On 15.03.2018 Amendments to Enforcement and Bankruptcy Law has been introduced by Law No. 7101 and published in the Official Gazette. The most significant changes are as follows:
The recent volatility experienced in Turkish financial markets and in particular the devaluation of Turkish lira have brought many borrowers to the brink of default. This has prompted the Turkish authorities to take action. Accordingly, the Banking Regulatory and Supervision Authority in Turkey (the “BRSA”) has published a new set of restructuring rules, the Regulation on the Restructuring of Debts Owed to the Financial Sector (the “Restructuring Regulation”), which came into force on 15 August 2018.
The Turkish collateralization system was recently updated through the introduction of the Law No. 6750 on Movable Pledges (the “Movable PledgeLaw”).
Turkish corporates have increasingly utilised international debt markets in the last decade, particularly in the infrastructure and energy sectors. These corporates are now under pressure due to recent political instability and depreciation of the Turkish lira. Restructuring candidates in 2014 have included Yuksel, the construction company which was last in discussions with bondholders and local lenders mid-year. Below we take a look at key legal issues for loan traders in Turkey.
Recent development
Recent development
Seeking to ensure that the market has sufficient available liquidity following the recent political and economic developments in Turkey, the Central Bank of Turkey (the "Central Bank") reduced the Turkish banks' reserve requirements for Turkish lira liabilities on August 10, 2016. The changes will take effect on August 12, 2016.
New TRY reserve requirements
The Central Bank has reduced the reserve requirement ratios for banks' Turkish Lira ("TRY") liabilities by 50 basis points for each maturity bracket:
Maturity New Ratios Previous Ratios
Success stories point to the potential effectiveness of new legislation but significant timeframe concerns remain
The idea behind Ukraine’s new financial restructuring legislation was to implement the best global regulatory and taxation practices used to revive the banking business. A growing number of the restructuring success stories based on the new law are helping to demonstrate the viability of the relevant procedures.
On 01 November 2018, the President of Ukraine signed the Law "On Amendments to Certain Legal Acts of Ukraine on Resumption of Lending" (the “Law”) adopted by the Verkhovna Rada of Ukraine on 03 July 2018. The Law eliminates most of legislative gaps that existed in the loan and mortgage legal environment of Ukraine.
In this connection the Law introduced several significant changes that can be considered as rather positive for borrowers, inter alia, it:
У жовтні 2018 року Верховна Рада ухвалила Кодекс України з питань банкрутства («Кодекс») , який замінить чинний Закон України «Про відновлення платоспроможності боржника або визнання його банкрутом» («Закон»), що діяв у різних редакціях з 1992 року.
Кодекс набирає чинності через 6 місяців після його офіційного опублікування, що створює певний «перехідний» період, протягом якого можна встигнути ініціювати справу за чинним Законом, або чекати набрання чинності новим Кодексом та діяти відповідно до його положень.
Головною проблемою процедури банкрутства в Україні є її неефективність. Найкраще тому підтвердження – це статистика, яка вказує, що кредитор у середньому отримує лише 6-7% від розміру своїх грошових вимог, тобто лише 6-7 грн. зі 100 грн. боргу. Причина цьому очевидна: як правило, боржник потрапляє в процедуру банкрутства майже з «порожніми кишенями» та нульовим балансом, а кредиторам залишається шукати те, що залишилося, і ділити між собою.