The Turkish Banking Regulation and Supervision Agency (the “BRSA“) has recently amended the “Regulation on Calculation of Banks’ Liquidity Coverage Ratio” (the “Regulation“), and the definition of the Small and Medium-Sized Enterprise (“SME“) in the Regulation has changed effective as of July 13, 2017.
Overview of the Amendment
- Previously, SMEs were defined by referring to Article 4 of Regulation No. 2005/9617, which classifies and regulates the qualifications of SMEs in detail. SMEs were defined as enterprises that employ less than 250 employees and have annual net sales revenue or financial balances less than TRY 40 million. SMEs were classified as micro, small and medium-sized enterprises in the respective regulation.
- With the recent amendment, the above mentioned reference and consequently, the definition of SMEs has changed. The Regulation refers to Article 3 of the Regulation on Calculation and Evaluation of Banks’ Capital Adequacy and accordingly, SMEs within the scope of the Regulation are defined as enterprises that have revenue below a limit to be determined by the BRSA.
The amendment was made to align the respective definition with previous changes in relevant BRSA regulations. SMEs were explicitly determinable under Regulation No. 2005/9617; however, with the current definition, the BRSA has discretion to determine the revenue limit by which an SME subject to the Regulation will be considered.