Introduction
In the modern financial ecosystem, compliance is no longer a box-ticking exercise — it is a strategic necessity. In Turkey, the Banking Regulation and Supervision Agency (BDDK), Capital Markets Board (SPK), Financial Crimes Investigation Board (MASAK), and other regulators require licensed institutions to implement robust and traceable compliance and supervision mechanisms.
This article provides a detailed guide on the compliance and supervision obligations applicable to banks, financial institutions, fintech companies, and publicly traded entities operating under Turkish law. It outlines the legal framework, reporting duties, internal control systems, and administrative liabilities of non-compliant behavior, while comparing local requirements with international best practices.
1️⃣ Legal Framework for Compliance in Turkey
Turkey’s compliance regime is governed by a set of interrelated laws and regulations, primarily:
- Banking Law No. 5411
- Capital Market Law No. 6362
- Law No. 5549 on the Prevention of Laundering Proceeds of Crime (MASAK Law)
- Turkish Commercial Code (TCC)
- Law No. 6698 on the Protection of Personal Data (KVKK)
These laws are supported by secondary legislation issued by relevant regulators such as BDDK, SPK, and MASAK. Financial institutions must also follow international standards such as Basel III, FATF, and OECD compliance guidelines.
2️⃣ Scope of Compliance Obligations
Compliance obligations vary by sector and activity type. However, the key compliance pillars include:
✅ A. Anti-Money Laundering (AML) & Counter-Terrorism Financing (CTF)
- Know Your Customer (KYC)
- Suspicious Transaction Reporting (STR)
- Transaction monitoring and customer risk scoring
✅ B. Regulatory Reporting
- Periodic financial reporting to BDDK/SPK
- Capital adequacy ratio (CAR) compliance
- Liquidity coverage ratio reports
- Insider trading and disclosure notifications
✅ C. Internal Control & Audit Mechanisms
- Compliance unit reporting directly to senior management
- Internal audit functions independent from operations
- Establishment of a Compliance Officer (CCO)
✅ D. Data Protection Compliance
- KVKK and GDPR alignment for financial data
- Data breach notification duties
- Consent management and deletion protocols
✅ E. ESG & Sustainability Reporting (for listed and large companies)
- Corporate governance disclosures
- Environmental risk reporting (required by SPK from 2024 onwards)
3️⃣ Internal Compliance Architecture
🧩 Organizational Structure:
Banks and regulated financial institutions are required to form a dedicated compliance department, reporting directly to the board or executive committee.
Key roles include:
- Chief Compliance Officer (CCO)
- AML Compliance Officer
- Internal Audit Unit
- Risk Management Committee
🏛 Legal Requirement:
Pursuant to Article 23 of the Regulation on Internal Systems and Internal Capital Adequacy Assessment, these units must be functionally and hierarchically independent.
4️⃣ Compliance Duties for Banks (BDDK Supervision)
Licensed banks in Turkey are under continuous supervision by the BDDK. Core obligations include:
📌 Daily and Monthly Reports:
- Balance sheet positions
- Foreign currency exposure
- Deposit and loan portfolio performance
- Large exposure limits (loan to a single borrower)
📌 Risk-Based Capital Management:
- Maintenance of Tier 1 capital ratios
- Compliance with Basel III standards
- Real-time stress testing and liquidity planning
📌 Internal Governance:
- Board-approved compliance policies
- Annual compliance audit reports
- Mandatory training on AML, ethics, and cyber risks
Failure to implement these obligations can result in administrative fines, license suspension, or public reprimands.
5️⃣ Capital Markets Compliance (SPK Obligations)
Capital market players such as investment firms, portfolio managers, and publicly traded companies must comply with SPK rules.
Key SPK Compliance Areas:
- Market Abuse Prevention (insider trading, manipulation)
- Disclosure Obligations (material events, quarterly results)
- Client Asset Segregation
- Conflict of Interest Management
Firms must establish an Investor Relations Department and a Compliance Committee, submit Corporate Governance Compliance Reports, and follow SPK’s Sustainability Principles.
6️⃣ MASAK Compliance – AML, KYC & STR Filing
Every financial and non-financial entity covered under Law No. 5549 must:
- Identify customers and beneficial owners
- Monitor and flag suspicious transactions
- File STRs (Suspicious Transaction Reports) with MASAK within 10 business days
- Keep transaction records for 8 years
MASAK also conducts on-site inspections and may issue compliance programs for high-risk sectors such as cryptocurrency, jewelry, and real estate.
7️⃣ Emerging Compliance Themes: FinTech, Digital Banks, and Crypto
With the rise of digital banks and crypto platforms, Turkish regulators have begun imposing:
- Digital onboarding standards (remote KYC via biometric ID)
- Real-time transaction monitoring via API integrations
- Crypto wallet verification and asset source tracing
- Cloud data hosting compliance under KVKK
BDDK’s Digital Banking Regulation (2022) requires tech-based financial firms to appoint a compliance officer and create a Business Continuity Plan (BCP) as part of licensing.
8️⃣ Supervision Tools and Methods
Regulatory Supervision in Turkey is carried out through:
| Tool | Description |
|---|---|
| On-site inspection | Full audits at bank or company premises |
| Off-site monitoring | Review of periodic reports submitted digitally |
| Thematic review | Targeted reviews (e.g. AML, cybersecurity) |
| Enforcement actions | Warning, fine, license suspension or revocation |
| Early intervention | Appointment of a trustee or management team in systemic cases |
The BDDK and SPK also coordinate with international regulatory bodies, conduct joint audits, and share intelligence through bilateral MOUs.
9️⃣ Consequences of Non-Compliance
Failure to fulfill compliance obligations may result in:
- Administrative fines (up to ₺100 million for systemic failures)
- Criminal complaints (especially in AML or investor fraud)
- Public blacklisting (e.g., being placed on MASAK’s watchlist)
- Reputational damage and market delisting
- Civil lawsuits by clients or investors
🔟 Compliance Culture and Future Trends
In response to growing regulatory pressure and market expectations, many Turkish financial institutions are investing in:
- RegTech tools (automated compliance software)
- Machine Learning for fraud detection
- ESG Reporting Platforms
- Compliance Hotlines and whistleblowing mechanisms
- Board-level compliance reviews
From 2024 onward, it is expected that Turkey will align more closely with EU ESG directives, digital compliance standards, and cross-border tax transparency frameworks such as CRS and FATCA.
✅ Conclusion
Compliance and supervision obligations in Turkey have evolved into a comprehensive ecosystem touching every aspect of financial operations — from onboarding clients to reporting transactions, from safeguarding data to combating market abuse.
For banks, investment firms, digital platforms, and even multinational corporates, regulatory compliance is no longer optional — it is a fiduciary responsibility and a business enabler.
Entities that adopt proactive, data-driven, and ethically robust compliance frameworks will not only avoid sanctions but also gain strategic credibility in both local and international markets.
INTERN LAW FACULTY STUDENT
YAĞMUR YORULMAZ
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