Capital Market Board Research Articles

SERMAYE PİYASASI KURULU’NUN İDARİ PARA CEZASI UYGULAMALARININ İLGİLİ MEVZUAT AÇISINDAN İNCELENMESİ

The Capital Market Board (CMB), carry outs audit and surveillance activities in capital markets in order to provide safety and stability of capital markets, protect the rights of investors and fulfill public disclosure. In consequence of audit activity, the CMB, within the scope of power which has been given by the statute law can apply some sanctions, such as administrative fine. The subject of the study is administrative fine applications imposed by the CMB on companies whose shares are processed in the Borsa Istanbul (BIST), between 2006 and 2013. The aim of this study is to determine due to the infringement of which provisions of the statue law which cause administrative fines as a result of te CMB’s audit activity within the scope of power which has been given by the statute law. According to this research's result, CMB mostly executed administrative fines in consequence of statue law related to material disclosure.

SERMAYE PİYASASI KURULU’NUN İDARİ PARA CEZASI UYGULAMALARININ İLGİLİ MEVZUAT AÇISINDAN İNCELENMESİ

The Capital Market Board (CMB), carry outs audit and surveillance activities in capital markets in order to provide safety and stability of capital markets, protect the rights of investors and fulfill public disclosure. In consequence of audit activity, the CMB, within the scope of power which has been given by the statute law can apply some sanctions, such as administrative fine. The subject of the study is administrative fine applications imposed by the CMB on companies whose shares are processed in the Borsa Istanbul (BIST), between 2006 and 2013. The aim of this study is to determine due to the infringement of which provisions of the statue law which cause administrative fines as a result of te CMB’s audit activity within the scope of power which has been given by the statute law. According to this research's result, CMB mostly executed administrative fines in consequence of statue law related to material disclosure.

Comparison of Public and Non-public SMEs’ Corporate Governance Strategies in Turkey

Small and medium sized enterprises (SMEs) are very important for economic development. If proper corporate governance strategies are implemented by SMEs, their growth opportunities are expected to increase. In order to understand the impact of proper corporate governance strategies of SMEs, public and non-public companies are compared. In this study, corporate governance scores for nine public and nine non-public SMEs are calculated. It is found that only three of the public SMEs and none of the non-public SMEs had adequate corporate governance score which is based on Capital Market Board of Turkey's corporate governance principles about stakeholders.

Re-Ranking of Corporate Governance Ratings ofBIST XKURY Companies Based on TOPSIS Method of Ordering

This study aims at re-defining the corporate governance ratings of companies listed in Borsa Istanbul Corporate Governance Index (BIST XKURY). Corporate governance ratings are computed by taking the weighted average of four sub-categories, with the weights subjectively determined by the Capital Market Board. As each company in the index has the overall rating of more than eight, the ratings are only narrowly dispersed within a thin rating band of eight to ten, lacking ability in providing decision makers helpful information in terms of comparative strength of companies. This problem could be addressed by the use of TOPSIS based ranking.Using the ratings of 46 companies for 2013 in the index, TOPSIS method provides a new rank order that has a richer information content. By means of new scores, decision makers could evaluate how far companies closer to the ideal positive and negative solutions.

Relations with stakeholders in Turkey: the sample of ISE‐50 Index

PurposeThe purpose of this paper is twofold: to examine to what extent the companies could adapt the corporate governance principles of the Capital Markets Board (CMB) to their own structures in terms of stakeholder relations; and second, to raise awareness of the deficiencies related to these relations.Design/methodology/approachThe companies listed in ISE‐50 Index in the fourth quarter of 2010 were examined. The corporate governance principles compliance reports, activity reports and articles of associations of the companies that should be issued were examined to obtain the data. The research findings have been studied under five subtitles: company policies relating to stakeholders; promoting the participation of stakeholders in the management; human resources policies; relations with the customers and suppliers; ethical rules and social responsibility.FindingsIt is found that the companies have not taken any action for the representation of the employees in the board of directors. Also, it is seen that most of the companies, when any interest group is privileged, do not make the confidential business information obtained due to such privilege used so as to violate the equal opportunity principle. There are difficulties in paying attention to the confidentiality of the confidential business information related to the customers and suppliers.Practical implicationsThe findings of this study can indicate that, effective handling of applications reflecting the perception related with the stakeholders of the corporate governance could only be probable if CMB corporate governance principles “practice and specify what you do not practice” have become compulsory.Originality/valueThe paper provides useful information on the relationships of the companies listed in the ISE‐50 Index with stakeholders.

Regulation in Stock Market of Turkey

Capital Markets Board of Turkey (CMB) is the regulatory and supervisory authority in charge of the securities markets in Turkey along with ISE which provides the platform for the trading of securities. Empowered by the Capital Markets Law (CML), which was enacted in 1981, the CMB has been making detailed regulations for organizing the markets and developing capital market instruments and institutions in Turkey. Based on the main objectives of fair and orderly functioning of the markets and protecting the rights of investors, the CMB has a wide range of responsibilities. Its first and foremost function is to make innovative regulations, and perform supervision with the aim of ensuring fairness, efficiency and transparency in Turkish capital markets, and improving their international competitiveness. The paper talks about the functions of the ISE and the stock market prevailing in Turkey. It then goes ahead to discuss the CMB and its objectives and finally states the legal framework of capital markets and the way CMB acts as a regulatory framework of the stock market in Turkey.

Investor Reaction to Market Surprises on the Istanbul Stock Exchange

Bu calisma Istanbul Menkul Kiymetler Borsasina surpriz bir bilgi gelisi karsisinda yatirimcinin tepkisini incelemektedir. IMKB100 endeksi icin sonuclar surpriz bilgi gelisi karsisinda yatirimcinin davranisinin Asiri Tepki Hipotezi’ne uygun oldugunu gostermektedir. Bu durum ozellikle negatif etkisi olan bilgi gelisi sonrasi daha belirgindir. Daha likit ve pazar etkinligi fazla olan sirketler grubunu kapsayan IMKB30 endeksi ayni yapiyi gostermemektedir. Calismanin bir sonucu; endeksteki asiri dusmeler sonrasi IMKB100 endeksine yatirim yapmanin anormal getiri saglayabilecegidir. Sonuclar Sermaye Piyasasi Kurulu’nun likiditesi ve toplam piyasa degeri dusuk olan hisselerin alim satimi icin daha fazla bilgi verilmesini zorunlu kilan son degisikliklerini destekler niteliktedir.

Corporate Governance Evaluation: Garanti Bankasi in Turkey as a Case Study

This report has been prepared based upon information available by Garanti Bankasi web site and according to the Corporate Governance Principles by the Turkish Capital Markets Board as amended on 2005. Evaluation includes the following main elements: (1) Shareholders rights: Under this heading the following sub-elements can be scored positively: facilitating the exercise of shareholders’ statutory rights, shareholders right to obtain and evaluate information, the right to participate in the general shareholders’ meeting, voting rights, dividend rights and transfer of shares. While there is lack of minority rights and lack equal treatment of shareholders can be scored negatively. (2) Disclosure and Transparency: Public announcements are made via all communications channels and are in accordance with the CMB and ISE’s rules and regulations. Under this heading the following sub-elements can be scored positively: principles and means for public disclosure, periodical financial statement and reports in public disclosure, functions of external audit, significant events and developments that must be disclosed to the public, and the concept of trade secret and insider trading. But the bank does not make any public disclosures about individuals who are ultimate controlling shares after eliminating the indirect-shareholding and cross-shareholding relations is not included in the footnotes of the financial statements and in the annual report. And lastly, public disclosure of relations between the bank and its shareholders, the board of directors and bank executives can be scored negatively. (3) Stakeholders: On the topic of Stakeholders heading the following sub-elements can be scored positively: protection of bank assets, bank policy on human resources, relations with customers, ethical rules and social responsibility. Unfortunately, Garanti bank hasn't declared a policy document regarding stakeholders. The Bank, taking into consideration all stakeholders, aims to improve product and service quality and to achieve internal and external customer satisfaction. Stakeholders are all the parts which have a positive or negative effect on the bank, and limited to the customers. The participation in management is limited through Customer Care Line. (4) Board of directors: From the perspective of the Principles regarding the Board of Directors heading the following e sub-elements can be scored positively: Vision, mission and strategic goals of the company are clearly defined. The Garanti board is effective and highly qualified members; Remuneration of the board of directors is just attendance fees. Audit Committee, The Credit Committee, Assets and Liabilities Committee, Liquidity Risk Management Committee (LRMC), and Sub-committees for market risk, credit risk and operational risk are established. Chief Executives Officer and board chairman positions are separately chaired. The Bank Directors & key management officers are fit to their positions. But board majority are executive and the board doesn't have any independent members at all. Garanti Board responsibilities and duties are just a part of what is mentioned in CMB principles. The board meetings and achievement are not evaluated. The Executive Management Committee and The Corporate Governance and Social Responsibility Committee are two basic committees which are not established yet.

Growing tendency to harmonisation with IFRS: some evidences from Turkey

Motivated by the recent developments in accounting regulations, we explore the tendency of countries to converge to IFRS for both public and private companies and present some evidence on the issue from an emerging market. We explore how the legal system – civil vs. common law – and the stock market development stage in a country affects the acceptance of IFRS by the regulators. We find that stock market influences the acceptance of IFRS for both public and private companies while the legal system affects the requirement of IFRS for the private companies. In Turkey, different regulatory bodies control different types of companies. Capital Markets Board that controls the listed companies issued the first set of translated IFRS in 2003. Established in 2002, Turkish Accounting Standards Board (TASB) is responsible to translate and issue the international accounting standards. Examination of issue and effective dates of both standards reveals that TASB closely follows the IASB efforts.

Growing tendency to harmonisation with IFRS: some evidences from Turkey

Motivated by the recent developments in accounting regulations, we explore the tendency of countries to converge to IFRS for both public and private companies and present some evidence on the issue from an emerging market. We explore how the legal system – civil vs. common law – and the stock market development stage in a country affects the acceptance of IFRS by the regulators. We find that stock market influences the acceptance of IFRS for both public and private companies while the legal system affects the requirement of IFRS for the private companies. In Turkey, different regulatory bodies control different types of companies. Capital Markets Board that controls the listed companies issued the first set of translated IFRS in 2003. Established in 2002, Turkish Accounting Standards Board (TASB) is responsible to translate and issue the international accounting standards. Examination of issue and effective dates of both standards reveals that TASB closely follows the IASB efforts.

The development of inflation accounting in Turkey

Turkey, as a developing country, suffered from high inflation rates for many years. However inflation accounting was not applied till the year 2003 because of some political reasons. The high rates of inflation heavily distorted the financial statements of the companies in Turkey. The companies tried to benefit from the incentives in the Turkish Tax Regulation negating the effect of inflation till the year 2003. At the beginning of 2004 inflation accounting was applied at last. The purpose of this study is to emphasize the effects of inflation on the companies in Turkey and what they did in order to protect from the distortions of inflation till the year 2003. Also the regulations of the Ministry of Finance and Capital Market Board considering inflation adjustment were examined and compared by illustrations.

Standardization of Company Law in Germany, other EU Member States and Turkey by Corporate Governance Rules

Corporate Governance rules are now contained in a multitude of Corporate Governance Codes worldwide. There are still different approaches concerning the implementation and enforcement of Corporate Governance codes in Europe. Besides the Corporate Governance Codes of Germany and other EU Member States, particularly the Combined Code in the UK, another very interesting Corporate Governance Code is found in Turkey's “Corporate Governance Principles” of 2003, amended in 2005. The “Principles” were established by the Capital Markets Board of Turkey. The Turkish “Principles” may become even more important in the near future, when the new Turkish Commercial Code will come into force. The article concludes with a discussion on how far a harmonization of Corporate Governance rules in Europe and worldwide should go, particular in view of the “path dependence” of Corporate Governance rules, for example concerning the diversity of board structures and remuneration models. It turns out that no single Corporate Governance model fits every country.

Corporate Governance in Turkey

The Turkish Capital Market Board introduced its Corporate Governance Principles in 2003. The Principles are based on the concepts of equality, transparency, accountability and responsibility. While they are generally modelled on the Corporate Governance Principles of the OECD, they also take into consideration the special needs of Turkish company structures and Turkish company law and practice. The Principles apply on a comply-or-explain basis and contain detailed guidelines on the rights of shareholders, public disclosure and transparency, stakeholders and the board of directors. Listed companies are under an obligation to issue an annual corporate governance compliance report showing the extent of their compliance with the Principles and explaining the reasons for any deviation. The board of directors and the company can be held liable by investors for deceiving them with wrong or misleading information contained in the report. As for the actual implementation of the Principles, surveys indicate that there is room for improvement and that more time is needed for full application.

Transparency & Disclosure in the Istanbul Stock Exchange: Did IFRS Adoption and Corporate Governance Principles Make a Difference?

The purpose of this study is to investigate if the transparency and disclosure level of a sample of Istanbul Stock Exchange firms is enhanced by the promulgation of a set of local Corporate Governance (CG) Principles and by the voluntary adoption of the International Financial Reporting Standards (IFRS), an international best-practice. The Capital Market Board's CG principles are promulgated on a comply or explain basis and have been effective since the fiscal year 2004. First, the year 2003 Transparency & Disclosure (TD) index previously created in collaboration with Standard and Poor's is replicated for the fiscal year 2004. Using this short panel data of transparency and disclosure scores for our sample of 52 large and liquid Istanbul Stock Exchange firms, the improvement in the scores over the two years is measured. Second, with appropriate control variables in the model, we analyze the determinants of the significant improvement. We use the voluntary adoption of IFRS as an indicator of and commitment to TD, and find that the scores and their relationship with performance are higher in early adaptors. We then create a parsimonious 3-attribute Commitment-to-Better-Disclosure Index and observe a high correlation between the two indices. Finally, using a matched pairs design and controlling for IFRS adoption, we are able to attribute the improvement in the TD scores to the CG principles. The study should be of interest to researchers, managers, analysts, boards, policy makers and regulators at a time when debate on convergence to IFRS and the impact of local CG guidelines has become intense.

The Impact of Non-Audit Services on Institutional Investors' Perception of Auditor Independence: Evidence from Turkey

In recent years, audit profession was confronted with different regulations, revised rules on non-audit services (NAS) and on auditor independence. In depth, professional accountancy bodies amended their independence rules according to Sarbanes-Oxley Act of 2002. For instance, the Securities Exchange Commission (SEC) and the American Institute of Certified Public Accountants (AICPA) in the USA, Capital Market Board (SPK) in Turkey made amendments to their independence rules on non-audit services and on auditor independence in light of the Sarbanes-Oxley Act of 2002. The purpose of this paper is to examine whether non-audit services jeopardize institutional investors’ perception of auditor independence in Turkey. Therefore, questionnaire was administered to 34 institutional investors in Istanbul, Turkey. It was generally found that institutional investors’ perception of auditor independence is not impaired at the time of joint provision of NAS and audit services to an audit client.

İŞLETMELERDE DEĞERİNDEN KAYBETMİŞ STOKLARIN DEĞERLEMESİ, DEĞER DÜZELTİM TUTARININ HESAPLANMASI VE TEKDÜZEN HESAP PLANINA GÖRE MUHASEBE KAYITLARI

The purpose of this paper is to examine the valuation and value adjustments of substandard inventories according to Turkish Tax Procedures Law, Turkish Trade Code, Turkish Capital Market Board Regulations and International Accounting Standards. Additionally we mil examine how to book the value adjustments according to Turkish Uniform Accounting System.

YATIRIM DANIŞMANLIĞI VE PORTFÖY YÖNETİCİLİĞİ

Capital Market Board of Turkey has determined by communique, dated 20.04.1995, investment consultancy and portfolio management According to the communique and investors expectation, performer institutions has to be well-organized, meet the investors expectations requirement. They have to avoid defective advisory result. This paper is dealing with the regulation, operation and responsibilities of financial intermediaries.