Turkey’s Capital Markets Law aims to align regulations and market practice in the country with those of the European Union while strengthening investor protection and market liquidity.

Notable changes include implementation of squeeze-out rights; the introduction of licensing requirements for sub-custodian banks where providers of custody or sub-custody services are obliged to obtain a general custody licence from the Capital Markets Board (CMB); and the use of trading, clearing, market information and risk management systems and CSD settlement systems of Nasdaq OMX Group by BIST (Borsa Istanbul) and Takasbank.

Transfer of votes via Swift to the electronic general meeting system (e-GEM) is expected to be provided in 2015, says Ibrahim Yurtlu, manager custody and clearing at HSBC Securities Services.

With investment funds representing only around 2% of Turkish GDP, there is significant potential for growth adds Geraud de Saint Vincent, head of Turkey at BNP Paribas Securities Services. “The newly created portfolio custodian concept, a version of the depositary bank, opens up room for specialised securities services providers.”

The Turkish Council of Ministers has decided to offer up to 42.75% of Borsa Istanbul, the Turkish stock exchange, in 2015 with a possible extension into 2016.