Preventing market manipulation was the main focus of the Capital Markets Board, or SPK, during auditing activities in 2009, according to a report published recently by the institution.
The report said more than half of audits conducted by the SPK were related to manipulation attempts. The proportion of audits conducted in 2008 on suspicion of manipulation was 36.2 percent, while the number of audits on suspicion of manipulation in 2009 jumped to a striking 53 percent, with a total of 103 manipulation audits being carried out. According to the report, 103 of a total of 194 auditing reports and letters registered in the last year were related to manipulation.
On the other hand, the proportion of audits concerning publicly traded companies has dropped. Audits for publicly traded companies ranked second at 19 percent. Most audits of public companies were undertaken to investigate camouflaging earnings to avoid tax, a practice known as “income shifting,” the report said.
An increase in audits concerning insider trading over the previous year was also observed. The proportion of audits concerning insider trading, which constituted 4.6 percent of all audits in 2008, increased to 6.2 percent, according to the report.
Turkey ready to become a financial hub
In the report, Vedat Akgiray, SPK chairman, said the board had forecast that Turkey would become an international finance hub within the next five years with the preparation of a new Capital Markets Law and new regulations.
The biggest innovation in the upcoming period for capital markets will be the Capital Markets Law, the report quotes Akgiray as saying.
“The SPK will become an institution that can make rapid decisions after key changes are made to the present Capital Markets Law, which currenty does not fulfill the required improvements needed in the capital markets,” Akgiray said. The institution aims to also form new financial instruments and institutions, the report noted.
Market surveillance systems in some of the countries negatively affected by the global economic crisis are not sufficient, said Akgiray. “However, the SPK has developed a surveillance system in struggling against market delinquencies, such as manipulation and insider trading, that could set an example for the whole world.”
After the economic crisis that shook Turkey in 2001, the country restructured the banking system, Akgiray said, adding that under the leadership of the SPK, a strict surveillance system was implemented for the Turkish exchange and other financial markets.
Better investment environment
The report also included information regarding future SPK targets. The investment environment in Turkey is an important field for SPK to focus on to make it more attractive to investors, the report said.
Forming a proper market for equity securities for small- and medium-sized enterprises, and the renovation of technological infrastructure considering the new kinds of risks in the marketplace are also among SPK’s aims.
The institution also aims to provide a qualified alternative to the foreign exchange market.
