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Set Up Exchange Traded Funds in Turkey

Updated on Friday 11th November 2016

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Set-up-exchange-traded-funds-in-TurkeyOne of the most employed types of investment funds in Turkey is the exchange traded fund (ETF). Turkish exchange traded funds were first regulated in 2003 in order to allow investors the possibility of making a good return on their investment easy and fast. ETFs are open-ended investment funds which follow an index and which are traded on the Turkish Stock Exchange. The greatest advantage of exchange traded funds is that they can be traded like the ordinary shares of public companies in Turkey. However, following certain indexes, their price will be subject to various fluctuations throughout the day.

Our company registration consultants in Turkey can offer more information on the legislation related to opening exchange traded funds.

The characteristics of ETFs in Turkey

Exchange traded investment funds have the same features of all other Turkish investment funds, however there are a few traits that differentiate them from the others:

  • -          the ETF will follow an index and its financial instruments are traded on the Stock Exchange;
  • -          the investors are allowed to redeem their assets which can be bonds, gold or other precious metals, stock and even cash;
  • -          an ETF can issue participation certificates which may be exchanged for the securities in the fund’s portfolio;
  • -          short selling is possible for an exchange traded fund.

Exchange traded funds can be marketed by:

  • -          Turkish banks;
  • -          insurance companies;
  • -          brokerage houses;
  • -          pension funds.

Our Turkish company formation agents can offer information on the taxation of stocks traded by ETFs.

How to establish exchange traded funds in Turkey

As an open-ended investment fund, the ETF must be registered with the Turkish Companies Register under the form of a joint stock company with a minimum share capital of 2 million TRY. The fund must reach a total capital of 4 million TRY within 6 months from the incorporation. Also, the company must bear the name investment securities company in order to be approved by the Capital Markets Board in Turkey. The ETF may change its capital based on the number of shares issued.

For full information on how to set up an exchange traded fund, do not hesitate to contact our company formation representatives in Turkey.

 

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