1. MERKEZİ KAYIT KURULUŞU: CENTRAL SECURITIES DEPOSITORY OF TURKEY

2. MKK - MERKEZI KAYIT KURULUSU
GENERAL INFORMATION
Central Securities Depository of Turkish Capital Markets for dematerialized securities
Turkish capital markets is fully dematerialized
Beneficial-owner based system with the opportunity of having «omnibus accounts» for foreign CSDs & ICSDs
Supervised & Regulated by the Capital Markets Board of Turkey (CMB)
Officially Licensed R&D Center
In-house developed depository sytem; «Central Dematerialized System»
In-house developed Inverstor Services ; «e-MKK Services»
Financial Accounts Center of Turkey
All accounts that are opened in the financial system
System integration with «Ministry of Internal Affairs» & «Ministry of Finance»
Direct Link with the Austrian CSD – OeKB

3. DEMATERIALIZATION PROCESS
SECURITY TYPE
DATE
DEMATERIALIZATION RATE(%)
Stocks
%100
Mutual Funds
Exchange Traded Funds
2005
Private Sector Bonds
2006
Private Sector Commercial Papers
and Bank Bills
2009
Warrants
2010
Asset Covered Securities / Asset Backed
Securities
2011
% 100
Government Bonds & T-Bills
2012
Certificates
Sukuks

4. MKK - SHAREHOLDERS & BOARD STRUCTURE
% 64.9
% 30.1
% 5
The Association of Capital Market Intermediary Institutions of Turkey
BOARD STRUCTURE
2 Members
3 Members
1 Member
1 Member
1 Member
1 Member

5. MAIN DUTIES AND RESPONSIBILITIES
Central Securities Depository of Dematerialized Capital Market Instruments (November.2005)
Financial Accounts Center for all the accounts opened in Turkish Financial Sector (October.2011)
Electronic General Meeting Center for all Borsa Istanbul listed Companies (August.2012)
Electronic Commodity Center for all e-Warehouse Receipts (December.2012)
Digital Company Center for Companies’ «Information Society Services» (October.2013)
R&D Center for its Software Development Technologies (November.2013)

6. DEMATERIALIZED SYSTEM SOFTWARE
Developed by MKK R&D Center, e-signature usage
Web Based – Java Application – Remote Access
Secure messaging infrastructure MOM (Message-Oriented- Middleware)
ISO Information Security Certification
ISO Business Continuity Management System Certification
Award of merit at the 7th Technology Conference by
TUBITAK (Scientific and Technological Research Council of Turkey)
TTGV (Technology Development Foundation of Turkey)
TUSIAD (Turkish Industrialists’ and Businessmen’s Association)
TUBITAK R&D support
R&D SUPPORT

7. CENTRAL SECURITIES DEPOSITORY ACCOUNT STRUCTURE
MKK
PARTICIPANT «A»
(INTERMEDIARY INST.)
Participant Portfolio Acc.
Investor Acc.(1)
Free
Pledge
Attachment
PARTICIPANT «B»
( (I)CSD )
(I)CSD Portfolio Acc.
(I)CSD Investor Acc. (Beneficial Owner)
«Omnibus» Account
PARTICIPANTS
ACCOUNTS
SUB-ACCOUNTS

8. ELECTRONIC ACCOUNT OPENING
APPLICATION FOR
ACCOUNT OPENING
INTEGRATION
MKK MEMBER AND
ACCOUNT STRUCTURE
All accounts opened in Turkish Financial Markets
ID and contact information of every Investor in Turkey
(phone numbers, and mail addresses of investors)
MINISTRY OF FINANCE
ISSUER
COMPANY
Legal Entity
ISSUER
COMPANY
INVESTOR ACCOUNTS
TAX ID NO
TAX ID NO
MKK
Central
Dematerialized
System
INVESTORS
T.R. ID NO
INTERMEDIARY INSTITUTION/BANK
INTERMEDIARY INSTITUTION/BANK
INVESTOR ACCOUNTS
Real Person
T.R. ID NO
MINISTRY OF INTERNAL AFFAIRS
REGISTRY NO & PASSWORD
Investors
e-Government Integration
Accounts

9. NUMBER OF ACCOUNTS OPENED NUMBER OF FOREIGN INVESTORS’
(2012 vs 2013)
YEAR
NUMBER OF ACCOUNTS OPENED
NUMBER OF FOREIGN INVESTORS’
ACCOUNTS OPENED
FOREIGN OWNERSHIP (%)
2012
4,431,409
19,208
0,433%
2013
3,214,464
19,861
0,618%
In 2013, 42% increase in the number of depository accounts opened by the foreign investors compared to 2012

10. FIGURES (February 2014) 333 BILLION USD 23,188,568 3,609,422
ASSETS UNDER CUSTODY (MARKET VALUE)
23,188,568
NUMBER OF INVESTORS
3,609,422
INVESTOR ACCOUNTS WITH A BALANCE
43,376,355
NUMBER OF ACCOUNTS
4,278,759
NUMBER OF ACCOUNTS WITH A BALANCE

11. CUSTODY-SECURITIES (February 2014)
Foreign
Ownership:
% 61.23
Free Float:
84 bil. US $
Non Free Float:
136 bil. US $
1,115,151 INVESTORS
220 BILLION US $
STOCKS
36,594 INVESTORS
81 BILLION US $
GOVERNMENT DEBT SECURITIES
2,746,347 INVESTORS
13 BILLION US $
MUTUAL FUNDS
173,735 INVESTORS
16 BILLION US $
CORPORATE BONDS
3,676 INVESTORS
93 MILLION US $
EXCHANGE TRADED FUNDS
3,216 INVESTORS
4.07 MILLION US $
STRUCTURED PRODUCTS
2,717 INVESTORS
1.594 BILLION US $
OTHER SECURITIES

12. MKK - Investor Services
AloMKK
( )
e-GEM :
Electronic General Meeting
IVR System/ Call Center
Participation to General Assembly meetings by remote access & mobile applications - voting by electronic means
e-DATA :
Capital Markets Data Bank
Mobile Services SMS
Electronic Reports
( )
Distribution of capital markets data by econometric models
RISE (Investor Risk Appetite Index)
Mobile Blockage
Electronic Report Posting System
e-GOVERNANCE :
Corporate Governance & Investor Relations
Information
Portfolio Status
Account Movements
Reports
Investor Blockages
Periodic Notification
Portfolio Status
Account Movements
Communication bridge between companies and shareholders
e-CAS :
Investor Notification
Real time notification of investors regarding the movements in their accounts
Random Notifications
Electronic Notification
(SMS & )
e-WAREHOUSE RECEIPT :
Electronic Warehouse Receipt Center
Random Report Delivery
Conversion of agricultural products to electronic warehouse receipts
Monthly 10,000 Investors
Portfolio Status
Instant Notifications
Account Movements
Information on Corporate Actions

13. Communication bridge between companies and shareholders
Mobile Corporate Governance Project which is a platform to enhance corporate governance and investor relations and develop transparency and information access for market participants
Communication bridge between companies and shareholders
Continuous information exchange between shareholders and companies through internet, and mobile applications
Enables companies to reach their shareholders directly
Enables shareholders to access information on companies easily and completely
Investor Information Center
TUBITAK R&D support
R&D SUPPORT

14. «One of the pioneering applications in scope»
Developed in-house, launched and operated by MKK (Central Securities Depository of Turkey), e-GEM is a multilingual, real-time online general meeting, e-voting and e-proxy platform.
The platfrom can be easily customized based on different requirements of any financial markets.
With its launch on 01 October 2012, issuers/companies started to use e-GEM for conducting online general meetings as per the requirement of the Capital Markets Board of Turkey.
Turkey is the first country to make it a legal obligation for Borsa Istanbul listed companies to enable electronic means for their shareholders to attend general meetings via e-GEM.
It is possible for non-listed companies to use e-GEM as well.
Development
Started
Nov 2011
Launched
Oct. 2012
Load Tests
Jul-Aug 2012
Pen. Tests
Sept. 2012
Finished
Jul 2012

15. What Kind of Operations are Carried Out on e-GEM;
Issuers make convocations on e-GEM and upload proxy materials to the system.
Issuers can easily prepare list of attendees on e-GEM.
All parties are notified when convocation is made on e-GEM.
Participants can ask questions, express opinions and vote online during the meeting.
Access to proxy materials including meeting documents.
Physical and electronic votes are aggregated on e-GEM and calculated by the system to give the exact result for each agenda item.
Proxy assignment and delivery of voting instructions without any PoA documents.
Pre-registration of the vote preferences.
Access to voting results as soon as the meeting finishes.
Live stream of general meetings.

16. What e-GEM Brings to Investors; What e-GEM Brings to Custodians;
Minimum Costs (operations & time)
Instant Notifications
No Record Date
General Meeting Process from A to Z
Partial & Split Voting (through intermediary)
Vote Recording
No Shares Blockage
Attendance to Concurrent Meetings
Paperless Proxy
Vote Instructions
Access to Proxy Materials
Live Stream of Meeting
Minimum Operational and Out of Pocket Costs
Instant Reporting
No Record Date
No More Blocking of Shares
Vote Recording
Paperless Proxy
Integration with SWIFT
Attendance to Concurrent Meetings
e-Attendance

17. MEETING ATTENDANCE (FOREIGN INVESTORS)
STATISTICS (Oct’ )
Total Number of General Meetings Held on e-GEM
423
Average Length of General Meetings
43 minutes
Total Number of Electronic Attendees
13,464
Total Number of Physical Attendees
6,196
Number of (Investors’) Nationalities Using e-GEM 41
Maximum Number of Electronic Attendance
756
Maximum Number of Meetings Held on the Same Day 32
Average Voting Period on e-GEM
10 seconds
YEAR
MEETING ATTENDANCE (FOREIGN INVESTORS)
2011
4,753
2012
6,036
2013
15,115
13,464 investors attended electronically, 6,196 investors attended physically (19,660).
In its first year attendance ratio increased by 124%.
Among 13,464 investors electronically attended, 13,265 are foreign investors
Among 6,196 investors physically attended, 1,850 are foreign investors
Average number of physical attendees per GM is 13.
Average number of electronic attendees is 34 per GM

18. GENERAL INFORMATION & STATISTICS
Public Disclosure Platform (PDP): PDP is the primary official source of information for Borsa Istanbul (listed) companies, who are required to publicly disclose; their financial statements, any material events (events that give rise to Insider Information and Continuous Information), other events (Monthly notifications, Net asset value statements, Articles of Association, Fund Charter, Prospectus, circular, Notifications regarding the mergers, acquisitions and divestures, General information form of the company, Tender offer information form).
GENERAL INFORMATION & STATISTICS
Platform Operational Hours
7/24
Number of Data Vendors Linked to Platform 16
Number of Sub-Vendors Linked to Platform 17
Number of Companies Covered by the Platform
550
Number of Platform Users
2500
Number of PDP Members
1,453
Number of Notifications Sent in 2013
72,100

19. Activates whenever a transaction on their accounts is made
Notification of Investors via SMS & on the movements that take place from out of their accounts
Activates whenever a transaction on their accounts is made
Real time notification of investors on the movements that take place possible errors and fraudulent attempts that take place on their accounts.
Decreases possible individual or systemic risks
Notification Phase: Notification is made after the transaction is completed.
Blocking Phase: Transaction is not completed unless the investor subscribes to e-CAS Service.

20. Adapting the dematerialized system to agricultural industry of Turkey and Turkic Republics
Integration of agricultural sector with capital markets
Conversion of agricultural products stored in licensed warehouses to electronic warehouse receipts
Safekeeping of electronic warehouse receipts in MKK’s electronic book-keeping system
Trading of products at the Commodity Exchange
Farmers Notification System

21. Central data bank of the capital markets
Co-operation with Ozyegin University & Markit Partners
Distribution of all data produced in the Turkish capital markets by econometric models in a secure, consistent and reliable manner
Statistics on capital markets in international standards
Academic articles and research reports
Investor Confidence Index, Investor Risk Appetite Index, Attachment Index and Financial Indicators
Electronic securities database
Contributing to academic research and decision-making processes of policy makers
Providing reliable & consistent data to ratings institutions
MKK is awarded with the “Best Big Data Project in Financial Sector” award by the International Data Corporation (IDC)

22. A weekly indicator, analyzing 850,000 investor data
Calculated by taking weekly portfolio changes of the investors who own at least 5,000 TL stock portfolio value at any period beginning from 28 November 2005.
Changes of the investors’ stock and A-type mutual funds total portfolio values on every Friday adjusted for the changes in BIST-100 are used
RISE index covers all investor types, such as “Domestic &/ or Foreign Investors” and etc.
Using a matrix of variations, investors are given scores between “0” and “1”
If the calculated index is above (50), it implies that the investors are holding a rather risky portfolio;
If the calculated index is below (50), then it implies that the investors are holding a rather risk-free portfolio compared to previous period of 2 weeks;

23. MKK – 2014 TARGETS Central Depository System Upgrade v2.0 (CDS v2.0)
Establishing new Collaboration and Cooperation Models with Foreign CSDs and ICSDs
Upgrading and Updating of MKK’s Information Technologies Infrastructure
e-GEM SWIFT Integration for both ISO 15022/20022
Taking Over Borsa Istanbul’s «Public Disclosure Platform – PDP» and Upgrading it to v4.0 (MKK has taken over the platform as of March 17th)
Providing Support and Maintenance of Systems for Borsa Istanbul – Nasdaq OMX Partnership
Dematerialising new Agricultural Products under the Scope of e-WAREHOUSE RECEIPT Services Provided by MKK 23 23

24. MKK - FUTURE OUTLOOK
Maximizing Ancillery Service & Value Added Service Revenues (50%)
Data/Information Vendoring
Financial Information Services
Investor Services
Commodity & Capital Market Integration
Innovative IT Services & Software Development
New Value Added Services to utilize information capacity
Implementation of international industry standards (Full STP in Corporate Actions Operations, ISO20022, LEI, etc.)
Integration,Cooperation and Partnerships with Europe, Middle East, North Africa and Turkic Republics counterparties to complete the post-trading chain from West to East

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