Introduction
Public disclosure obligations in Turkish capital markets are one of the most important pillars of investor protection, market transparency and fair price formation. In capital markets, investors make decisions based on information disclosed by issuers, public companies, investment funds, intermediary institutions and regulatory authorities. If information is inaccurate, delayed, incomplete or selectively disclosed to only certain investors, the market cannot function fairly.
The Turkish capital market disclosure regime is mainly based on Capital Markets Law No. 6362, the secondary legislation of the Capital Markets Board of Türkiye, known as the CMB in English and SPK in Turkish, and the electronic disclosure infrastructure known as the Public Disclosure Platform, or KAP. The CMB’s official communiqué list includes the Communiqué on Prospectus and Issue Document, the Communiqué on Principles of Financial Reporting in Capital Markets, the Communiqué on Corporate Governance and the Communiqué on Material Events Disclosure, all of which are central to public disclosure compliance.
Public disclosure is not merely a procedural duty. It is the legal mechanism that allows investors to access correct, timely, fair and complete information. It also protects issuers and directors by creating an official channel for market communication. A company that manages disclosure properly can reduce regulatory risk, investor claims and reputational harm. A company that treats disclosure as a formality may face CMB sanctions, civil liability, criminal exposure in serious cases and loss of investor confidence.
Purpose of Public Disclosure in Turkish Capital Markets
The purpose of public disclosure is to remove information asymmetry between insiders and investors. Public companies, directors, controlling shareholders and managers naturally possess more information than ordinary market participants. Without strict disclosure rules, insiders could use private information for their own benefit, while investors would trade on incomplete or misleading information.
Public disclosure obligations serve several functions. They allow investors to evaluate securities, protect fair price formation, prevent selective disclosure, reduce market rumors, support corporate governance and help regulators monitor capital market activity. They also strengthen market integrity by ensuring that material developments are disclosed through official channels rather than informal networks, media leaks or social media rumors.
The disclosure regime is particularly important in listed companies because share prices may react immediately to new information. A delayed disclosure of financial distress, major litigation, a merger, a capital increase or a regulatory sanction may cause investors to buy or sell securities at distorted prices. For this reason, Turkish capital market law treats disclosure not as a public relations function, but as a legal duty.
Public Disclosure Platform: KAP
The Public Disclosure Platform, known as KAP, is the central electronic disclosure system in Turkish capital markets. KAP is an electronic system through which electronically signed notifications required by capital markets and Borsa İstanbul regulations are publicly disclosed. All information and documents required to be publicly disclosed must be sent to KAP within the framework of the relevant CMB rules.
KAP is operated and managed by Merkezi Kayıt Kuruluşu A.Ş. Public Disclosure Services on a 7/24 basis. The system is designed to allow everyone to access correct, timely, fair and complete information about Borsa İstanbul companies through the internet simultaneously and at low cost. KAP also functions as an electronic archive, allowing investors and other market participants to access historical disclosures.
This means that public companies should not use informal methods as substitutes for KAP disclosures. Press releases, interviews, social media posts, investor calls or analyst meetings may be useful communication tools, but they cannot replace official disclosure where capital market rules require a KAP notification. If information is material, the safe and legally correct route is disclosure through KAP.
Who Must Make Public Disclosures?
Public disclosure obligations primarily apply to issuers, public companies, listed companies, investment funds, exchange-traded funds, portfolio management companies, investment firms and other market participants subject to CMB and Borsa İstanbul rules. KAP states that Borsa İstanbul companies must disclose financial statements, material events and other events required under CMB and Borsa İstanbul regulations through KAP.
The scope of disclosure depends on the nature of the entity and instrument. A listed company has continuous disclosure obligations. A company conducting a public offering must prepare a prospectus or issue document. An investment fund must publish fund-related reports and information. An issuer of debt securities may need to disclose payment, redemption, default or restructuring information. A public company subject to corporate governance rules may need to disclose related-party transactions, dividend decisions, board changes and general assembly information.
The central principle is that if information may affect the value or price of capital market instruments or investors’ investment decisions, it may fall within the disclosure framework.
Material Event Disclosure
Material event disclosure is one of the most important disclosure duties in Turkish capital markets. The CMB’s English text of the Material Events Disclosure Communiqué defines material events as insider and permanent information that may affect the value or price of capital market instruments or investors’ investment decisions. The same communiqué provides that the listed events are not exhaustive and that all kinds of information that may affect the value or price of shares or investors’ decisions must be disclosed.
Material event disclosure may be required for many developments, including mergers, acquisitions, demergers, capital increases, dividend decisions, share buybacks, significant litigation, regulatory investigations, public tender results, major contracts, loss of important customers, debt restructuring, financial deterioration, production interruptions, cyber incidents, management changes, related-party transactions and unusual circumstances affecting operations.
The test is not whether management personally considers the event important from an internal business perspective. The test is whether the information may affect investment decisions or the value or price of capital market instruments. Therefore, legal, financial and investor relations teams must analyze materiality carefully.
Accuracy, Clarity and Completeness of Disclosures
Public disclosures must be accurate, clear, balanced and complete. The Material Events Disclosure Communiqué states that disclosures should not be wrong, misleading, unfounded, exaggerated or incomplete, and should not create a wrong impression in investors’ minds regarding the issuer’s existing conditions. It also states that issuers cannot use material event disclosures for marketing and advertisement of their business operations.
This rule is extremely important. A disclosure may be legally problematic even if it contains some correct information. For example, a company may disclose a new contract but omit that the contract is conditional, disputed or subject to regulatory approval. It may announce a capital increase but fail to explain dilution effects. It may disclose a positive development while concealing a related risk. Such partial disclosure may create a misleading impression.
A public disclosure should therefore be drafted like a legal document, not a promotional announcement. It should be factual, specific, balanced and understandable. Statements such as “this transaction will definitely increase shareholder value” or “there is no risk” should be avoided unless fully supported and legally appropriate.
Timeliness of Public Disclosure
Timeliness is a core element of disclosure. Material information must generally be disclosed promptly once the obligation arises. KAP explains that material events or changes in previously disclosed material events must be publicly disclosed immediately upon occurrence or upon becoming known.
Delay may be allowed only in limited circumstances and under applicable rules, especially where immediate disclosure may harm legitimate interests and confidentiality can be preserved. However, disclosure delay is not a tool for hiding bad news or managing share price. If information leaks, rumors spread or confidentiality can no longer be maintained, prompt disclosure may become necessary.
Companies should have an internal escalation system. Business units, finance, legal, investor relations and senior management must know which developments may require immediate disclosure. Without such a system, material information may remain within departments while the market trades without knowing it.
Confidentiality Before Disclosure
Confidentiality is critical before a material event is disclosed. The Material Events Disclosure Communiqué provides that persons having information about material events required to be disclosed must keep such information strictly confidential until public disclosure is made.
This rule helps prevent insider trading and selective disclosure. If directors, employees, advisors, auditors, lawyers, consultants or controlling shareholders know material non-public information, they must not share it with unauthorized persons or trade based on it. Internal access should be limited to those who need to know. Companies should maintain insider lists, confidentiality agreements and blackout periods where appropriate.
A failure to preserve confidentiality may lead to serious consequences. If information leaks before disclosure and certain persons trade based on that information, the matter may become an insider trading investigation. If the company delays disclosure despite loss of confidentiality, the issuer and directors may face regulatory scrutiny.
Financial Reporting Obligations
Financial reporting is another major public disclosure obligation. KAP explains that financial reports consist of financial statements, board of directors’ operating review reports and representation letters. It also states that financial statements include the statement of financial position, comprehensive income statement, cash flow statement, statement of changes in equity and notes to the financial statements.
Financial reports allow investors to evaluate profitability, assets, liabilities, cash flow, leverage, liquidity and business performance. Inaccurate financial reporting may distort market prices and investor decisions. Therefore, financial reports are not merely accounting documents; they are legal disclosure documents.
The CMB’s communiqué list includes the Communiqué on Principles of Financial Reporting in Capital Markets II-14.1, published on 13 June 2013, as one of the main public disclosure regulations. Public companies should ensure that financial statements are prepared under applicable standards, reviewed by competent teams and approved through proper corporate procedures.
Prospectus and Issue Document Disclosures
Public disclosure obligations also arise before public offerings. In public offerings, the prospectus is the central disclosure document. It provides investors with information about the issuer, securities, risk factors, financial condition, management, shareholding structure, litigation, related-party transactions, use of proceeds and rights attached to the instruments.
The CMB’s communiqué list identifies the Communiqué on Prospectus and Issue Document II-5.1 as a core regulation for capital market offerings. A prospectus must not be drafted as a sales brochure. It should disclose both opportunities and risks. If it contains false, misleading or incomplete information, issuer liability and director liability may arise.
Issue documents are also important for non-public issuances. Even when securities are not offered to the public, capital market rules may require an approved issue document depending on the instrument and transaction structure. Therefore, issuers should analyze disclosure obligations before any offering, private placement or qualified investor sale.
Liability for Public Disclosure Documents
Capital Markets Law No. 6362 contains a specific liability regime for public disclosure documents. Article 32 provides that persons responsible under Article 10, persons who sign public disclosure documents and legal entities on behalf of which such documents are signed are jointly liable for damages arising from inaccurate, misleading or incomplete information contained in documents such as prospectuses, takeover bid information forms, material event disclosures, merger and demerger announcement texts, exchange admission disclosures and financial reports.
Article 32 also states that independent audit, rating and appraisal firms that prepare reports included in or used as the basis for public disclosure documents are responsible under the law. It further provides that persons who prove that they were not informed of the inaccurate, misleading or incomplete information, and that this lack of knowledge did not arise from intent or gross negligence, are not responsible.
This framework makes disclosure liability a serious risk for issuers, directors, signatories, auditors, rating firms and valuation experts. A defective disclosure may trigger compensation claims from investors, especially where the disclosure affected trading decisions.
Director and Management Responsibility
Directors and senior managers of public companies must actively supervise disclosure compliance. They should not sign or approve disclosures mechanically. A director who approves financial reports, prospectuses, material event disclosures or merger documents without adequate review may face liability if the document is materially false, misleading or incomplete.
Good governance requires that directors ask questions. Is the information accurate? Are material risks disclosed? Have legal disputes been reviewed? Are financial statements consistent with audit findings? Are related-party transactions explained? Is the disclosure balanced? Has legal counsel reviewed the announcement? Are there any facts that may make the disclosure misleading?
Directors should also ensure that the company has a written disclosure policy, investor relations system, internal reporting mechanism and document retention procedure. If a dispute arises, board minutes, internal memos, audit committee reports, legal opinions and management confirmations may become important evidence.
Disclosure of Forward-Looking Statements
Forward-looking statements are legally sensitive. Public companies may disclose expectations about future revenue, profitability, investment projects, production capacity, financing, market share or strategic plans. Such statements may influence investor decisions and share prices.
The Material Events Disclosure Communiqué addresses forward-looking statements as part of information policies. It requires companies to determine principles concerning such statements.
Forward-looking statements should be based on reasonable assumptions, clearly identify uncertainty and avoid guaranteed language. Companies should not present projections as certain results. If circumstances materially change, previously disclosed expectations may need to be updated. A failure to update or correct unrealistic projections may create liability.
Rumors, Media Reports and Internet Publications
Public companies must also monitor rumors, press reports and internet publications concerning the company. A rumor may affect market prices even before an official disclosure. The company may need to clarify whether the information is correct, incorrect or already publicly disclosed.
This is particularly important in the digital age. Social media posts, investor forums, Telegram groups, WhatsApp messages and online news may rapidly influence investor behavior. If a material rumor spreads and the company remains silent despite knowing the truth, market uncertainty may increase.
A company should have a rumor response policy. Investor relations and legal teams should monitor market-sensitive information and prepare appropriate KAP disclosures where required. However, not every rumor requires a response. The legal question is whether the rumor concerns material information and whether clarification is necessary to protect fair disclosure.
Disclosure and Market Abuse Prevention
Public disclosure obligations are directly connected with market abuse prevention. False or misleading information can create information-based market manipulation. Delayed disclosure can create insider trading risk. Selective disclosure can unfairly benefit certain investors.
The CMB has stated that Capital Markets Law No. 6362 introduced a stronger framework to financial markets with the aim of strengthening investor protection, and that information-based market manipulation is penalized under Article 107/2.
For this reason, disclosure compliance should be integrated with insider trading and market abuse policies. Public companies should prevent unauthorized leaks, insider trading before announcements, misleading investor presentations and overly promotional KAP disclosures. Brokerage firms and investment institutions should also monitor suspicious transactions occurring before material disclosures.
Website Publication and Archiving
KAP disclosure is central, but issuers may also have website publication obligations. The Material Events Disclosure Communiqué states that, no later than the business day immediately following public disclosure, issuers are obliged to publish their material event disclosures on the website shown in their general issuer information published in PDP and keep such disclosures there for five years. This obligation may be satisfied by linking to the disclosures published in PDP.
This website obligation improves accessibility and transparency. Investors should be able to find company disclosures not only on KAP but also through the issuer’s own digital communication channels. Companies should ensure that websites are updated, links work properly and historical disclosures remain accessible.
Cross-Border Disclosure Issues
Some Turkish issuers may have securities traded on foreign exchanges or may disclose information to foreign regulators. The Material Events Disclosure Communiqué states that if an issuer whose securities are also traded on foreign exchanges makes disclosures to the relevant foreign exchanges on matters outside the communiqué’s scope, it must repeat the same disclosure in accordance with the communiqué.
This rule prevents foreign investors from receiving information earlier than Turkish investors or vice versa. Equal access to information is essential in cross-border markets. Companies with international listings, foreign debt securities or global investor bases should coordinate disclosure timing carefully.
Public Disclosure in Mergers, Demergers and Takeover Bids
Corporate transactions such as mergers, demergers, takeover bids and significant asset transfers create special disclosure obligations. Article 32 expressly identifies takeover bid information forms, merger and demerger announcement texts and exchange admission disclosures among public disclosure documents that may create liability if they contain inaccurate, misleading or incomplete information.
These transactions are highly sensitive because they may change control, asset structure, shareholder rights or valuation. Investors must understand transaction terms, exchange ratios, appraisal reports, risks, approvals and expected effects. Misleading disclosure in such transactions may cause substantial investor harm.
Directors should obtain legal, financial and valuation advice before approving corporate transaction disclosures. Independent reports should be carefully reviewed, and any conflicts of interest should be disclosed.
Disclosure of Related-Party Transactions
Related-party transactions are a major corporate governance and disclosure issue. They may involve transactions between the public company and controlling shareholders, group companies, directors, executives or entities connected to them. Such transactions may be legitimate, but they can also be used to transfer value away from the public company.
Public companies should assess whether related-party transactions require board approval, independent director review, valuation reports, general assembly approval or KAP disclosure. The exact requirements depend on CMB corporate governance rules and transaction characteristics.
Disclosure should explain the parties, relationship, transaction value, commercial rationale and fairness. Concealing related-party nature or presenting the transaction as an ordinary arm’s-length transaction when it is not may create liability.
Public Disclosure and Corporate Governance
Disclosure and corporate governance are closely connected. Transparent disclosure allows shareholders to monitor management. Strong governance ensures that disclosures are accurate and timely. Weak governance often leads to poor disclosure, related-party abuse, selective communication and investor distrust.
The CMB’s communiqué list includes the Communiqué on Corporate Governance II-17.1, which is one of the core regulations for public companies and issuers.
Public companies should therefore treat disclosure as a governance function. The board, audit committee, corporate governance committee, investor relations unit, legal department and finance team should work together. Disclosure should not depend on one person’s discretion.
Administrative Sanctions and CMB Supervision
The CMB may request issuers and relevant parties to make public disclosures when necessary to ensure that the public is informed timely, accurately and completely. The Material Events Disclosure Communiqué also gives the Board authority to request disclosure through press and media, including electronic environments, where necessary.
If issuers fail to comply with disclosure obligations, the CMB may impose administrative sanctions, require corrective disclosures, initiate investigations or take other measures under capital market legislation. In serious cases involving false information, manipulation, insider trading or fraud, criminal consequences may also arise.
CMB supervision is not only punitive. It also helps maintain market order. By requiring accurate and timely disclosures, the CMB protects investors and promotes reliable market functioning.
Investor Claims Based on Defective Disclosure
Investors may bring compensation claims if they suffer loss due to inaccurate, misleading or incomplete public disclosure documents. Article 32 of Capital Markets Law No. 6362 provides a specific legal basis for such claims and establishes liability for responsible persons and signatories.
In practice, an investor claim may arise after a company corrects financial statements, discloses previously hidden debt, announces litigation that should have been disclosed earlier, revises a misleading projection or reveals that a public offering prospectus omitted material risks.
Evidence is critical. Investors should preserve transaction records, account statements, KAP disclosures, prospectuses, financial reports, corrected disclosures and price data. The claim should identify the defective disclosure, the date of investment, the date truthful information emerged, damage and causation.
Practical Compliance Checklist for Issuers
Issuers should establish a comprehensive disclosure compliance program. This program should include:
A written disclosure policy.
A material event escalation procedure.
A KAP notification workflow.
A financial reporting calendar.
A rumor monitoring policy.
A forward-looking statement policy.
An insider information confidentiality system.
A website publication and archiving procedure.
A related-party transaction review mechanism.
A board and management approval checklist.
A legal review process for public announcements.
Issuers should also train directors, executives, finance teams and investor relations personnel. Many disclosure failures occur because employees do not recognize that a development may be material.
Practical Advice for Directors
Directors should understand that disclosure liability is personal as well as corporate. They should review key disclosures carefully, ask questions, request additional information when necessary and ensure that objections are recorded in minutes where appropriate.
Before approving a prospectus, financial report or material event disclosure, directors should ask whether the document is accurate, complete, balanced and understandable. They should also ask whether any information has been omitted that could change an investor’s decision.
Directors should not rely blindly on management. They may rely on experts in appropriate cases, but only if reliance is reasonable and there are no obvious red flags.
Practical Advice for Investors
Investors should rely primarily on KAP disclosures, financial reports, prospectuses and official company announcements. KAP is designed to provide correct, timely, fair and complete information to all investors simultaneously.
Investors should be cautious about market rumors, social media claims and unofficial investment groups. If a statement is not supported by KAP disclosure, it should be treated carefully. Investors should also review risk factors, financial notes, related-party disclosures and material event updates before making significant investment decisions.
If an investor suffers loss due to suspected defective disclosure, evidence should be preserved immediately and legal advice should be obtained quickly.
Conclusion
Public disclosure obligations in Turkish capital markets are the legal foundation of transparency, investor protection and fair price formation. The Turkish system is built around Capital Markets Law No. 6362, CMB communiqués and KAP, which serves as the central electronic disclosure infrastructure for capital market information.
Public companies and issuers must disclose material events, financial reports, prospectuses, corporate transaction documents, related-party transactions and other required information accurately, timely and completely. KAP ensures that investors can access official disclosures simultaneously and at low cost.
The liability regime is strict. Article 32 of Capital Markets Law No. 6362 provides that signatories and relevant legal entities may be jointly liable for damages arising from inaccurate, misleading or incomplete public disclosure documents, including prospectuses, material event disclosures and financial reports.
For issuers, disclosure compliance is a continuous legal obligation. For directors, it is a core governance responsibility. For investors, it is the primary source of reliable market information. In conclusion, any issuer, public company, director, investor or intermediary institution dealing with Turkish capital markets should treat public disclosure not as a formality, but as the central legal mechanism that protects trust in the market.
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