Türkiye Sinai Kalkinma Bankasi A.Ş.; Notice of Application, 21609-21611 [2016-08298]
Download as PDF
<![CDATA[
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
number, or applicant using the
Company name box, at https://www.sec.
gov/search/search.htm or by calling
(202) 551–8090.
SECURITIES AND EXCHANGE
COMMISSION
[Investment Company Act Release No.
32066; 812–14514]
¨
Turkiye Sinai Kalkinma Bankasi A.S.;
¸
Notice of Application
April 6, 2016.
Securities and Exchange
Commission (the ‘‘Commission’’).
ACTION: Notice of application for an
order under section 6(c) of the
Investment Company Act of 1940
(‘‘Act’’) for an exemption from all
provisions of the Act.
AGENCY:
asabaliauskas on DSK3SPTVN1PROD with NOTICES
SUMMARY:
¨
Applicant: Turkiye Sinai Kalkinma
Bankasi A.S. (‘‘Applicant’’).
¸
Summary of Application: Applicant, a
banking institution organized as a
public joint stock company of unlimited
duration under the laws of the Republic
of Turkey (‘‘Turkey’’) requests an order
exempting it from all provisions of the
Act in connection with the offer and
sale of its debt securities in the United
States.
Filing Dates: The application was
filed on July 14, 2015, and amended on
November 25, 2015 and March 14, 2016.
Hearing or Notification of Hearing: An
order granting the application will be
issued unless the Commission orders a
hearing. Interested persons may request
a hearing by writing to the
Commission’s Secretary and serving
applicant with a copy of the request,
personally or by mail. Hearing requests
should be received by the Commission
by 5:30 p.m. on May 2, 2016, and
should be accompanied by proof of
service on applicant, in the form of an
affidavit or, for lawyers, a certificate of
service. Hearing requests should state
the nature of the writer’s interest, the
reason for the request, and the issues
contested. Persons who wish to be
notified of a hearing may request
notification by writing to the
Commission’s Secretary.
ADDRESSES: Secretary, U.S. Securities
and Exchange Commission, 100 F Street
NE., Washington, DC 20549–1090.
Applicant, Meclis-i Mebusan Caddesi
No. 81 34427 F(nd(kl(, Istanbul, Turkey.
FOR FURTHER INFORMATION CONTACT:
Elizabeth G. Miller, Senior Counsel, at
(202) 551–8707, or Holly Hunter-Ceci,
Branch Chief, at (202) 551–6825
(Division of Investment Management,
Chief Counsel’s Office).
SUPPLEMENTARY INFORMATION: The
following is a summary of the
application. The complete application
may be obtained via the Commission’s
Web site by searching for the file
VerDate Sep<11>2014
17:18 Apr 11, 2016
Jkt 238001
Applicant’s Representations
1. Applicant is a banking institution
organized as a public joint stock
company of unlimited duration under
the laws of Turkey. Applicant was
established on May 31, 1950 as a
‘‘Development and Investment Bank’’ in
accordance with Turkish Banking Law,
No. 5411. As mandated by Turkish law,
Applicant’s principal activity is
promotion of Turkish economic
development through providing longterm funding for domestic and
international investment by Turkish
companies, primarily through loans
denominated in foreign currencies. The
Applicant’s mandate as a ‘‘Development
and Investment Bank’’ is to extend
medium- to long-term financing to
business enterprises, to assist domestic
and foreign capital owners to finance
the development of new businesses in
Turkey, and to contribute to
improvements in Turkish capital
markets. A majority of Applicant’s
assets, together with its consolidated
financial subsidiaries (the ‘‘Group’’),
currently consist of loans and leasing
receivables net of allowance for possible
losses and a securities portfolio (of
which 91.7% constituted Turkish
government securities). Since such
securities and loans could be considered
‘‘investment securities’’ within the
meaning of section 3(a)(1)(C) of the Act,
Applicant may be considered an
investment company, and it requests an
exemption from all provisions of the
Act.
2. As a Turkish development and
industrial bank, Applicant (i) supports
private sector, productive investments
in the Turkish industrial and service
sectors; (ii) assists with the financing
and development of new businesses in
Turkey; and (iii) contributes to the
improvement of Turkish capital
markets. Applicant may engage, inter
alia, in the following activities in
pursuit of its development banking
activities: (i) Provision of short-,
medium- and long-term loan financing
against pledges, mortgages, or other
security by way of open credits;
financing of existing and new industrial
enterprises; (iii) performance of capital
market or money market transactions in
Turkey and abroad in cooperation with
national or international institutions;
(iv) financial leasing transactions and
other similar financial transactions and
issuance of guarantees; and (v)
acceptance, establishment, and
termination of mortgages. Applicant is
PO 00000
Frm 00077
Fmt 4703
Sfmt 4703
21609
authorized to engage in the following
standard commercial and investment
banking activities: (i) ‘‘Activities of
banks (including participation banks,
saving banks, credit unions, etc.; except
central banks and investment banks)’’;
(ii) ‘‘Investment banking activities’’; (iii)
‘‘Activities for security incomes on own
account (dividends, bank interest,
participation earnings, remuneration,
etc.)’’; (iv) ‘‘Finance leasing’’; (v) ‘‘Fund
management activities bas[ed] on a fee
or contract basis (portfolio management,
mutual fund management, pension fund
management, etc.)’’; and (vi) ‘‘Activities
auxiliary to investment banking
(mergers and acquisitions activities,
business financing and venture capital
financing activities, etc.).’’
3. As of December 31, 2015, Applicant
is privately controlled, with 50.3% of its
shares held directly or indirectly by
˙s
¨
Turkiye I¸ Bankas( A.S. Group and 8.4%
¸
¨
by Turkiye Vak(flar Bankas( T.A.O. As
of the same date, 39.3% of Applicant’s
shares were publicly traded on the
˙
Borsa Istanbul A.S. (‘‘BIST’’) (of which
¸
59.3% were held by foreign investors),
with the remaining shares owned by
various other institutional investors. A
significant portion of the Group’s
obligations is subject to a guarantee by
the Turkish Treasury.
4. Applicant is subject to a regulatory
regime substantially equivalent to that
of commercial banks in Turkey,
including oversight and supervision by
the Turkish Banking Regulation and
Supervision Agency (the ‘‘BRSA’’), the
Central Bank of Turkey (the ‘‘Central
Bank’’), the Capital Markets Board of
Turkey, the BIST, the Turkish Banks
Association, and the Financial Crimes
Investigation Board, including a full
range of banking, competition, antitrust,
anti-money laundering, sanctions and
other laws and regulations designed to
maintain the safety and financial
soundness of Turkish banks, ensure
their compliance with economic and
other obligations, and limit their
exposure to risk. Applicant is subject to
extensive oversight, supervision, and
regulation by the Turkish government
on the same terms as other large
commercial banks, including in
accordance with the Basel III framework
and international capital and liquidity
standards. The Turkish Treasury
guarantees a significant portion of
Applicant’s long-term funding from
development financial institutions and
appoints a representative to Applicant’s
Board of Directors. Applicant’s Board of
Directors and management have
implemented comprehensive policies
and procedures governing Applicant’s
banking operations.
E:\FR\FM\12APN1.SGM
12APN1
21610
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
asabaliauskas on DSK3SPTVN1PROD with NOTICES
5. As described more fully in the
application, while Applicant performs
many of the same functions as Turkish
commercial banks and is subject to
extensive supervision and regulation by
the Turkish government, Applicant is
prohibited from accepting deposits from
the public. The scope of Applicant’s
operations is more limited than that of
Turkish commercial banks owing to its
specific objectives as a development and
investment bank.
6. Development financial institutions
(‘‘DFIs’’) are Applicant’s primary source
of funding; however, as DFI funding is
typically received in the form of ‘‘tied
loans’’ limited to a specific purpose or
sector within Turkey, Applicant plans
to offer and sell debt securities to
supplement its funding base.
Accordingly, Applicant proposes to
issue and sell its debt securities in the
United States from time to time,
including under its Global Medium
Term Note Program. Applicant intends
to use the proceeds of any such sale of
securities as an additional source of
funding for its general purposes and in
connection with its development and
investment banking mandate. The
proceeds of any such sale of debt
securities will be used by Applicant as
an additional source of funding for its
general corporate purposes and in
connection with its development and
investment banking mandate.
Specifically, Applicant intends to use
any such debt security funding to
extend loans to public-private
partnerships and other socially
responsible investment projects,
including health, education, and
renewable energy projects, that are
ineligible for DFI tied loan funding.
Applicant’s Legal Analysis
1. Section 3(a)(1)(C) of the Act defines
an ‘‘investment company’’ to include
any issuer engaged in the business of
investing, reinvesting, owning, holding
or trading in securities, and that owns
or proposes to acquire investment
securities having a value exceeding 40%
of the issuer’s total assets. Section
3(a)(2) of the Act defines ‘‘investment
securities’’ to include all securities
except Government securities, securities
issued by employees’ securities
companies, and securities issued by
majority-owned subsidiaries of the
owner which (a) are not investment
companies, and (b) are not relying on
the exclusions from the definition of
investment company in section 3(c)(1)
or 3(c)(7) of the Act.
2. Applicant states that as of
December 31, 2015, the Group had total
assets of TL21.4 billion, of which loans
and leasing receivables net of allowance
VerDate Sep<11>2014
17:18 Apr 11, 2016
Jkt 238001
for possible losses accounted for 63.8%
and the Group’s securities portfolio for
18.0% (of which 91.7% constituted
Turkish government securities). Such
loans and securities could be construed
as ‘‘investment securities’’ within the
meaning of Section 3(a)(1)(C) of the Act,
thus potentially rendering Applicant a
prima facie ‘‘investment company.’’ As
a result, Applicant states that it could be
deemed to be an ‘‘investment company’’
under section 3(a)(1)(C) of the Act.
3. Section 6(c) of the Act provides, in
relevant part, that the Commission, by
order upon application, may
conditionally or unconditionally
exempt any person, security, or
transaction from any provision of the
Act, if and to the extent necessary or
appropriate in the public interest and
consistent with the protection of
investors and the purposes fairly
intended by the policy and provisions of
the Act.
4. Rule 3a–6 under the Act excludes
foreign banks from the definition of an
investment company under the Act. A
‘‘foreign bank’’ is defined in the rule to
include a banking institution ‘‘engaged
substantially in commercial banking
activity’’ which in turn is defined to
include ‘‘extending commercial and
other types of credit, and accepting
demand and other types of deposits.’’
Applicant represents that it is the
functional equivalent of a ‘‘foreign
bank’’ insofar as it (i) offers financial
services and issues financial products
similar to those offered and issued by
other Turkish commercial banks and (ii)
is subject to extensive oversight,
supervision, and regulation as a bank by
the Turkish government. However, by
Turkish law, Applicant is prohibited
from accepting deposits. Therefore,
Applicant states that there is
uncertainty as to whether the Rule 3a–
6 exemption would be deemed to apply.
5. Applicant also believes that the
rationale of Congress and the
Commission in promulgating rules
under the Act in exempting foreign
financial institutions applies to
Applicant. Applicant represents that it
is subject to extensive oversight,
supervision and regulation by the
Turkish Government to an equivalent
extent as applies to Turkish commercial
banks. Applicant further represents that
it is subject to a more direct form of
government oversight and supervision
than commercial banks in Turkey owing
to representation of the Turkish
Treasury on the Applicant’s board of
Directors and the Turkish government’s
guarantee of certain of the Group’s
liabilities. Applicant also represents that
the Turkish government guarantees a
significant portion of the Group’s
PO 00000
Frm 00078
Fmt 4703
Sfmt 4703
obligation and the Turkish Treasury
appoints a representative to Applicant’s
Board of Directors. Accordingly,
Applicant represents that its operations
do not lend themselves to the abuses
against which the Act is directed, and
states that it believes it satisfies the
standards for relief under section 6(c) of
the Act.
Applicant’s Conditions
Applicant agrees that the order
granting the requested relief will be
subject to the following conditions:
1. In connection with any offering by
Applicant of its debt securities in the
United States, Applicant will appoint an
agent in the United States to accept
service of process in any suit, action, or
proceeding brought with respect to such
debt securities instituted in any state or
federal court in the Borough of
Manhattan, The City of New York, New
York. Applicant will expressly submit
to the jurisdiction of New York State
and U.S. federal courts sitting in the
Borough of Manhattan, The City of New
York, New York, with respect to any
such suit, action, or proceeding.
Applicant also will waive the defense of
forum non conveniens to the
maintenance of any such action or
proceeding. Such appointment of an
agent to accept service of process and
such consent to jurisdiction shall be
irrevocable until all amounts due and to
become due in respect thereof have been
paid. No such submission to jurisdiction
or appointment of agent for service of
process shall affect the right of a holder
of any such security to bring suit in any
court which shall have jurisdiction over
Applicant by virtue of the offer and sale
of such securities or otherwise.
2. Applicant undertakes to provide to
any person to which it offers its debt
securities in the United States
disclosure documents that are at least so
comprehensive in their description of
Applicant and its business as those
which may be used by comparable U.S.
issuers in similar U.S. offerings of such
securities and that contain the latest
available audited annual financial
statements (and, if available, reviewed
interim financial statements) of the
Group. Applicant further undertakes to
ensure that any underwriter or dealer
through whom it makes such offers will
provide such disclosure documents to
each person to whom such offers are
made prior to any sale of securities to
such offeree. Such documents will be
updated promptly to reflect any material
change in the Group’s financial status
and shall be at least as comprehensive
as offering memoranda customarily used
in similar offerings in the United States.
Any offering of Applicant’s securities in
E:\FR\FM\12APN1.SGM
12APN1
Federal Register / Vol. 81, No. 70 / Tuesday, April 12, 2016 / Notices
the United States shall comply with
applicable U.S. securities and anti-fraud
laws and regulations.
3. Applicant shall rely upon the order
so long as (i) its activities conform in all
material respects to the activities
described in this Application and (ii)
Applicant continues to be regulated by
the BRSA, the Central Bank, or other
applicable Turkish regulatory
authorities as a development and
investment bank as described in the
application.
For the Commission, by the Division of
Investment Management, pursuant to
delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016–08298 Filed 4–11–16; 8:45 am]
By the Commission.
Jill M. Peterson,
Assistant Secretary.
forth in sections A, B, and C below, of
the most significant aspects of such
statements.
[FR Doc. 2016–08484 Filed 4–8–16; 4:15 pm]
A. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–77547; File No. SR–CBOE–
2016–021]
Self-Regulatory Organizations;
Chicago Board Options Exchange,
Incorporated; Notice of Filing and
Immediate Effectiveness of a Proposed
Rule Change To Establish Fees for
Options That Overlie a Reduced Value
of the FTSE 100 Index and the FTSE
China 50 Index
BILLING CODE 8011–01–P
April 6, 2016.
SECURITIES AND EXCHANGE
COMMISSION
In the Matter of Royale Globe Holding
Inc., File No. 500–1; Order of
Suspension of Trading
asabaliauskas on DSK3SPTVN1PROD with NOTICES
April 8, 2016.
It appears to the Securities and
Exchange Commission that there is a
lack of current and accurate information
concerning the securities of Royale
Globe Holding Inc. because of questions
regarding the accuracy of publicly
available information about the
company’s operations and securities
ownership, including details about its
affiliation with Maxim Capital Limited,
a purported investment company
operating under the name Maxim
Trader. Royale Globe Holding Inc. is
delinquent in its periodic filings with
the Commission, having not filed any
periodic reports since it filed its Form
10–Q for the period ended July 31, 2015.
Royale Globe Holding Inc. (CIK No.
0001383145), is a Nevada corporation
with its principal place of business
listed as Kuala Lumpur, Malaysia with
stock quoted on OTC Link (previously,
‘‘Pink Sheets’’) operated by OTC
Markets Group, Inc. under the ticker
symbol ROGP.
The Commission is of the opinion that
the public interest and the protection of
investors require a suspension of trading
in the securities of the above-listed
company.
Therefore, it is ordered, pursuant to
Section 12(k) of the Securities Exchange
Act of 1934, that trading in the
securities of the above-listed company is
suspended for the period from 9:30 a.m.
EDT, April 8, 2016, through 11:59 p.m.
EDT, on April 21, 2016.
VerDate Sep<11>2014
17:18 Apr 11, 2016
Jkt 238001
21611
Pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934
(‘‘Act’’),1 and Rule 19b 4 thereunder,2
notice is hereby given that on March 24,
2016, Chicago Board Options Exchange,
Incorporated (the ‘‘Exchange’’ or
‘‘CBOE’’) filed with the Securities and
Exchange Commission (‘‘Commission’’)
the proposed rule change as described
in Items I, II, and III below, which Items
have been prepared by the Exchange.
The Commission is publishing this
notice to solicit comments on the
proposed rule change from interested
persons.
I. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Rule Change
The Exchange proposes to establish
fees for options that overlie a reduced
value of the FTSE 100 Index and the
FTSE China 50 Index. The text of the
proposed rule change is available on the
Exchange’s Web site (https://
www.cboe.com/AboutCBOE/
CBOELegalRegulatoryHome.aspx), at
the Exchange’s Office of the Secretary,
and at the Commission’s Public
Reference Room.
II. Self-Regulatory Organization’s
Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule
Change
In its filing with the Commission, the
Exchange included statements
concerning the purpose of and basis for
the proposed rule change and discussed
any comments it received on the
proposed rule change. The text of these
statements may be examined at the
places specified in Item IV below. The
Exchange has prepared summaries, set
1 15
2 17
PO 00000
U.S.C. 78s(b)(1).
CFR 240.19b–4.
Frm 00079
Fmt 4703
Sfmt 4703
1. Purpose
The Exchange proposes to amend its
Fees Schedule, effective March 29,
2016. Specifically, commencing March
29, 2016, the Exchange will list new
options on two FTSE Russell indexes.
More specifically, the Exchange
proposes to establish fees for options
that overlie a reduced value of the FTSE
100 Index (‘‘UKXM’’) and the China 50
Index ‘‘(FXTM’’).
By way of background, a specific set
of proprietary products are commonly
included or excluded from a variety of
programs, qualification calculations and
transaction fees. In lieu of listing out
these products in various sections of the
Fees Schedule, the Exchange uses the
term ‘‘Underlying Symbol List A’’ to
represent these products. Currently,
Underlying Symbol List A is defined in
Footnote 34 and represents the
following proprietary products: OEX,
XEO, RUT, RLG, RLV, RUI, SPX
(including SPXw), SPXpm, SRO, VIX,
VOLATILITY INDEXES and binary
options. The Exchange notes that the
reason the products in Underlying
Symbol List A are often collectively
included or excluded from certain
programs, qualification calculations and
transactions fees is because the
Exchange has expended considerable
resources developing and maintaining
its proprietary, exclusively-listed
products. Similar to the products
currently represented by ‘‘Underlying
Symbol List A,’’ UKXM and FXTM are
not listed on any other exchange. As
such, the Exchange proposes to exclude
or include UKXM and FXTM in the
same programs as the other products in
Underlying Symbol List A, as well as
add UKXM and FXTM to the definition
of Underlying Symbol List A in
Footnote 34. Specifically, like the other
products in Underlying Symbol List A,
the Exchange proposes to except UKXM
and FXTM from the Liquidity Provider
Sliding Scale, the Volume Incentive
Program (VIP), the Marketing Fee, the
Clearing Trading Permit Holder Fee Cap
(‘‘Fee Cap’’) and [sic] exemption from
fees for facilitation orders, and the
Order Router Subsidy (ORS) and
Complex Order Router Subsidy (CORS)
Programs. Like all other products in
Underlying Symbol List A (with the
exception of SROs), the Exchange
proposes to apply to UKXM and FXTM
E:\FR\FM\12APN1.SGM
12APN1
]]>Agencies
[Federal Register Volume 81, Number 70 (Tuesday, April 12, 2016)]
[Notices]
[Pages 21609-21611]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2016-08298]
[[Page 21609]]
=======================================================================
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Investment Company Act Release No. 32066; 812-14514]
T[uuml]rkiye Sinai Kalkinma Bankasi A.[Scedil].; Notice of
Application
April 6, 2016.
AGENCY: Securities and Exchange Commission (the ``Commission'').
ACTION: Notice of application for an order under section 6(c) of the
Investment Company Act of 1940 (``Act'') for an exemption from all
provisions of the Act.
-----------------------------------------------------------------------
SUMMARY:
Applicant: T[uuml]rkiye Sinai Kalkinma Bankasi A.[Scedil].
(``Applicant'').
Summary of Application: Applicant, a banking institution organized
as a public joint stock company of unlimited duration under the laws of
the Republic of Turkey (``Turkey'') requests an order exempting it from
all provisions of the Act in connection with the offer and sale of its
debt securities in the United States.
Filing Dates: The application was filed on July 14, 2015, and
amended on November 25, 2015 and March 14, 2016.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the Commission orders a hearing.
Interested persons may request a hearing by writing to the Commission's
Secretary and serving applicant with a copy of the request, personally
or by mail. Hearing requests should be received by the Commission by
5:30 p.m. on May 2, 2016, and should be accompanied by proof of service
on applicant, in the form of an affidavit or, for lawyers, a
certificate of service. Hearing requests should state the nature of the
writer's interest, the reason for the request, and the issues
contested. Persons who wish to be notified of a hearing may request
notification by writing to the Commission's Secretary.
ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F
Street NE., Washington, DC 20549-1090. Applicant, Meclis-i Mebusan
Caddesi No. 81 34427 F[inodot]nd[inodot]kl[inodot], Istanbul, Turkey.
FOR FURTHER INFORMATION CONTACT: Elizabeth G. Miller, Senior Counsel,
at (202) 551-8707, or Holly Hunter-Ceci, Branch Chief, at (202) 551-
6825 (Division of Investment Management, Chief Counsel's Office).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained via the
Commission's Web site by searching for the file number, or applicant
using the Company name box, at https://www.sec.gov/search/search.htm or
by calling (202) 551-8090.
Applicant's Representations
1. Applicant is a banking institution organized as a public joint
stock company of unlimited duration under the laws of Turkey. Applicant
was established on May 31, 1950 as a ``Development and Investment
Bank'' in accordance with Turkish Banking Law, No. 5411. As mandated by
Turkish law, Applicant's principal activity is promotion of Turkish
economic development through providing long-term funding for domestic
and international investment by Turkish companies, primarily through
loans denominated in foreign currencies. The Applicant's mandate as a
``Development and Investment Bank'' is to extend medium- to long-term
financing to business enterprises, to assist domestic and foreign
capital owners to finance the development of new businesses in Turkey,
and to contribute to improvements in Turkish capital markets. A
majority of Applicant's assets, together with its consolidated
financial subsidiaries (the ``Group''), currently consist of loans and
leasing receivables net of allowance for possible losses and a
securities portfolio (of which 91.7% constituted Turkish government
securities). Since such securities and loans could be considered
``investment securities'' within the meaning of section 3(a)(1)(C) of
the Act, Applicant may be considered an investment company, and it
requests an exemption from all provisions of the Act.
2. As a Turkish development and industrial bank, Applicant (i)
supports private sector, productive investments in the Turkish
industrial and service sectors; (ii) assists with the financing and
development of new businesses in Turkey; and (iii) contributes to the
improvement of Turkish capital markets. Applicant may engage, inter
alia, in the following activities in pursuit of its development banking
activities: (i) Provision of short-, medium- and long-term loan
financing against pledges, mortgages, or other security by way of open
credits; financing of existing and new industrial enterprises; (iii)
performance of capital market or money market transactions in Turkey
and abroad in cooperation with national or international institutions;
(iv) financial leasing transactions and other similar financial
transactions and issuance of guarantees; and (v) acceptance,
establishment, and termination of mortgages. Applicant is authorized to
engage in the following standard commercial and investment banking
activities: (i) ``Activities of banks (including participation banks,
saving banks, credit unions, etc.; except central banks and investment
banks)''; (ii) ``Investment banking activities''; (iii) ``Activities
for security incomes on own account (dividends, bank interest,
participation earnings, remuneration, etc.)''; (iv) ``Finance
leasing''; (v) ``Fund management activities bas[ed] on a fee or
contract basis (portfolio management, mutual fund management, pension
fund management, etc.)''; and (vi) ``Activities auxiliary to investment
banking (mergers and acquisitions activities, business financing and
venture capital financing activities, etc.).''
3. As of December 31, 2015, Applicant is privately controlled, with
50.3% of its shares held directly or indirectly by T[uuml]rkiye
[Idot][scedil] Bankas[inodot] A.[Scedil]. Group and 8.4% by
T[uuml]rkiye Vak[inodot]flar Bankas[inodot] T.A.O. As of the same date,
39.3% of Applicant's shares were publicly traded on the Borsa
[Idot]stanbul A.[Scedil]. (``BIST'') (of which 59.3% were held by
foreign investors), with the remaining shares owned by various other
institutional investors. A significant portion of the Group's
obligations is subject to a guarantee by the Turkish Treasury.
4. Applicant is subject to a regulatory regime substantially
equivalent to that of commercial banks in Turkey, including oversight
and supervision by the Turkish Banking Regulation and Supervision
Agency (the ``BRSA''), the Central Bank of Turkey (the ``Central
Bank''), the Capital Markets Board of Turkey, the BIST, the Turkish
Banks Association, and the Financial Crimes Investigation Board,
including a full range of banking, competition, antitrust, anti-money
laundering, sanctions and other laws and regulations designed to
maintain the safety and financial soundness of Turkish banks, ensure
their compliance with economic and other obligations, and limit their
exposure to risk. Applicant is subject to extensive oversight,
supervision, and regulation by the Turkish government on the same terms
as other large commercial banks, including in accordance with the Basel
III framework and international capital and liquidity standards. The
Turkish Treasury guarantees a significant portion of Applicant's long-
term funding from development financial institutions and appoints a
representative to Applicant's Board of Directors. Applicant's Board of
Directors and management have implemented comprehensive policies and
procedures governing Applicant's banking operations.
[[Page 21610]]
5. As described more fully in the application, while Applicant
performs many of the same functions as Turkish commercial banks and is
subject to extensive supervision and regulation by the Turkish
government, Applicant is prohibited from accepting deposits from the
public. The scope of Applicant's operations is more limited than that
of Turkish commercial banks owing to its specific objectives as a
development and investment bank.
6. Development financial institutions (``DFIs'') are Applicant's
primary source of funding; however, as DFI funding is typically
received in the form of ``tied loans'' limited to a specific purpose or
sector within Turkey, Applicant plans to offer and sell debt securities
to supplement its funding base. Accordingly, Applicant proposes to
issue and sell its debt securities in the United States from time to
time, including under its Global Medium Term Note Program. Applicant
intends to use the proceeds of any such sale of securities as an
additional source of funding for its general purposes and in connection
with its development and investment banking mandate. The proceeds of
any such sale of debt securities will be used by Applicant as an
additional source of funding for its general corporate purposes and in
connection with its development and investment banking mandate.
Specifically, Applicant intends to use any such debt security funding
to extend loans to public-private partnerships and other socially
responsible investment projects, including health, education, and
renewable energy projects, that are ineligible for DFI tied loan
funding.
Applicant's Legal Analysis
1. Section 3(a)(1)(C) of the Act defines an ``investment company''
to include any issuer engaged in the business of investing,
reinvesting, owning, holding or trading in securities, and that owns or
proposes to acquire investment securities having a value exceeding 40%
of the issuer's total assets. Section 3(a)(2) of the Act defines
``investment securities'' to include all securities except Government
securities, securities issued by employees' securities companies, and
securities issued by majority-owned subsidiaries of the owner which (a)
are not investment companies, and (b) are not relying on the exclusions
from the definition of investment company in section 3(c)(1) or 3(c)(7)
of the Act.
2. Applicant states that as of December 31, 2015, the Group had
total assets of TL21.4 billion, of which loans and leasing receivables
net of allowance for possible losses accounted for 63.8% and the
Group's securities portfolio for 18.0% (of which 91.7% constituted
Turkish government securities). Such loans and securities could be
construed as ``investment securities'' within the meaning of Section
3(a)(1)(C) of the Act, thus potentially rendering Applicant a prima
facie ``investment company.'' As a result, Applicant states that it
could be deemed to be an ``investment company'' under section
3(a)(1)(C) of the Act.
3. Section 6(c) of the Act provides, in relevant part, that the
Commission, by order upon application, may conditionally or
unconditionally exempt any person, security, or transaction from any
provision of the Act, if and to the extent necessary or appropriate in
the public interest and consistent with the protection of investors and
the purposes fairly intended by the policy and provisions of the Act.
4. Rule 3a-6 under the Act excludes foreign banks from the
definition of an investment company under the Act. A ``foreign bank''
is defined in the rule to include a banking institution ``engaged
substantially in commercial banking activity'' which in turn is defined
to include ``extending commercial and other types of credit, and
accepting demand and other types of deposits.'' Applicant represents
that it is the functional equivalent of a ``foreign bank'' insofar as
it (i) offers financial services and issues financial products similar
to those offered and issued by other Turkish commercial banks and (ii)
is subject to extensive oversight, supervision, and regulation as a
bank by the Turkish government. However, by Turkish law, Applicant is
prohibited from accepting deposits. Therefore, Applicant states that
there is uncertainty as to whether the Rule 3a-6 exemption would be
deemed to apply.
5. Applicant also believes that the rationale of Congress and the
Commission in promulgating rules under the Act in exempting foreign
financial institutions applies to Applicant. Applicant represents that
it is subject to extensive oversight, supervision and regulation by the
Turkish Government to an equivalent extent as applies to Turkish
commercial banks. Applicant further represents that it is subject to a
more direct form of government oversight and supervision than
commercial banks in Turkey owing to representation of the Turkish
Treasury on the Applicant's board of Directors and the Turkish
government's guarantee of certain of the Group's liabilities. Applicant
also represents that the Turkish government guarantees a significant
portion of the Group's obligation and the Turkish Treasury appoints a
representative to Applicant's Board of Directors. Accordingly,
Applicant represents that its operations do not lend themselves to the
abuses against which the Act is directed, and states that it believes
it satisfies the standards for relief under section 6(c) of the Act.
Applicant's Conditions
Applicant agrees that the order granting the requested relief will
be subject to the following conditions:
1. In connection with any offering by Applicant of its debt
securities in the United States, Applicant will appoint an agent in the
United States to accept service of process in any suit, action, or
proceeding brought with respect to such debt securities instituted in
any state or federal court in the Borough of Manhattan, The City of New
York, New York. Applicant will expressly submit to the jurisdiction of
New York State and U.S. federal courts sitting in the Borough of
Manhattan, The City of New York, New York, with respect to any such
suit, action, or proceeding. Applicant also will waive the defense of
forum non conveniens to the maintenance of any such action or
proceeding. Such appointment of an agent to accept service of process
and such consent to jurisdiction shall be irrevocable until all amounts
due and to become due in respect thereof have been paid. No such
submission to jurisdiction or appointment of agent for service of
process shall affect the right of a holder of any such security to
bring suit in any court which shall have jurisdiction over Applicant by
virtue of the offer and sale of such securities or otherwise.
2. Applicant undertakes to provide to any person to which it offers
its debt securities in the United States disclosure documents that are
at least so comprehensive in their description of Applicant and its
business as those which may be used by comparable U.S. issuers in
similar U.S. offerings of such securities and that contain the latest
available audited annual financial statements (and, if available,
reviewed interim financial statements) of the Group. Applicant further
undertakes to ensure that any underwriter or dealer through whom it
makes such offers will provide such disclosure documents to each person
to whom such offers are made prior to any sale of securities to such
offeree. Such documents will be updated promptly to reflect any
material change in the Group's financial status and shall be at least
as comprehensive as offering memoranda customarily used in similar
offerings in the United States. Any offering of Applicant's securities
in
[[Page 21611]]
the United States shall comply with applicable U.S. securities and
anti-fraud laws and regulations.
3. Applicant shall rely upon the order so long as (i) its
activities conform in all material respects to the activities described
in this Application and (ii) Applicant continues to be regulated by the
BRSA, the Central Bank, or other applicable Turkish regulatory
authorities as a development and investment bank as described in the
application.
For the Commission, by the Division of Investment Management,
pursuant to delegated authority.
Robert W. Errett,
Deputy Secretary.
[FR Doc. 2016-08298 Filed 4-11-16; 8:45 am]
BILLING CODE 8011-01-P
