140
Chart 4.45: Turkey’s Outstanding Capital Markets vs Bank Financing Relative to GDP
2010
Outstanding
amounts as a %
of GDP at
USD732.0
billion
Loans/Financing
Outstanding
2016
Outstanding
amounts as a %
of GDP at
USD857.0
billion
L
Bonds Outstanding
Source: CMB Annual Reports, Turkey IMF Country Report No. 17/35, The Banks Association of Turkey Report
2016
Based on our methodology, Turkey is placed under “developing” status due to sustained sukuk
issuance by the public and private sectors, and the country’s concerted efforts in building a
viable Islamic finance ecosystem.
4.5.2 GROWTH OF THE SUKUK MARKET IN TURKEY
The formal regulation of the development of sukuk began with the Capital Markets Board of
Turkey (CMB) issuing the Communiqué on the principles regarding lease certificates and ALCs
in April 2010. Through the issuance of the Communiqué, the CMB aims to facilitate the
development of an alternative instrument for Islamic finance and has created a new era for the
Turkish capital market. According to the Communiqué, only ALCs that function as SPVs are
allowed to issue lease certificates. Subsequently, in 2012 the Law on Regulating Public Finance
and Debt Management was amended to facilitate Turkey’s first sovereign sukuk issuances in
international and domestic markets within the same year. The sovereign issuance was issued
by Müsteşarlığı Varlık Kiralama AS (HMVKŞ), as ALC set-up by the Undersecretariat of Turkey.
On June 2013, the CMB released a second Communiqué on lease certificates (which supersedes
the first); this expands the principles governing lease certificates and originators of ALCs. Since
trusts are not regulated under Turkey’s civil law, the ALCs can be incorporated as joint stock
companies, as per the guideline in the second Communiqué. Figure 4.13 summarises the key
phases that Turkey has undergone in strengthening its sukuk regulations.