I. THE ISTANBUL FINANCIAL CENTER PROJECT (IFC) AND MKK
MKK contributes significantly in various task committees established within the framework of the Istanbul Financial Center Project (IFC) Strategy Paper which came into effect in 2009 and the Action Plan in order to implement international standards and industrial best practices in the Turkish post-trade infrastructure. MKK continues to work as the solely responsible institution in Action No. 49 “Exercise of Dematerialized Shareholder Rights in Electronic Environment” and jointly responsible institution with Takasbank in Action No. 48 “Establishing the Turkish Electronic Fund Trading Platform”. MKK is also a cooperating institution in 22 separate tasks set forth in the Strategy Paper:
- Action No 15: Reviewing legislation regarding transactions in collaterals and establishing Central Collateralization and Central Counterparty (CCP) system.
- Action No 16: Classification of financial services within the framework of the European Community acquis and enabling the provision of service packages capable of responding to customer demands by allowing flexibility to financial intermediary institutions.
- Action No 17: Developing integration with international payment and exchange systems.
- Action No 18: Facilitating easy exit from the CMB records and the Exchange list.
- Action No 19: Enabling foreign securities to be traded in domestic markets.
- Action No 20: Improving the Turkish GDS market.
- Action No 21: Extending the use of English in order to ensure that foreign investors are properly informed.
- Action No 22: Informing investors on capital markets, capital market institutions, capital market instruments, systems aimed at protecting investors, risks and similar subjects.
- Action No 24: Improving securities lending mechanisms.
- Action No 25: Rendering PSDIs fully functional.
- Action No 26: Developing local government debt instruments.
- Action No 27: Developing commercial papers.
- Action No 28: Developing derivative products.
- Action No 29: Developing an infrastructure for Islamic debt instruments.
- Action No 30: Rendering the securitization and housing finance market fully-functional.
- Action No 34: Establishing commodities exchanges and integrating financial markets and commodities markets.
- Action No 38: Reducing transaction costs to competitive levels.
- Action No 39: Increasing liquidity in markets for some securities and developing new financial instruments and activities.
- Action No 42: Encouraging companies in making public offerings or in increasing free float rates.
- Action No 47: Establishing a common technology platform.
- Action No 58: Promoting university-industry cooperation.
- Action No 70: Launching an internet portal to provide information on financial products, services, the market and its practices and tax regulations.
Besides managing ongoing projects and introducing new services as the central securities depository, MKK is also responsible from the following projects that will support development of our capital market and economy and putting them into service gradually:
e-GOVERNANCE: Corporate Governance and Investor Relations Portal
The e-GOVERNANCE Portal, which is developed by a central securities depository as a communication bridge between companies and shareholders for the first time in the world, is also a Mobile Corporate Governance application that enables standard and uninterrupted information exchange between shareholders and issuer companies through the use of the internet, e-mail, SMS and mobile communication applications. . Through the portal, companies will be able to reach their shareholders directly and investors will have easy access to information on companies in an outright manner. Companies will be able to distribute surveys to their current or potential shareholders and maintain information exchange via internet, e-mail and SMS. It will also be possible to hold online investor meetings, electronic board meetings and general assembly meetings, and conduct electronic voting and proxy voting over the e-Governance platform. As a result of these , MKK became an Information Center for Investors.
The first phase of the e-Governance project including Corporate Messages, Corporate Information, Securities Information, Notification Management, Investor Statistics and Advanced Survey applications, has been put into service as of July 2011 end. Other applications such as Shareholder Promotions, Blogs, Electronic Proxy Delegation and Voting, Electronic General Assembly Meetings and Investor Meetings will be put into service in the later phases.
e-GOVERNANCE Portal has received support as a”TUBITAK R&D Project that would establish new methods” because of its benefits “generation of a new product, reduction in costs and promotion of standards” in “Industry Research Technology Development and Innovation Projects” scheme of TUBITAK.
e-GEM: Electronic General Meeting
General assembly meetings of companies, of which shares are in custody at MKK, will be able to be conducted on the electronic platform that is developed by MKK. By using this system companies will be able to inform their shareholders through the MKK portal and/or MKK’s other communication platforms and conduct live general assembly meetings on the portal. Investors will have remote access to general assembly meetings through the MKK portal as well as mobile applications and exercise their managerial rights on the electronic platform by using their electronic signatures. e-GEM, which is a pioneer in terms of its scope among all other CSDs in the world, will play an important role in the development process of corporate governance and investor relations in our country. e-GOVERNANCE and e-GEM will create significant externalities in attracting foreign investment to our markets by raising the level of corporate governance practices.The project, will go live for the listed companies as of 1 October 2012, is not only expected to help publicly traded companies harmonize their practices with the OECD Corporate Governance Principles but also quoted as a component of the IFC Project (Action No. 49).
TUBITAK has selected e-GEM Project as one of the projects to be supported as a TUBITAK R&D Project between 01.08.2011 - 31.07.2013 with regards to its benefits; generation of a new product, reduction in costs and promotion of standards.
e-CAS: Investor Notification and Alert System
MKK enhances its Investor Information Services by adding new services every year. One of the most crucial elements in corporate governance and investor protection is to inform investors in accurate, timely, complete and instant manner. The e-CAS (Electronic Customer Alert System) which was developed by a CSD for the first time in the world to prevent unacknowledged transfers of shares out of investor accounts, first phase (Notification phase) is already completed The system aims to minimize possible errors or abuses on the stock certificates kept in investor accounts and provide continuous notification to investors about their assets. It is a pioneering example in the use of technology for investor protection. In October 2011, with the launch ofPrevention Phase, stock outflow transactions from investors’ accounts, especially pledge and collateral transactions, have been made conditional on MKK’s notification to investors. With respect to a Capital Markets Board decree, it is planned that the scope of the Prevention Phase will cover not only pledge/collateral transactions but any stock transactions which cause stock outflows from the accounts of domestic real person investors.
e-WAREHOUSE RECEIPT: Electronic Warehouse Receipt Center
The e-WAREHOUSE RECEIPT Project aims to dematerialize physical warehouse receipts on commodities within the electronic platform that will be developed by MKK. Securities that will be traded on Commodities Exchanges with underlying electronic warehouse receipts will be held in MKK’s electronic platform and all transactions in e-warehouse receipts will be performed on this platform with respect to MKK’s vast experience and know-how in this area. The system will enable immediate notification of on electronic warehouse receipts that are created in their accounts as they deliver their products to licensed warehouses. Producers will also be able to trade their products and easily transfer them or use them as collaterals. The project will foster the development of derivatives markets on commodities and integrate the agricultural industry and capital markets. In this context, the software and tests have been finalized in April 2011 for the issuance of electronic warehouse receipts and their treatment in legal transactions. The service will go live following the regulations of the Ministry of Customs and Commerce. Authorization of MKK as the “Electronic Registry Agency” to hold e-warehouse receipts, became possible with the “e-Warehouse Receipt Regulation” provisions framework which has been enacted by the Ministry of Customs and Commerce and published on the Official Gazette No. 28110 on 12 November 2011.
e-DATA: Capital Markets Data Bank
Capital Markets Data Bank Project aims to gather, analyze, model and present all data concerning our financial markets, particularly detailed data on investors and securities kept in the Central Dematerialization System (CDS) and in e-MKK Information Portal from a single source to make such data available to regulatory and supervisory bodies and other governmental institutions to be used in decision-making mechanisms as well as to rating agencies in their analyses of the Turkish capital market and to academic environment. Another aspect of this project will be the distribution of all data produced in the Turkish capital markets through MKK in a secure, consistent and correct manner. Besides its secondary goal of establishment and presentation of an electronic securities database for the securities issued in Turkish capital markets compliant with the international standards, the project’s end goal is to become the single data source for all capital markets as well as to provide services in analysis of data, creation of econometric models and distribution of financial information in international standards. Moreover, establishment of indices such as Investor Risk Appetite Index, development of financial indicators and distribution of these data through the portal, and publication of all studies as articles in national and international journals are also within the project’s scope. It is foreseen that e-DATA project will provide significant contributions in informational efficiency of financial markets. We collaborate with Özyeğin University in this project.
e-COMPANY: Companies Information Portal
According to the Article No. 1524 of the new Turkish Commercial Law which has been effective by July 2012 joint stock companies are required to open web sites and disclose stated information and documents on those web sites.
The company information portal that has been developed based on the legally required information and documents to be disclosed by hundreds of thousands of companies integrates with company web sites. MKK develops the project to enable companies to publish information and documents initially on the e-Company portal, to integrate those information and documents with company web sites, to provide required security levels, to enable access from a single source and consistency, and to establish data transmission to the Central Registry Number System (MERSIS) infrastructure. In this way, all documents that companies are required to publish on their web sites are gathered in a single center and presentation of data and information on all companies in Turkey on specific criteria is provided in a safe manner.
The portal has been in effect since October 2013 with the completion of software development stage following the regulations of the Ministry of Customs and Commerce.
Dematerialization of the Turkish Government Debt Securities
Currently, the Turkish Government Debt Securities are held at the Central Bank of the Republic of Turkey on a financial institution basis. By the help of the enhancements made on the Central Dematerialized System, the system infrastructure is now capable of allowing the Turkish Government Debt Securities registered at investor basis. The project was put into service as of 30 June 2012 with the decision of the Capital Markets Board of Turkey.
MKK Introduces “SWIFT”
MKK has been assigned to participate in various “Action Groups” in restructuring of the Turkish Capital Markets and hence becoming not only a regional but also international finance center under the framework of Istanbul Finance Center Project. In this regard MKK has become a member of the Society for Worldwide Interbank Financial Telecommunication (SWIFT) to establish integration and information flow with the international payment systems. The project schedule formed on the SWIFT developments reflecting our participants’ feebacks and MKK’s evaluations, will be accomplished only in cooperation of our participants and shareholders.
STP in Corporate Actions
The Public Disclosure Platform (PDP) of the ISE, being the primary source of information of the Turkish capital markets, is responsible from the collection and distribution of publicly disclosed announcements to market participants. With the PDP integration, MKK has made a development on the conversion of the corporate actions (regarding both managerial and financial rights) announcements of issuer companies to SWIFT formats and distribution of these messages to market participants. In the first phase of this project, distribution of information on cash dividends, stock dividend capital increases anddecreases and general assembly meetings will be sent via SWIFT to our requesting participants and hence they can forward these information to thier own clients.
With the “Corporate Actions Information Distribution Process Automation” project, MKK accomplished compliance with the International Securities Services Association (ISSA) standarts in Global Corporate Actions Principles and hence a major step has been taken on the end to end automation of corporate actions processes between the issuer and the investor.
Furthermore, system developments for the elimination of the need to input corporate actions announcements into the CDS by issuer companies as opposed to auto-creation of the PDP announcements in the CDS are planned to be completed as of Q2 2013.
Automated FoP Tranfers
With the “Securities Transfers” module through which share transfer operations are conducted in the CDS; securities transfer operations are finalized with the receiving party’s confirmation of the transfer instruction of the sender. In addition to this, apart from the current securities transfer process, the “Securities Transfers Matching Operations” module has been developed. The module allows delivery of separate instructions sent either by the receiver or the sender matching of instructions in the CDS, and hence settlment of the transaction. Transactions can be settled through the CDS and CSV file transfer, and also via SWIFT. The module was designed to enable matching of instructions sent through SWIFT with other instruction sent through either SWIFT or CDS. In this module, it is not mandatory to send all messages via SWIFT, as the instructions sent through the CDS can also match with the instructions sent via SWIFT.
The “Securities Transfers Matching” module provided compliance with the European Central Securities Depositories Association (ECSDA) matching standards in “securities transfers operations” has been achieved and starting from the investor, end to end automation of securities transfer operations has been accomplished.
|No||Name of the Process||SWIFT Type||Target Date|
Securities Transactions - Free of Payment (Internal)
Securities transfers between MKK participants and matching of partcipant instructions sent through the CDS screens by using SWIFT messages for the securities kept under Central Dematerialised System
MT540 Receive Free
MT542 Deliver Free
MT548 Settlement Status and Processing Advice
MT578 Settlement Allegement
MT544 Receive Free Confirmation
MT546 Deliver Free Confirmation
Corporate Actions Information Distribution Process Automation - Corporate Actions Notification
Delivery of information on cash dividends, stock dividend,rights exercise, capital decrease and general assembly meetings that are entered on the PDP to participants via SWIFT
MT564 Corporate Action Notification
DVCA - Cash Dividend
DVSE - Stock Dividend
BONU - Bonus Issue/Capitalisation Issue
RHTS - Rights Issue/Subscription Rights/Rights Offer
SPLR - Reverse Stock Split/Change in Nominal Value
MEET - General Meeting
Securities Transfers Matching - Free of Payment (External)
Securities transfers to/between foreign CSDs and matching of instructions through the CDS screens by using SWIFT messages for the foreign securities kept under Central Dematerialised System
MT540 Receive Free
MT542 Deliver Free
MT548 Settlement Status and Processing Advice
MT578 Settlement Allegement
MT544 Receive Free Confirmation
MT546 Deliver Free Confirmation
Auto-creation of the PDP announcements in the CDS
Elimination of the need to input corporate actions announcements into the CDS by issuer companies, as provided in the item (#2), Automation of Corporate Actions Information Distribution Processes
| ||July 2013|
Corporate Actions Information Distribution Process Automation \ For "unlisted" companies - Corporate Actions Notification
For the distribution of corporate actions information on the stocks and other debt instruments that are not listed at the exchange and not disclosed at the PDP
MT564 Corporate Action Notification
Statement of Holdings
For the distribution of information on holdings in the CDS either on participant or sub-account basis daily or intraday via SWIFT
MT535 Statement of Holdings
Corporate Action Processes Confirmation
For delivery of "confirmation" upon the completion of Corporate Actions processes (cash / stock dividend, rights exercise, capital decrease, etc.) via SWIFT
MT566 Corporate Action Confirmation
e-GEM SWIFT Integration Project - e-GEM Corporate Action Notification/Instruction
For the distribution of information on the meetings conducted through the e-GEM as well as processing of votes by institutional participants via SWIFT ISO20022 messages
Corporate Actions Instructions Delivery
For the distribution of information on rights exercise and the status of the related corporate actions process via SWIFT messages
MT565 Corporate Action Instruction
MT567 Corporate Action Status and Processing Advice
Integration with the National Judiciary Informatics System (UYAP)
The ongoing project between MKK and the Ministry of Justice on the integration of UYAP and MKK systems will enable users to process judicial writings on the electronic environment. Fast and secure communication between institutions will be achieved with this project.
Integration with the Central Registry Number System (MERSIS)
MKK and the Ministry of Industry and Trade continue to work together on the integration between the MKK system and the MERSIS. The documents requested from institutions that apply for MKK membership such as articles of association, by laws of funds, list of authorized signatures, commercial registration certificate, and operating certificate will be retrieved by MKK from the MERSIS when the project is finalized. Users should enter some information on investors to the MKK system in order to open investor accounts. The integration will enable users to open investor accounts for legal entities by only entering the MERSIS number of those entities to the system. One further aspect of the project in the near future is providing online general assembly notifications, and also the confirmation and archiving of general assembly resolutions. The registry process for general assembly meetings, which will be held on an electronic platform through MKK’s e-GENERAL ASSEMBLY system, will also be conducted simultaneously through MKK with the planned integration.
PDP 4.0 –Public Disclosure Platform Enhancement Project
Public Disclosure Platform (PDP), an electronic system through which electronically signed notifications required by the capital markets and Borsa İstanbul regulations are publicly disclosed, has been operated by MKK since March 17, 2014. Former enhancements were implemented by Borsa İstanbul, the previous PDP operator. Now, a wide scale renewal, improvement and enhancement work will be held by MKK. The project named PDP 4.0 has objectives of being a product of
- web based,
- platform free,
- owning visually enriched, user friendly interface and web site,
- suitable for XBRL structure,
- owning analyzable data and multi-language support,
- appropriate for recent conditions in terms of performance, security and technology,
- marketable to foreign markets,
New PDP will be integrated to Central Dematerialized System, e-GEM, e-Company, e-Governance applications of our organization.