Turkey to Clarify Capital Markets Law to Quell Concern, HT Says

Turkey plans to clarify what is considered criminal under legislation that provides for imprisonment for certain financial commentary, HaberTurk reported, citing Capital Markets’ Board Chairman Vahdettin Ertas.

Turkey’s Capital Markets Law, enacted Dec. 31, stipulates punishment for “those who provide untruthful, wrong or misleading information, start rumors, or provide news, commentary, or prepare reports with the intention of influencing prices, values of capital markets instruments or investor decisions.” Bank of America Merrill Lynch and Commerzbank AG said they were reviewing how the new law will affect their business in Turkey.

“We were planning to make secondary legislation concerning this article within six months but we may bring this forward,” Haberturk cited Ertas as saying. “As the result of these regulations, what is a crime and what is not will be clear.”

Commerzbank has called off analyst trips to Turkey “until the law has been clarified,” Tatha Ghose, a London-based economist at the bank, said in e-mailed comments yesterday. Arko Sen, a debt and currency strategist at Bank of America in London, said he’s asked the compliance team to review the law.

“Those who commit a crime will of course face punishment but there will be no situation that needs to cause fear and panic in the market,” Ertas also said.

Benoit Anne, head of emerging-markets strategy at Societe Generale in London, said by e-mail yesterday that the bank resumed its commentary on Turkey, because “the new law doesn’t affect normal research activities.”

International Criticism

International criticism of Turkey’s record on free expression intensified last year. The New York-based Committee to Protect Journalists said in an October report that Turkey has the most reporters imprisoned of any nation and that Prime Minister Recep Tayyip Erdogan was leading “one of the biggest crackdowns on press freedom in recent history.”

The European Commission expressed “serious concern” over the rising number of court cases related to freedom of expression, in a report published the same month.

To contact the reporter on this story: Selcuk Gokoluk in Istanbul at sgokoluk@bloomberg.net

To contact the editor responsible for this story: Alaa Shahine at asalha@bloomberg.net

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