Within the scope of Borsa İstanbul A.Ş. Board of Directors’ decision dated 9/27/2019 and numbered 2019/182, and Capital Markets Board’s (CMB) decision dated 9/19/2019 and numbered 52; equities that are being traded in the Equity Market’s BIST Stars and BIST Main submarkets are rearranged into groups according to new criteria that suggests equities with similar magnitude, depth and liquidity trade in the same groups.

 Accordingly, by the effective date of the amendments in the Equity Market and Listing Directives, ABCD grouping regulation of the CMB regarding the equities that are being traded in the Equity Market will be abolished.

 With this new regulation, there will be two sub segments under BIST Stars and BIST Main market segments and trading principles that are stated in Appendix-1 will be put into effect.

 Within this framework new market structure in the Equity Market will be as follows:

• BIST Stars – Group 1, Group 2
• BIST Main – Group 1, Group 2
• Emerging Companies Market (ECM)
• Watchlist (WL)
• Pre-Market Trading Platform (PMTP)
• Structured Products and Funds Market (SPFM)
• Equity Market For Qualified Investors (EMFQI)

 Equities that are being traded in the Collective and Structured Products Market (equities of securities investment trusts, real estate investment companies and venture capital investment trusts) will be removed from this market segment, and will be placed in the related segment and the sub segment according to the new criteria. Collective and Structured Products Market will be renamed as Structured Products and Funds Market (SPFM).

 Moreover, minimum market cap (value) of the free float criteria for listing will increase from 100 Million TL to 150 Million TL for BIST Stars; and from 25 Million TL to 30 Million TL for BIST Main.

 The criteria, threshold values and the trading methods regarding the segregation of the equities into segments and sub segments are stated in Appendix-1. Distribution of the equities into segments and sub segments according to the evaluation made in the scope of the principles stated in the Appendix-1 are stated in Appendix-3.

 There are going to be some changes in the Equity Market practices as a result of new market structure, changes in the trading principles and abolition of ABCD grouping. Changes in the Equity Market practices will be included in the Equity Market Procedure in detail and it will be updated and announced before the effective date of the practices. Below points are considered essential for our members’ consideration to make their adjustments before the effective date of the practices. 

• ABCD grouping regulation will be abolished and the trading principles related with the new market structure will be effective instead of trading principles that come with ABCD regulation.
• There will be no change in the trading principles of the securities other than equities.
• Opening and closing call auctions are included in the call auction numbers stated in the trading principles table in Appendix-1. Current trading hours will keep being applied in the WL and PMTP, where 5 call auctions is signified. Trading hours of ECM is stated in Appendix-2 where there will be 10 call auctions.
• Market making can only be done voluntarily and only in BIST Main Group 1 and Group 2 equities. Current market making can be carried on voluntarily after 11/4/2019 in equities that are in BIST Main as per the table in Appendix-3.
• Market making and liquidity providing activities cannot be practiced in ECM as a result of single price method set as permanent in this market (ECM).
• Market making and liquidity providing can be practiced voluntarily in equities. These activities will not affect the trading method to be applied.
• There will be no change in the price margin of trade reports.
• There will be no change in the price margin for the preemptive rights.
• Current practice of T. İş Bankası A.Ş. (A), T. İş Bankası A.Ş. (B) and T. İş Bankası A.Ş. (preferred stock, promoters' stock) (ISATR, ISBTR, ISKUR) equities being traded with single price method will be preserved. Short selling and margin trading will not be applied, open clearing position/margin ratio will be 100%, and margin ratio will be 0% for these shares. Price margin for İş Bankası A.Ş. (preferred stock, ISKUR) shares will keep being applied as 50%.
• Formats of the reports that will be affected by the changes in trading principles (Daily Bulletin, Margin Information etc.) will be amended and amended reports will be put out for testing for our members to make their adjustments. Announcements regarding these tests will be made via https://connect.borsaistanbul.com.

 New market structure in the Equity Market, and the new trading principles set according to this new structure will be in effect as of 11/4/2019 with the amendments in Equity Market and Listing Directives.

 Kindly submitted for your information.

 Sincerely,

Mehmet GÖNEN
Acting CEO

Appendices:

1)      Evaluation criteria and trading principles to be applied with the new market structure in the Equity Market (2 pages)

2)      Trading hours to be applied in the ECM (1 page)

3)      Segment and sub segment distribution of equities for BIST Stars and BIST Main as of 11/4/2019 (1 page)