Financial leasing, factoring, and financing companies operating on an interest-free basis are prohibited from entering into a cross-shareholding relationship

The Regulation Amending the Regulation on the Principles of Establishment and Operations of Financial Leasing, Factoring, and Financing Companies (the “Regulation”) was published and entered into force on 27 August 2025. This Regulation introduces several significant amendments.

Furthermore, Article 8/4, which concerns the requirement for financial leasing, factoring, and financing companies (the “Company”) operating on an interest-free basis to explicitly state this in their articles of association, has been revised to align with Companies operating on a participation basis. Accordingly, Companies may now engage in participation-based activities only to the extent of resources provided in adherence to participation principles, provided their related accounting records are kept available for audit. For Companies operating exclusively on a participation basis, it is mandatory to include the term “participation” in their trade names and to specify in their articles of association that their activities are based on participation principles.

Regarding branch operations, Companies are now obligated to submit a copy of the document proving the fulfillment of the financial activity permit fee liability related to branch opening to the Banking Regulation and Supervision Agency (“BRSA”) within 3 months of obtaining the branch opening permit. The one-month obligation to notify the BRSA of branch closures and address changes, which previously started on the date of closure or address change, has been amended to start on the date of registration with the trade registry of the closure or address change.

A new paragraph has been added, regulating the establishment and participation of Companies in partnerships. Companies may only establish partnerships or participate in existing partnerships that qualify as credit institutions or financial institutions, both domestically and internationally. The establishment of or acquisition of shares in such partnerships requires the permission of the Banking Regulation and Supervision Board (the “Board”). However, equity investments made for trading purposes, share acquisitions for the purpose of collecting receivables, and participation in capital increases of partnerships are exempt from this permission requirement.

Moreover, the Regulation now stipulates that Companies may not enter into a cross-shareholding relationship as defined in the Turkish Commercial Code No 6102. Companies found to be in violation of this provision must rectify their non-compliance by 27 August 2026.

Finally, with respect to publicly traded companies, the provisions of Article 11/A, titled ‘Shares Acquired from the Stock Exchange,’ of the Regulation on Transactions of Banks Subject to Authorization and Indirect Shareholding shall apply by analogy. Accordingly, in order to exercise shareholder rights other than dividends, it shall be mandatory to obtain the BRSA’s approval, regardless of whether the shares confer the right to appoint members to the board of directors or the audit committee, or whether there is an intention to exercise voting rights, in cases where such privileged shares are acquired from the stock exchange. Defense shall be sought from those who exercise shareholder rights other than dividends without obtaining the required authorization, as if they had been registered in the share ledger.