Notification of Bearer Share Certificates to the Central Securities Depository: Bearer Share Registration System (HPKS) (or Bearer Shares Registry System)
Bearer Share Registration System (HPKS) is a new system in Turkey, dated back to 2021. Bearer stock certificates must be reported to the Central Securities Depository (MKK). This notification includes recording the shareholders and share transfers on an electronic platform called HPKS.
Penalty for Failing to Register with HPKS
If the notification is not made, an administrative fine is imposed for 2024. In particular:
- Failure to notify shareholders to the MKK results in a fine of 96,226 TRY.
Bearer Stock Certificate Issuance Process
In joint stock companies, the issuance of bearer stock certificates involves several legal and procedural steps. The first step is for the board of directors to adopt a resolution. Once this decision is taken, the company must notify the Central Securities Depository before proceeding with the share issuance. However, certain important checks must be completed beforehand.
Checking MERSIS Records
The first step is to check the company’s MERSIS (Central Registry System) records. It must be verified whether the shares are correctly registered as bearer. If the records are missing or incorrect, the Trade Registry Office must be contacted for corrections. Unless these errors are corrected, the MKK notification cannot be completed.
HPKS Registration Procedures
The notification process to the Central Securities Depository requires the registration of both the owners of the printed bearer stock certificates and any share transfers in the HPKS electronic system. HPKS ensures the secure storage of detailed information on both the certificates and their owners.
During this process, two separate Excel files prepared in advance must be uploaded to the system.
Shareholder Notification
The information to be registered includes details of both natural persons and legal entities.
- For individuals: Turkish ID Number or other identification details are entered.
- For legal entities: Tax Identification Number and similar details are provided.
Share Notification
This step covers entering detailed information about the share certificates into the system. The data includes the shareholder’s identity information, the number of shares, and their nominal value. A unique MKK reference number is created for each share certificate.
Board Resolution on Bearer Stock Certificate Issuance: Registration and Announcement
After the HPKS registration is completed, the board resolution must be submitted to the Trade Registry Office, since the decision must be registered and announced.
The Trade Registry Office requires confirmation that the MKK notification has been made before registration.
- If confirmed, the board resolution is registered and announced.
- If not, the resolution is rejected.
Once the registration and announcement are finalized, the printing of bearer stock certificates begins. At this stage, we provide draft designs of the bearer stock certificates to the company’s management. After approval, the certificates are printed and delivered to the company’s authorized representatives.
Need More Information?
Bearer Share Registration System (HPKS) is a bit complex for the first time users. If you still have questions about what this system or need help, feel free to contact us for more detailed information and professional assistance. With over 25 years of experience in Commercial Law and share certificates, we are here to support you.
