BRSA to Continue Its Focus on NPLs: Turkish Asset Management Companies Reshaped
Banking & Finance
The Banking Regulation and Supervision Agency (BRSA) abolished the Regulation on Establishment and Activities of Asset Management Companies and adopted a new regulation titled Regulation on Establishment and Activities of Asset Management Companies and Receivables to be Acquired (“Regulation“) on 14 July 2021, reshaping the Turkish asset management companies.
Sale of performing loans
- With the Regulation, the BRSA has clarified that asset management companies can purchase not only NPLs but also performing loans of financial institutions.
- In parallel with the current practice of banks, the BRSA has made it compulsory for financial institutions to sell their loan portfolio through a tender, except for the sale of individual risk group portfolios of assets.
Limitation to financings to be provided to debtors
- The total amount of financings that can be provided by an asset management company to its debtors will no longer be able to exceed three times the equity capital of the respective asset management company.
Restriction to communication with debtors
- With the new set of requirements in relation to the collection process, the BRSA has imposed new restrictions for the communications of asset management companies with financial consumers. Accordingly, asset management companies will no longer be able to contact such debtors after 8 pm, on Sundays and during public holidays.
New corporate governance rules
- The BRSA has adopted new corporate governance rules in relation to asset management companies. Pursuant to the amendments, the minimum number of board members has decreased to three and the qualifications for general managers have been updated.
With the new Regulation, the BRSA has updated the legal infrastructure for Turkish asset management companies with a view to pursuing the objective of enhancing these companies’ capacities set out in the Economy Reform Package.