Recent Developments
The Regulation Amending the Regulation (the “FLFF Companies’ Establishment and Operations Regulation”) on the Establishment and Operating Principles of Financial Leasing, Factoring and Financing Companies (the “FLFF Companies”) (the “FLFF Amending Regulation”) and the Regulation Amending the Regulation (the “Asset Management Companies’ Establishment and Operations Regulation”) on the Establishment and Operating Principles of Asset Management Companies (the “Asset Management Companies; together with the FLFF Companies, the “Companies”) and Transactions Regarding the Receivables to be Taken Over (the “Asset Management Companies Amending Regulation”; together with the FLFF Amending Regulation, the “Amending Regulations”) were published in the Official Gazette dated 27 August 2025 and numbered 32999.
What do the Amending Regulations regulate?
- Common Ground: Regulation of Participation-Based Operations
The Amending Regulations clarified their respective provisions regarding the Companies’ participation-based (interest-free) operations. Accordingly, the Companies will be able to operate on a participation basis, provided that these operations are limited only to the resources they have allocated for this purpose. In addition, the Companies that will operate exclusively on a participation basis will be required to include the term “participation” in their trade names and state in their articles of association that their operations are based on principles of participation. The procedures and principles regarding operation on the basis of participation will be determined under the secondary regulations to be issued by the Banking Regulatory and Supervisory Authority (the “BRSA”).
- Changes Affecting the FLFF Companies
The material amendments made by the FLFF Amending Regulation can be summarized as follows:
a. The FLFF Companies are only allowed to establish or participate in credit institutions or financial institutions in Türkiye and abroad. Establishing or participating in these companies is made subject to the BRSA’s approval. The FLFF Companies with shareholdings in violation are required to remedy these violations within one year from the entry into force of the FLFF Amending Regulation. The BRSA is authorized to increase this period up to two times.
b. Equity investments for trading purposes and share acquisitions for the purpose of collection of receivables will not subject to the BRSA’s approval.
c. Furthermore, the FLFF Companies will not be allowed to directly or indirectly hold shares in companies and organizations that directly or indirectly hold shares in them, or provide advances in return for receiving a security interest on those shares.
- Changes Affecting the Asset Management Companies
The material amendments made with the Asset Management Companies Amending Regulation can be summarized as follows:
a. The independent audit of information systems of the Asset Management Companies will be conducted every three years.
b. The Asset Management Companies will be able to raise funds from shareholders for the furtherance of their core business activities.
c. The Asset Management Companies are obliged to divest the subsidiaries they have had to acquire due to the receivables they have taken over, within three years.
d. Originators subject to the supervision and oversight of the BRSA, will be able to transfer their receivables to the Asset Management Companies that control or are controlled by them only through a tender process. However, this requirement will not apply to the Asset Management Companies in which the Savings Deposit Insurance Fund holds at least twenty percent shareholding.
e. Previously, originators subject to the supervision and oversight of the BRSA could transfer their non-performing and active receivables to the Asset Management Companies. With the amendment, the receivables that can be transferred to the Asset Management Companies are limited to non-performing receivables and receivables whose collection of principal and/or interest payments are more than 60 days overdue from their due or payment dates.
Conclusion
The Amending Regulations aim to alleviate the transparency, auditability and compliance standards of the Companies.
