TÜRKÇE
  Updated: 22/05/2019

Chapter 9- Financial Services

Content of the Chapter

Acquis under Financial Services Chapter consists mostly of legal arrangements concerning with capital markets, insurance (including individual pension systems) and banking sectors.

The acquis sets minimum binding standards concerning taking-up and conduct of finance businesses together with financial structure and supervision of financial services providers. Also, the legal framework of markets, in which these institutions are operating, is set by the EU acquis. 

In the wake of the financial crisis, EU financial services acquis has passed through a fundamental transformation process. In this context, regulatory landscape has been continuously evolving along with the establishment of new mechanisms. During the crisis period, the importance of the specific Chapter-related areas of systemic risk such as investment/hedge funds, derivatives, credit rating agencies and payment and settlement systems and services has been elevated and become the focus of the EU reform agenda. 

The efforts to further strengthen/deepen the EU level supervision system are currently continuing. The latest development in this field is the Council Decision in 2013 on the establishment of a Banking Union. The Banking Union covers all banks established in the Euro Area and other participating Member States. The Union has two components: Single Supervisory Mechanism (SSM) and Single Resolution Mechanism (SRM). European Central Bank (ECB) is the authority for performing SSM functions. Regarding the SRM, the single resolution fund (SRF), which is financed by the contributions of the participating banks (bail-in) - without the use of any public funds (bail-out), is governed by prospective Single Resolution Board. Whereas the assessment and decision on whether or not a bank is failing/likely to fail is made by ECB (in other words, ECB pulls the trigger of the resolution mechanism), the resolution process is governed by the SRM Board. The political consensus regarding the SRM was achieved in 2014. On 1 January 2016, the EU's SRM became operational and one of its key components – the single resolution fund– entered into force.

The capital markets union (CMU) is an action plan of the European Commission to mobilize capital in Europe for creating deeper and more integrated capital markets.

Current Stage of the Negotiations on the Chapter

The explanatory meeting was held on 29-30 March 2006 and screening meeting was held on 2-3 May 2006, and the screening report was prepared by the Commission on 17 April 2007. It is stated in the screening report that Turkey is sufficiently aligned with EU legislation in the scope of this chapter. Banking sector and capital markets are found substantially aligned with EU legislation while it is highlighted that some efforts are needed in the insurance sector.

Financial Services Chapter is one of the eight chapters that are blocked due to Additional Protocol. In the term presidency letter of 25 June 2007, no additional technical criterion was set. 

In the field of banking, a sound legal framework has been established thanks to the measures taken after the 2001 crisis. Recently, secondary legislation has been drafted to align with EU capital adequacy directives based on Basel-III accord. In 2013, the deposit insurance limit was increased from 50,000 Turkish Liras to 100,000 Turkish Liras and the deposit insurance system in Turkey became more harmonized with that of the EU.

Between September 2015 and March 2016, Turkey successfully passed through the Regulatory Consistency Assessment Program (RCAP) of Basel Committee. Within this framework, the Turkish banking regulations were reviewed regarding compliance with the Basel standards.

Regarding the payment systems and services market, “the Law No. 6493 on the Payment and Securities Settlement Systems, Payment Services and Electronic Money Institutions” was entered into force on 27 June 2013. The law designates BRSA as the regulatory and supervisory authority responsible for payment services and electronic money sectors, and the Central Bank of the Republic of Turkey (CBT) as the principal responsible authority for the payment and securities settlement systems.

Upon the request of Capital Markets Board of Turkey to European Securities and Market Authority (ESMA) to recognize equivalency of Turkish share prospectuses under EU legislation, ESMA stated that a prospectus drawn up according to Turkish laws and regulations can constitute a valid prospectus under the Prospectus Directive (PD) in its opinion dated February 8, 2016. This is a significant development that will contribute to the further integration of Turkish and European financial markets and support “Istanbul Financial Center Project”.

By the entry into force of the framework Insurance Law in June 2007, the long-standing legal vacuum in the insurance sector was dispelled, and the out-of-court settlement mechanisms were introduced. The harmonization in this sector is being maintained through the secondary legislation. In this context, the out-of-court settlement mechanisms were strengthened in 2013 with the introduction of new, and consolidation of existing rules applicable to the arbitration committees and those in charge of the appeals of arbitration decisions. Another legislative development in 2013 in insurance field is achieved by strengthening the rights of policyholders/beneficiaries to information and determination of standard rules related to lifelong renewal of insurance contract.

Relevant Subcommittee Meetings

Sub-Committee No. 4 on Economic and Monetary Issues, Movement of Capital and Statistics.

Useful Links

For European Commission DG in charge of financial markets regulation https://ec.europa.eu/info/departments/financial-stability-financial-services-and-capital-markets-union_en

For EU’s financial services legislation https://ec.europa.eu/info/law/law-topic/eu-banking-and-financial-services-law_en

For detailed information on EU Banking Union https://ec.europa.eu/info/business-economy-euro/banking-and-finance/banking-union_en

For detailed information on Capital Markets Union Action Plan https://ec.europa.eu/info/business-economy-euro/growth-and-investment/capital-markets-union/what-capital-markets-union_en

Screening Process

Presentations-Explanatory Screening Meeting (29-30 Mart 2006)

Presentations-Bilateral Screening Meeting (2-3 Mayıs 2006) 

Screening Report (Pdf-88 KB)

 


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