Since its establishment, the Capital Markets Board (SPK) of Turkey has been dedicated to its role of regulating and supervising the Turkish capital markets in accordance with international norms and standards in a continuously changing market environment with clear, objective and easily apprehensible approaches in order to ensure that capital markets are fair, secure, transparent and efficient.
The board continued in 2010 to carry out its regulatory and supervisory activities in line with its above-mentioned mission and vision. (full story - sundays zaman)
After one of the biggest financial crisis in world history, while the recovery in the global economy continued in 2010, Turkey, with a growth rate of nearly 9 percent last year, has succeeded in attracting the world’s attention as the fastest growing country among Organization for Economic and Cooperation Development (OECD) countries. While the problematic economic and financial structures of the member-states of the European Union were a matter of concern, a positive performance in the last period and a reduced budget deficit and debt stock made our country one of the shining stars of the world. The improvement in the economy has led credit rating agencies to upgrade Turkey’s credit rating, thought it still remains lower than it should be, and it has increased confidence in the future of our economy in the national and international arena.
This success, no doubt, is due to the restructuring of the management and audit system along with the experience we gained and lessons we learned from the past crisis. The reform process our financial system went through over the last decade, serves as a role model for other countries, primarily the US and member-states of the European Union that have been seeking solutions to their problems.
Concerning Turkish capital markets, the year 2010, along with positive developments in the Turkish economy, was significant for reviving public offerings due to the promotional activities and seminars conducted within the scope of a public offering campaign. As a result of the work performed in order to ease and accelerate public offering procedures by the board, leading Turkish companies and small and medium-size enterprises (SMEs) were encouraged to go public. When compared to the past, a rapid increase in the volume of public offerings took place. In 2010, 22 companies offered their shares to the public. Besides the new public offerings, great importance was also attached to the development of the corporate bond market; hence, more than 30 corporate bonds were sold to investors as a result of the activities carried out by the board.
In 2010, the intermediary firms’ warrants, aimed at protecting stock market investments from excessive price fluctuations, and the lease certificate as an alternative instrument for the emerging markets were introduced as new capital market instruments.
On the other hand, in the light of all these developments, the regulations enacted for enabling the trading of foreign capital market instruments in Turkish capital markets seem to have had positive effects. This directly resulted in accelerating the integration of Turkish capital markets into global markets, increasing the variety of instruments in Turkish capital markets as well as contributing to the creation of market depth.
Besides regulation to increase product range, the scope of activities of venture capital investment trusts was extended, and necessary regulations were enacted to accelerate the public offering process of real estate investment trusts. The instruments in which pension investment funds and investment funds may invest were also diversified. Furthermore, regulations were made to enhance competition in the mutual funds sector and the establishment process of the Appraisal Experts Union was completed.
Meanwhile, in 2010, the board started to use the electronic signature system in the capital adequacy system for monitoring the financial status of intermediary firms The aim of using this system is to decrease the costs of intermediary firms and to increase the efficiency of monitoring activities as well as to decrease bureaucratic correspondence.
Parallel to our country’s increasing prestige abroad, there have also been significant developments in activities in the international arena. Through the Emerging Markets Committee (EMC), of which the SPK has been holding the chairman position since June 2010, an active role has been undertaken in the restructuring activities of the International Organization of Securities Commission (IOSCO).
Furthermore, the SPK became eligible to participate on behalf of the IOSCO in the meetings of Financial Stability Board (FSB), which contributes to studies of the G20. The reports prepared under the leadership of or contributed by the board are considered reference documents for the creation of new financial architecture and determination of standards in different international platforms.
In addition the board was accepted as a member of the International Forum of Independent Audit Regulators (IFIAR) and the Islamic Financial Services Board in 2010. In order to assume a more active role within the Standing Committee for Economic and Commercial Cooperation (COMCEC) of the Organization of the Islamic Conference (OIC), necessary actions were taken to establish a forum among capital market authorities in order to carry out studies under the leadership of the board. In that regard, it has been decided that a conference be organized by the board in the second half of 2011.
In addition to all these developments, cooperation agreements were signed with the institutions responsible for capital market regulation and supervision in Malaysia, Azerbaijan and the United Arab Emirates. In order to promote our capital markets and to explore cooperation opportunities with our counterparts, a Turkish delegation including representatives from the İstanbul Stock Exchange (IMKB), Takasbank, Turkdex and the Central Registry Agency (MKK) paid an official visit to Malaysia. Also, seminars and promotional meetings on Turkish capital markets were held by the board in South Korea with the participation of South Korean capital market intermediary institutions and fund managers.
In an economic conjuncture where Turkey is expected to become one of the top 10 largest economies in the world by 2023, the international efficiency of financial authorities and other related institutions in Turkey is expected to increase accordingly. Within this process, it is inevitable for our banks and intermediary institutions to have a regional efficiency in conformity with increased interest. As the EMC chair, we aim to establish much closer cooperation with countries in the region and emerging markets. Thus, we also plan to not only be a pioneer in the implementation of standards adopted by the international agencies to which the board has been party and an active participant, but also to have a leading role in that regard for other countries. Within this framework, our target is to develop common projects, especially with the OECD, and carry out preparatory work for the signing of mutual collaboration agreements.
In 2011, in the second phase of the Public Offering Campaign, a series of new activities have been planned in order to inform existing and potential investors about capital markets and instruments. In the coming period, we will continue to inform a wide variety of people from school-aged children to the elderly on capital markets and investments through the implementation of various projects. These activities will contribute to the establishment of the National Strategy, which is aimed at promoting investor education and improving financial literacy nationwide. Moreover, in order to attract the savings of individuals and entities to capital markets and to increase interest in capital markets, we aim to monitor the needs and qualifications of a variety of target groups to provide information through adequate channels of communication and to carry out studies in order to take the necessary precautionary measures As in the activities carried out last year, we aim to improve and deepen our capital markets through actions planned to be carried out in the next period. In particular the creation of a legal infrastructure to better protect investors’ rights and enhance market trust will attract investors to capital markets. Within this scope, we consider the İstanbul Financial Center Strategy and the action plan announced by the government an important starting point. It is extremely important to fulfill the actions within this plan as quickly as possible and to make İstanbul the center of attraction among capital markets. From this point of view, the process ahead of us provides Turkey with a unique opportunity to establish a global international finance center with ongoing fast development in its capital markets. Using this opportunity efficiently and correctly will be achieved by our board staff and all other participants in the capital markets sector as a whole. *Akgiray is the chairman of the SPK.
