Association’s opinions and suggestions were requested for nationwide collection of securities financing transaction data and converting them into a reportable format to be submitted to the Financial Stability Board (FSB). Based on the belief that the sector needs a central risk control system that will ensure risk management in credit and short selling transactions, a Capital Market Risk Control System Project Presentation that the Association had considered in previous years was presented for the information and assessment of the Capital Markets Board of Turkey in March. Suggestions for Increasing Private Sector Lease Certificate Issuances Based on Istanbul Financial Center Priority Transformation Program and Action Plan, Component 7, Policy heading no. 4, article 7 that reads “Action will be taken to increase private sector lease certificate issuances”, the Association’s opinions and suggestions regarding the work carried out by the Capital Markets Board of Turkey were conveyed. Turkish Exporters’ Assembly Questionnaire The Turkish Exporters’ Assembly (TEA) is carrying out the “Top 500 Service Exporters of Turkey” survey to drive the development of the Turkish service industry and reveal its potential. Under the study coordinated by the T.R. Ministry of Economy as it was called at the time, a questionnaire was administered among our members and the outcomes were conveyed to TEA. Directive about Provisions to be Set Aside by Mutual Funds Published Directive about Provisions to be Set Aside by Mutual Funds was published on 31 July 2018 by the Association. Taking into consideration the problems encountered in practice, the said directive was updated and publicly disclosed on 7 December 2018. Robo Advisory A letter was presented to the Capital Markets Board of Turkey on 17 September 2018 for the regulation of robotic investment advisory applications. Side Pocket in Mutual Funds In relation to mutual funds, work was initiated to launch the side pocket practice available abroad for safeguarding the rights and interests of investors due to borrowing instruments whose issuers default. The sector’s opinions about the subject were conveyed to the Capital Markets Board of Turkey on 26 October 2018 and 31 December 2018. Gold Funds A letter was presented to the Capital Markets Board of Turkey on 16 November 2018 for updating TEFAS (Turkey Electronic Fund Trading) Platform infrastructure to enable trading of gold funds on TEFAS in terms of gold. Benchmark Value in Participation Funds A request was filed on 25 December 2018 for setting the official minimum benchmark in asset management for portfolios managed on participation-basis as BIST-KYD (Turkish Institutional Investment Managers’ Association) 1-Month Indicative Profit Share Index in lieu of TR-LIBOR. Net Inflows/Outflows in Mutual Funds The Association cooperated with the Central Registry Agency (MKK) throughout the year for the publication of net capital inflow/outflow data in relation to mutual funds. The 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 the mutual funds traded on the Turkey Electronic Fund Trading (TEFAS) Platform, for the dual purpose of securing maximum returns with minimum risk through proper distribution of assets, and of supporting the capital markets. The preparatory work for the portfolio, and an assessment of its one-year performance were published in the Summer 2018 edition of the Association’s quarterly journal, Gosterge. The initial investment amount of TL 1.1 million in March 2016 rose to TL 1.6 million at the end of 2017 and to TL 1.7 million in December 2018. The investment portfolio consisted of a total of 25 securities mutual funds, and generated an after-tax profit of TL 614,529 in total over the course of approximately 3 years. 28 TCMA 2018 ANNUAL REPORT