Capital Market Instruments
Capital market instruments constitute the subject matter of the issuance of capital market instruments and form the basis of the prospectus to be issued within the scope of such issuance. The types of capital market instruments are listed in the Capital Markets Law. Pursuant to this article, they are defined as securities, derivative instruments, investment contracts, and other capital market instruments determined by the Capital Markets Board to fall within this scope. (SerPK Art. 3/1-ş)
For capital market instruments to be publicly offered or traded on the stock exchange, a prospectus must be prepared and approved by the Capital Markets Board. (SerPK Art. 4) If capital market instruments are not publicly offered, an issuance document must be prepared instead of a prospectus, and this issuance document must be approved by the Capital Markets Board. (SerPK Art. 11)
Within this framework, Capital Market Instruments can be defined as follows:
1) Securities
The definition of securities is set forth in the Capital Markets Law. Accordingly, securities include shares, share-like other securities, and deposit certificates related to such shares, debt instruments, or debt instruments based on securitized assets and income, as well as deposit certificates related to such securities, excluding cash, checks, bills of exchange, and bonds. (SerPK Art. 3/1-o) Checks, promissory notes, and bills of exchange are not included in the scope of securities as they are short-term money market instruments.
In addition to the securities listed above, the Capital Markets Board is also authorized under the Law to create new securities through the circulars it publishes.
2) Derivative Instruments
Derivative instruments are futures contracts traded in the derivatives market, which is a separate market. These instruments facilitate risk management, enable the prediction of future prices, facilitate companies’ access to capital, and assist in decision-making regarding the future. They can also be defined as instruments that enable the trading of rights and obligations related to an asset without transferring ownership of the asset itself.
The scope of derivative instruments is outlined in the Capital Markets Law. According to this law:
“Derivative instruments: The following or other derivative instruments determined by the Board to fall within this scope:
1) Derivative instruments granting the right to purchase, sell, or exchange securities,
2) The value of which is based on the price or yield of a security; the price or price change of a foreign currency; interest rates or changes in interest rates; the price or price changes of precious metals or precious stones; the price or price changes of commodities; changes in statistics published by institutions deemed appropriate by the Board; credit risk transfer instruments, energy prices and climate variables, and derivatives based on an index level or changes in the level of such indices, derivatives of such instruments, and derivatives that grant the right to exchange the underlying assets listed above with one another,
3) Leveraged transactions involving foreign exchange and precious metals, as well as other assets determined by the Board. (SerPK Art. 3/1-u)
Within this scope, other instruments determined by the SPK to be derivative instruments, except for the three groups of derivative instruments listed above, will also be evaluated in this group.
3) Investment Contracts
It is observed that investment contracts are recognized as one of the capital market instruments under the Capital Markets Law. However, no definition has been provided for these instruments. The regulation on investment contracts enables the recognition of a transaction not specifically defined in the Law as a capital market instrument in terms of its nature. If a capital market instrument is not a security or derivative instrument and is traded and can be bought and sold on the capital market, it is referred to as an investment contract. [2]
Four elements are required for the existence of an investment contract: a monetary investment, a joint venture, the expectation of profit, and the efforts of third parties or program organizers. Although the investor who expects a financial return must invest the money themselves, the money does not have to be in cash; assets that can be used instead of cash or values that can be quickly converted into cash may also be invested. [3]
[1] İslamoğlu, G., s. 54
[2] İslamoğlu, G., s. 55; aynı yönde bkz: Adıgüzel, B. 6362 Sayılı Sermaye Piyasası Kanunu’nda Sermaye Piyasası Aracı Kavramı, TFMHD (2017), C.3, S.1, s.5.
[3] İslamoğlu, s. 55-56; aynı yönde bkz; Adıgüzel, s. 5.
Year: 2025
Application: Capital Market Instruments
Lawyers: Mehmet Said Sarıbaş & Bilal Akbaba
E-mail: info@saribasakbaba.av.tr
Website: saribasakbaba.av.tr
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