By way of background, in January 2019, the Capital Markets Board (“CMB”)
had issued an announcement on its website on the Draft Communiqué on Equity Crowdfunding[1]. The CMB
has now officially published the Communiqué on Crowdfunding No. III-35/A (“Communiqué”),
on October 3, 2019. The Communiqué entered into force as of October 3, 2019.

[1]http://www.mondaq.com/turkey/x/769986/Fund+Management+REITs/Capital+Markets+Board+Announces+The+Draft+Communiqu+On+Crowdfunding

The Communique appears to be in line with its draft, and addresses several
main topics such as, (i) crowdfunding platforms, (ii) activities of
crowdfunding platforms, (iii) subscription to crowdfunding platforms and the
campaign process and (iv) areas for the use of the funds and venture capital
firms.

The Communique requires crowdfunding platforms to apply to CMB for
listing and to comply with specific requirements. For instance, a crowdfunding
platform must be established as a joint stock company with a fully paid minimum
capital of TL 1,000,000 and must include “Crowdfunding Platform” in its trade
name. Per the Communiqué, crowdfunding platforms cannot carry out activities
other than crowdfunding, except for consultancy services to be provided to venture
capital firms. They are also required to establish a campaign website for each venture
capital firm or project and provide periodical updates for a period of 5 years,
in addition to instantaneous updates on the target and remaining amount of
funds to be collected, number of investors and the remaining period for each
project.

The Communiqué determines a maximum limit of TL 20,000 or 10% of the
investor’s declared yearly net income (which cannot exceed TL 100,000) for the
amount each investor may invest in a given project within one year, and the
maximum amount of funds project owners and venture capital firms may raise
through crowdfunding: this is limited to the issue threshold announced by the
CMB through its annual bulletin. The Communiqué also limits crowdfunding
platforms’ promotional activities, where crowdfunding platforms can only promote
completed projects and/or achieved venture capital firms within their advertisements
and other promotional activities.

As for the platforms located outside Turkey, the Communiqué excludes crowdfunding
activities participated by Turkish citizens through platforms which are located
outside of Turkey, and the accounts which are opened and operated abroad for
this purpose, on the condition that no promotional or marketing activity has
been carried out for these crowdfunding activities in Turkey, in a manner that
targets residents in Turkey. For the purposes of this exclusion, establishing a
workplace in Turkey by foreign platforms, establishing a Turkish website,
directly or indirectly, through persons or institutions resident in Turkey,
promoting crowdfunding activities will be deemed as “activities that target
residents in Turkey” and will fall under the scope of the Communiqué.