Takasbank is incorporated as a non-deposit taking bank and authorized by the Capital Markets Board of Turkey to function as: the Clearing and Settlement Institution for Istanbul Stock Exchange (ISE) markets, the Clearing House for the Turkish Derivatives Exchange, the National Numbering Agency of Turkey and the Custodian for the Mutual Funds and Pension Funds incorporated in Turkey.

Takasbank, started as a department within the Istanbul Stock Exchange (ISE) in 1988, originally dealt with the provision of settlement services for securities traded by the members of the ISE. In January 1992, the operations of that department were transferred to an independent company, the ISE Settlement and Custody Co. Inc., which was set up under the shareholdership of the ISE and its members. This company was then transformed into a bank and renamed Takasbank (ISE Settlement and Custody Bank, Inc.) in 1996.

Takasbank is owned by the ISE (31.52%) and by the members of the ISE (19 banks and 69 brokerage houses with 34.48% and 34% stake in the share capital, respectively). According to the Articles of Association of Takasbank, no single shareholder can hold a share of more than 5 percent, except for the ISE.

The Board of Directors is composed of four representatives of the ISE, one representative from the Capital Markets Board, five representatives from the ISE members (banks and brokerage houses) and the President & CEO of Takasbank.

As Takasbank is the Central Clearing and Settlement Institution for ISE markets and the Clearing House for the Turkish Derivatives Exchange the Capital Markets Board (CMB), that is the regulatory and supervisory authority in charge of the securities markets in Turkey, regulates its functions and responsibilities. Rules relating to clearing and settlement are specified by the ISE in accordance with the general rules and regulations of the CMB.  Due to Takasbanks status as a bank, Takasbank is also regulated by the Banking Regulatory and Supervisory Board, and the Central Bank of Turkey.

The settlement cycle is T+2 for equities. International market transactions settle on T+3, and bonds and bills settle on T+0.

Participants are expected to fulfill their cash obligations by using their cash accounts with Takasbank from 9:00 to 16:00 for the ISE Equities Market settlements and until 16:30 for the ISE Bonds & Bills Market settlements. Participants can transfer cash from their other accounts within Takasbank, or from other banks using the Central Bank of Turkeys EFT system, TETS or using same day receivables from the ISE Equities Market, ISE Bonds and Bills Market or the Takasbank Money Market. 

ISE members have to fulfill their obligations within the deadlines (16:00 on T+2 for equities, 16:30 on T+0 for bonds & bills). If the obligations are fulfilled after the deadline but within the working hours of Central Banks National Payment System (EFT) on the settlement date, default payment calculations will be calculated on the prevailing market overnight interest rate (highest of the ISE Repo-Reverse Repo Market or the Central Bank of Turkey).

If the failure still exists on T+1 for bonds and bills and on T+3 for equities, the penalty payment is calculated as a triple of the prevailing market overnight interest rate applied throughout the failure period. Furthermore, Takasbank notifies ISE for buy-in or sell-out, indicating the due obligation (cash or securities) and the detailed list of securities and cash receivables under pledge at Takasbank.  The payment and securities obligations arising from the trade related with the buy-in or sell-out process are settled on the same day (T+1 for bonds and bills, T+3 for equities). If the receivables value under pledge is not sufficient to discharge the obligations as a whole, the members collateral with the ISE is used to fulfill the rest of the obligation.

There is a fund belonging to the ISE under the management of Takasbank that is used for the ease of settlement. This fund is made up of the fines collected from ISE members with late payments and deliveries to settlement.  This fund is activated every day providing the first liquidity to the settlement process, which is centrally carried out by Takasbank.  At the end of the settlement, if all the parties fulfill their obligations, this fund is released in full and remunerated in market terms via the Treasury Department of Takasbank. Otherwise, it is used to cover the failure of the buyer against the seller. The coverage is limited to the prevailing value of the fund. Therefore this fund is actually a temporary liquidity facility for the settlement process.

For the purpose of making the settlement process easier and more efficient for ISE members and to reduce default risk, fully collateralized cash and securities credit facilities are provided by Takasbank. 

Takasbanks Credits Department assigns credit lines for each of the below mentioned facilities to each ISE member according to their financials: 

·          Securities Lending and Borrowing Market

·          Takasbank Money Market

·          Securities Purchasing Loans (Cash Credits) 

Securities Lending and Borrowing Market

The securities lending borrowing facility turned into an organized market operated which improves the efficiency of securities settlement and, consequently, liquidity in the market. Takasbank operates the securities lending borrowing market and provides the trade matching services for the participants. Takasbank does not provide guarantee to counterparties but applies default procedures in case of a default.

Securities available for lending and borrowing are quoted as a bid-offer method and orders are entered to the system as multiples of 1 bp (%0.01). The allowed maturity can be set from overnight until 2 weeks. Stocks listed by the ISE and exchange-traded funds can be borrowed/lent at the market. The ISE members can operate at the market. Institutional investors can operate through an ISE member.

The transfer of the loaned security occurs over accounts held at the CSD. Upon matching of bid and offer orders, the security is debited from the members custody account at the CRA and transferred to the borrowers custody account with the CRA automatically.

Securities lending borrowing market transactions are fully collateralized. Haircuts are applied to each type of security taken as collateral. The collaterals are marked to market daily by Takasbank and margin call is made if the value of the collateral falls below the required collateral ratio.

ion date.