ERDEM-NEWSLETTER-2018-metin

231 CAPITAL MARKETS LAW funding models 3 . Crowdfunding platforms, which operate through donation-based or reward-based models, commenced to be established in Turkey as of 2010. The legislator is silent with respect to which models of crowdfunding are adopted under the Capital Markets Law. This issue will be addressed in detail under the secondary legislation, which is presently under discussion. Innovations under the Omnibus Law It is the main intention of the legislator to create a free market for crowdfunding, while avoiding the pressure on the companies that are yet to be established. As per the Capital Markets Law, a crowdfund- ing platform is defined as the intermediary to crowdfunding, and is an entity serving on an electronic platform. Upon enactment of the Omnibus Law, which amends the Capital Markets Law, the respective enterprises will be obliged to obtain official authorizations from the Capital Market Board in order to operate. In other words, it is manda- tory for the crowdfunding platforms, the entities that intermediate or provide services in an electronic environment to obtain the permission of the Capital Markets Board to be established and to initiate activi- ties. However, the legislation is silent as to the transition period for existing crowdfunding platforms in Turkey. Pursuant to the Capital Markets Law, the fund-raising persons through crowdfunding platforms are excluded from the definitions of “ publicly held companies ” and “ issuer. ” As per the respective articles under the Capital Markets Law, even if the number of the shareholders of the fund-raising joint stock companies through crowdfunding from the public exceed five hundred shareholders, such companies will not be deemed to be publicly held. Such exclusion grants great support for the crowdfunding platforms, which, therefore, will not be required to comply with major amount of processes, such as the corporate gover- nance principles or the requirements of the public disclosure platform. As such, crowdfunding is free from the restrictions applicable to publicly held companies under the capital market legislation. In line with the above, it is further stated under the Capital Markets Law that the provisions under the law regarding the responsibilities to prepare a 3 Boran Demir.