Global Tax Alert | 11 September 2014
Turkey enacts legislation regarding new E-money and payment services
Turkey recently promulgated its Code on Payment and Security Settlement Systems, Payment Services and Electronic Money Institutions numbered 6493 (the Code). The Code is the first step in setting forth the legal requirements of system operators, payment institutions and electronic money institutions in Turkey.
Legal entities who want to operate in these markets need to fulfil the designated requirements and then apply to the Central Bank of the Republic of Turkey (CBRT) or The Turkish Banking Regulation and Supervision Agency (BRSA) to obtain an operation permit. The companies still operating without a permit as of 27 June 2015 will be deemed as operating illegally and thus subject to penalties.
New legislative requirements
In line with the Code, the BRSA has taken a major step forward in regulating e-money and e-payment services.
The Code sets forth new requirements for companies that will operate as a system operator, payment institution or electronic money institution. Some of these requirements are summarized below:
- • Companies must be established as a joint-stock company, which means a conversion of entity type for some of the currently operating companies.
- • Companies may not operate in any other industry or business line.
- • Companies need to establish an internal control and risk management department and obtain external independent audit services.
- • Companies must fulfil the minimum paid in capital requirement (minimum paid in capital requirement is TRY 5 million for system operators and electronic money institutions and TRY 1 million or 2 million for payment institutions depending on the payment mediatory sector they operate in.) This requirement will bring a capital increase for some of the currently operating companies.
- • Companies also must meet the minimum total capital requirement which is calculated as a percentage of total payment volume.
- • Board of directors (BoD) of the companies are to be composed of at least three members including the general manager, who fulfil the necessary requirements (i.e., seniority requirement, criminal background check, education requirement, etc.)
- • Various necessary documents for the shareholders holding %10 or more shares of the company and also for the BoD members should be submitted.
Individuals and signature authorities (representatives) of legal persons who act as a system operator, payment institution or electronic money institution without having the required operation license pursuant to the Code shall be sentenced to imprisonment from one year to three years and judicial fine up to five thousand days of prison (converted into money at the date of sentencing).
Under the Code and the secondary legislation (three regulations have been issued since promulgation of the Code), payment institutions and e-money institutions must be licensed in order to operate in Turkey. An operation permit must be obtained from the BRSA during the one year period starting as of 27 June 2014 through 27 June 2015.
In order to get the operation license, it is necessary to submit detailed information to the BRSA and comply with strict rules set forth by the new regulations. There are also rules related to opening branch offices, outsourcing certain activities, internal audits, risk management, accounting, reporting and independent audits, establishing a corporate governance board and capital adequacy ratios for the companies operating in these sectors.
As the objective of the BRSA is to manage the finance sector and the new rules are strict, it is important that companies converting to this new status or setting up e-money and payment service operations are aware of the process and meet the new requirements by the designated date of 27 June 2015.
For additional information with respect to this Alert, please contact the following:
Kuzey Yeminli Mali Müşavirlik A.Ş., Istanbul
- • Ateş Konca
+90 212 368 53 26
- • Mehmet Küçükkaya
+90 212 368 57 24
- • Onur Elele
+90 212 368 52 29
- • Akif Tunç
+90 212 368 57 23
EYG no. CM4709