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The Communique on Crowdfunding numbered III-35/A.2 regulating the procedures and principles regarding share and borrowing-based crowdfunding was published in the Official Gazette numbered 31641 dated 27.10.2021, and has since come into force.

Once share-based crowdfunding began to operate under the revisited framework of regulations brought by the Capital Markets Law, it was necessary that the procedures and principles regarding debt-based crowdfunding were also determined. The Communique on Share Based Crowdfunding numbered III-35/A.1 has been repealed and restructured in the form of the Communique on Crowdfunding numbered III-35/A.2 so as to address the forthcoming market needs.

The Communique on Crowdfunding numbered III-35/A.2;

  • Revisited the definition of an “Entrepreneur” and “Venture Capital Company”. The definition of an entrepreneur has been extended, so as to include legal entities in the form of limited or joint stock companies as well as persons residing in Turkey that seek funding for their projects through share and/or debt-based crowdfunding. Moreover, limited companies may be regarded as venture companies, provided that they turn into joint stock companies before their funds are collected and transferred to a blocked account opened through a trustee.
  • Introduced the definition of a funded company. This refers to a venture company that is transferred a blocked fund amount from either a joint stock company established by entrepreneurs or a trustee’s account.
  • Introduced the conditions for the establishment of such platforms. Conditions that must be met include being a joint stock company, having a minimum capital amount of 1.000.000 Turkish Liras that has been paid in cash and having a minimum of 3 members that form the board of directors.
  • Gave platforms the opportunity to create more than one investment committee. Additional experience and licensing mandates were introduced for Investment Committee members that run debt-based crowdfunding.
  • Mandated that, platforms that carry out debt-based crowdfunding activities establish an effective and transparent credit rating system and policy in order to evaluate the risk situation of venture companies. Entrepreneurs that raise funds through debt-based crowdfunding have been obligated to prepare a credibility report that will be evaluated by investment committees. The platform, on the other hand, is obligated to calculate the credit score for the project.
  • Increased the investment threshold for real persons who are not qualified investors. Real persons who are not qualified investors will now be able to invest a maximum of 50.000 Turkish Liras in a calendar year through share-based crowdfunding. However, this threshold can only be applied to 10% of the investor’s declared annual net income, provided that it does not exceed 200.000 Turkish Liras.
  • Allowed the option to give the funded company’s share instead of cash considerations or to fulfill corresponding obligations as stated in the information form, in debt-based crowdfunding.
  • A venture company or an entrepreneur may run a maximum of two campaigns in any twelve-month period to raise funds through either share-based or debt-based funding. The same venture company or entrepreneur is prohibited from initiating a new crowdfunding campaign based on share or debt, before the completion of a share-based crowdfunding campaign. However, it is possible to initiate a debt-based campaign for a continuing share-based funding. This exemption can be applied vice-versa, meaning that a share-based funding can be initiated where the initial funding campaign is debt-based. In the event that either campaign is unable to yield the necessary funding, both campaigns will be required to come to an end.
  • Finally, crowdfunding platforms that had already been listed by the Capital Markets Board as of the effective date of the new Communique will be included in the list of platforms that are raising funds through share-based crowdfunding announced by the Capital Markets Board under the scope of the new Communique. Crowdfunding campaigns that commenced before the effective date of the new Communique will continue to be governed by the Communique on Share Based Crowdfunding numbered III-35/A.1.