NEWSLETTER-2017

229 CAPITAL MARKETS LAW Flexibility under the Draft Law With the Draft Law, it is the intention of the legislator to cre- ate a free market for crowdfunding, while avoiding the pressure over the companies to be established. Pursuant to Article 1 of the Draft Law, the fund-raising persons through crowdfunding platforms are excluded from the definitions of the “ publicly held companies ” and “ issuer ” as stated under the Capital Market Law 6 . As per Article 3 of the respective Draft Law, even if the number of the shareholders of the fund-raising joint stock companies through crowdfunding from the public exceed five hundred shareholders, such companies will not be deemed to be publicly held. As such, crowdfunding is free from the restrictions applicable to publicly held companies under the capital market legislation. In line with the above, it is stated under Article 2 of the Draft Law that the provisions under the Capital Market Law regarding the responsibilities to prepare a prospectus or export docu- ment would not be applicable to crowdfunding. Within the context of the Draft Law, crowdfunding platforms, the crowdfunding, and any other related transactions would not be con- sidered as investment services and activities or ancillary services to be conducted by the investment companies and portfolio management companies regulated under the Capital Market Law. Likewise, crowd- funding would not be subject to the provisions of the stock exchanges, market operators, other organized markets, and the legislation appli- cable thereto. The Draft Law does not regulate the provisions applicable to the relationship between the crowdfunding platforms and the persons collecting monies from the public through crowdfunding, and the sup- porter and investors who have contributed the funds. It is stated under the Draft Law that the general provisions of Turkish law would apply to the referred relationship. Following the enactment of the Draft Law, upon determination of any violation of the aforementioned terms, the Capital Market Board is granted with the power to take any kind of measures including, but 6 Capital Market Law under law no. 6362 published in Official Gazette dated 30 December 2012 and numbered 28513.