TURKEY Law and Practice Contributed by: Sera Somay, Merve Kurdak and Doğa Pınarlı Dedebaş, Paksoy
to comply with these obligations and implement risk- based AML/CTF measures. Türkiye is also bound by United Nations Security Council resolutions on targeted financial sanctions and has introduced domestic mechanisms for the implementation of these obligations, in line with FATF Recommendation 6. Although Türkiye does not main - tain an autonomous sanctions regime, the legal frame - work enables the application of UN-based measures and requires obliged entities to screen customers and transactions accordingly. Overall, the Turkish AML/CTF regime follows FATF standards to a substantial degree, and ongoing leg - islative and regulatory updates continue to be made to ensure further harmonisation with evolving FATF requirements. 2.16 Reverse Solicitation Under Turkish law, regulated products and services may be offered only by duly licensed or otherwise authorised financial institutions. There is no over - arching or general reverse solicitation rule or guid - ance applicable to fintech companies as a whole, and activities of a foreign entity that constitute the provision of regulated services to persons resident in Türkiye, such as payment services, trigger Turkish licensing requirements, with any related marketing or solicitation being prohibited. That said, the reverse solicitation scenario is generally recognised for certain fintech business models, most notably for investment services provided by foreign financial institutions and services provided by foreign crypto-asset service providers. While such entities are in principle required to be licensed in Türkiye, Turkish legislation allows, on a reverse basis, Turkish residents to receive investment services from foreign financial institutions and crypto-asset services from foreign crypto-asset service providers, provided that no pro - motion, advertising or marketing activities are directed at persons resident in Türkiye and that the services are obtained solely at the initiative of the Turkish resident. Conversely, where a foreign entity establishes a place of business in Türkiye, operates a Turkish language website or engages, directly or indirectly through intermediaries, in promotional or marketing activities
targeting persons resident in Türkiye, the activities are deemed to be directed at Turkish residents and cannot be characterised as reverse-based. 3. Robo-Advisers 3.1 Requirement for Different Business Models Although there is no specific legal regime governing robo-advisers, robo-advisers are implemented and mostly used in Turkish practice in relation to invest - ment activities by market participants, such as banks and investment institutions. Investment advice, financial analysis and general rec - ommendation activities relating to crypto-assets may be carried out in accordance with the conditions set out under the applicable legislation; however, the con - duct of portfolio management activities is expressly prohibited. 3.2 Legacy Players’ Implementation of Solutions Introduced by Robo-Advisers Legacy players, particularly banks, pension com - panies and investment institutions, are increasingly implementing robo-advisers, especially in connection with portfolio management services. In addition, robo-advisers are used to provide analy - ses of clients’ portfolios and to offer recommendations in the form of weekly or monthly bulletins. Legacy players currently tend to offer these services through their existing platforms rather than via separate robo- adviser platforms. As there is no separate legal regime governing robo- advisers in general, the applicable legislation relating to investment activities and support services applies to the provision of these services. 3.3 Issues Relating to Best Execution of Customer Trades In Türkiye, robo-advisers are not subject to a separate best execution regime. Instead, existing compliance expectations are intensified, particularly in relation to algorithm design, order routing, conflicts of interest, ongoing monitoring and client disclosure. Therefore,
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