IPO rules changed – lexology

Recent Developments

To protect the interests of investors, the Capital Markets Board (the “plank“) has introduced significant changes to the sales methods and distribution principles for the IPO of shares (“IPOs“) with its decision of March 30, 2023 and the number i-SPK-128.21 (the “Decision“). You can access the board bulletin where the decision was published here.

what’s new

According to the decision, IPOs are subject to the following rules:

1. If the market value of the shares to be publicly offered is TRY 750,000,000 or less, the sale will be made through the public sale method.

2. If the market value of the shares to be publicly offered is TRY 750,000,000 or more and the sale is subject to an off-exchange bookbuilding process, the following rules apply:

• An even distribution is prescribed for the individual groups of investors, a proportional distribution is not permitted.
• The number of shares for which each investor can bid must not exceed 1/4 of the total number of shares allotted to each investor group.
• In the case of domestic institutional investors and if there is sufficient demand, the number of shares to be distributed to each investor may not exceed 1% of the total number of shares offered to the public.
• If there are enough bids for a certain group of investors at the end of the bookbuilding period, the shares allocated to that group will not be allocated to another group of investors. If there is insufficient demand for a particular group, the remaining shares in that group will be reallocated to meet bids from domestic retail investors.

3. Shares acquired by institutional investors for their own portfolios will not be transferred to individual investor accounts.

4. Investors who purchase Shares may not sell those Shares off the Exchange, transfer them to other investor accounts, or make special order and/or wholesale purchases on the Exchange for 90 days from the date of publication. For shares held by the Company’s existing shareholders (other than those sold in the IPO), this restriction will apply for 180 days from the date of approval of the Offering Circular and will also prohibit any sale on the stock exchange.

Diploma

The decision is significant because it introduces significant changes to the sales methods and distribution principles applicable to IPOs.

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