Decree No.32 on the protection of the value of Turkish currency has been amended

1. Intermediary requirement in derivative transactions

According to paragraph 8 of Article 6 of Decree No. 32, the purchase and sale of all kinds of derivative instruments from outside of Türkiye, including futures and options contracts, must be conducted through banks and intermediary firms authorised by the capital markets board of Türkiye, provided that the transfer of funds is made through Turkish banks.

The newly introduced changes by the amendment decree now provide an exception to this rule. As long as no promotional, advertising, or marketing activities are directed towards residents in Türkiye, it is not mandatory for derivative transactions conducted by residents in Türkiye with financial institutions abroad, entirely at their own initiative, to be carried out through banks and intermediary firms. Nevertheless, the transfer of funds related to such transactions must still be made through banks.

With this addition to Article 6(8) of the Decree No. 32, the amendment decree has also resolved the ongoing discussion regarding whether which derivative trades to be entered into between a domestic and a foreign counterpart would require the involvement of a locally licensed intermediary. Historically, the broad reference to “all derivative instruments” in the relevant article led to different interpretations in practice as to whether over-the-counter derivative transactions (OTC transactions) are caught by this provision, and hence, must be carried out through locally licenced intermediary institutions. This new clarification effectively ends the debate on this matter as well, repealing the intermediary requirement for all types of derivative transactions that are entered into between a domestic and a foreign counterpart subject to the conditions mentioned above being met.

2. Foreign currency-denominated guarantees and sureties issued by Turkish residents

One other significant change introduced by the amendment decree pertains to the ability of Turkish residents to provide foreign currency-denominated guarantees and sureties. The amendment decree, by adding a new paragraph 4 to the Article 18 of the Decree No.32, now explicitly allows direct shareholders and group companies of Turkish borrowers to provide foreign currency denominated guarantees and sureties for loans obtained from Türkiye.