Emerging Markets Rates and Currencies Handbook

Resident company may use the intermediation of a resident bank to execute deals with non-resident bank for FX derivatives transactions. Resident company should have an intermediation agreement with resident bank. It should have a master agreement with non- resident bank. There should be a service agreement between resident and non-resident bank regarding intermediation (transmission of order). Resident bank should have a license for Transmission of Order. Resident entities are not permitted to conduct leveraged transactions (as defined under Communique regarding Investment Services (III-37.1)) through an offshore entity. Resident banks reports daily all the derivative transaction to Central Repository Agency on behalf of resident companies. If resident companies execute derivative deals with a non-resident entity, companies might have the obligation for reporting. They should check the regulation with their advisors. Resident Restrictions: Taxation There is a specific Banking and Insurance Transactions Tax (aka. Foreign Exchange Tax / “Kambiyo Gider Vergisi”) for spot FX purchases of corporates, at a rate of 0.2%. There are exemptions set out in the regulations for companies who have an Industry Registration Certificate or who have a membership to Exporters' Association. There are also other exemptions for specific cases. For details please contact Citi TR Markets team. Requirements to open a foreign currency account There is no additional specific requirement to open a foreign currency account when compared to local currency account requirement. But Turkish residents cannot utilize FX loans except in certain cases. Deal Management Rollover: Yes with FX swaps but with prevailing market levels. Unwinding: Yes; with the reverse deal (opposite direction of the Documentation Requirements Corporates should open current accounts in each currency they want to trade in order to execute FX deals with Citibank Turkiye. No local law documentation requirements for spot dealing. Citi may require an agreement to be signed by some clients as per its internal risk procedures. For all other deal types regulated by Capital Markets Board, all clients need to sign master agreement before dealing. Local company should receive LEI number for FX derivative reporting purposes. Reporting is done by local bank on behalf of local corporates. Following deals, companies have to sign instructions and later they need to sign confirmation for derivative deals, (Regulatory Name: Deal Transaction Instruction & Summary Form). Companies can confirm FX spot, FX forward and FX swap deals via MT messages instead of signing the Instruction & summary form. Companies must sign a separate short agreement to confirm messages via MT Messages. Trade Flows Residents in Turkiye and Non-residents may freely keep foreign exchange; purchase foreign exchange from and sell foreign exchange to banks. Documents are required depending on the type of transfers and banks shall inform Central Bank of Turkiye about foreign exchange transfers abroad (including transfers made from foreign exchange deposit accounts), excluding payments for exports, imports and invisible transactions that are above USD50.000, — or its equivalent in another foreign currency within a 30-days period starting from the date of transfer. Foreign investors are not subject to any restriction regarding FX and there are no restrictions on cash accounts or cash movements for foreign investors and domestic investors. Capital Flow and FDI Documentation is required when there is a direct capital investment (or capital increase). There is a detailed regulation on the requirements. Investors can freely fund trades and repatriate funds through multiple banks. Deadlines may differ for each bank. Investors can FX clean cash. Additional Comments CCS and IRS are not offered out of Citi Turkiye. It is not very possible to make a distinction between onshore and offshore volume. original deal) executed with same tenor of the original transaction. Early Maturity: Clients can use FX Swaps to bring maturity date closer. Citibank A.S. Tekfen Tower, Eski Buyukdere Caddesi, Kat 2-3-4, 34394 Levent, Istanbul FX Sales Contact: +90 212 319 4909 / 4910