In our previous legal alert dated November 5, 2018, we announced that the Banking Regulatory and Supervisory Authority (the “BRSA”) distributed to the members of the Turkish Banks Association (the “TBA“) a draft amendment to the Regulation Regarding the Restructuring of Debts Owed to the Financial Sector (the “Regulation“).
The amendment entered into force with its publication on the Official Gazette dated November 21, 2018 and No. 30602.
- All foreign financial institutions will be able to participate in the financial restructuring process without being subject to the approval of the creditors’ majority or any other conditions. Framework agreements will determine the related principles and procedures.
- Turkish banks, financial leasing companies, finance companies, factoring companies, capital markets institutions, insurance and reinsurance companies, payment services and e-money institutions and system operators will not be able to apply for financial restructuring as debtors.
- The amendments clarified that in order for the debtors to benefit from financial restructuring, the debtors will be expected to be able to repay their debts within a reasonable period.
- Framework agreements will determine the institutions that will review the debtors’ financial status. In this respect, these institutions are no longer required to be authorized by the BRSA.
The amendments enable foreign financial institutions to participate in the financial restructuring process.