Lease Certificate Issuances Facilitated For Participation Banks

Recent Development

The Law No. 7159 Amending the Highway Traffic Law and Certain Other Laws (“Law“) was published and entered into force on December 28, 2018. The Law provides exceptions to certain restrictions relating to the lease certificate issuances under the Capital Markets Law No. 6362 (“Capital Markets Law“) facilitating lease certificate issuances by participation banks (also known as Turkish Islamic banks).

What’s New?

• Pursuant to Article 61 of the Capital Markets Law, until the redemption of the lease certificates, the rights and assets in the portfolio of the asset leasing company cannot be disposed of, provided as security, attached, included into bankruptcy estate or subject to a provisional injunction decision. Furthermore, in the event that the issuer cannot fulfill its obligations arising from the lease certificates when they become due; the issuer’s management or supervision is transferred to a public institution; its license is cancelled;