A recent communiqué regarding lease certificates was published in the Official Gazette dated the 7th June 2013 and numbered 28670. This new communiqué III-61-I regulates matters such as the guidelines for determining the lease certificate classes; establishment, articles of association of the asset leasing companies (ALCs) and rights, assets which can be acquired by these companies.
The communiqué does not regulate any issues about sovereign Sukuk issuances, which are carried out by the Under secretariat of Treasury. The significance of this communiqué is that it introduces new types of Sukuk to the Turkish market. Sukuk are referred to as ‘lease certificates’ in Turkey although they have the same characteristics as Sukuk.
Unlike the previous communiqué, which only regulated Sukuk ljarah, this new communiqué explains in detail the structure and has more tools to protect the investor.
The lease certificates introduced to the investor are as follows:
1. Lease certificates based on ownership (Sukuk ljarah)
2. Lease certificates based on management agreements (Sukuk Al Musaqa)
3. Lease certificates based on sale and purchase (Sukuk Murabahah)
4. Lease certificates based on partnership (Sukuk Musharakah)
5. Lease certificates based on contractor agreements (Sukuk Istisnah)
The mentioned lease certificates may be issued with or without a public offering. In the event lease certificates are issued without a public offering, this issuance may be carried out through a private placement or sale to the qualified investor methods.
Concerning the ALCs; it is now possible for them to issue lease certificates for other companies and to carry out more than one lease certificate issuance at any one time. ALCs are required to have an independent board member on the board of directors to avoid any conflict of interest while important decisions are subject to the independent board member’s affirmative vote.
ALCs that are incorporated in accordance with the previous communiqué are required to comply with the new communiqué’s provisions regarding their partnership structure, establishment of the administrative board and articles of association. Otherwise these ALCs cannot issue any further lease certificates.
Ali Ceylan is a partner at Baspinar & Partners Law Firm. He can be contacted at
[email protected]
.