TURKEY Law and Practice Contributed by: Sera Somay, Merve Kurdak and Doğa Pınarlı Dedebaş, Paksoy
• Futures and Options Market Procedure. BIST imposes requirements on all market members using algorithmic trading systems, including the obli - gation to register their systems and to provide detailed information on matters such as software ownership, server location, communication protocols (FIX/OUCH) and testing results. Algorithmic and HFT activity is permitted only through licensed BIST members, which bear responsibility for monitoring and controlling their algorithms, with obligations to immediately halt order transmission in the event of malfunction or risk. All market members utilising algorithmic trading systems to generate and transmit orders must utilise the spe - cific BISTECH PTRM application. The BISTECH PTRM framework imposes limits on maximum order size, price tolerance, order speed (orders per second), repeated orders and instrument- specific risk parameters. Exceeding these limits trig - gers automatic blocking of the relevant risk group until the issue is resolved. HFT Users The servers generating orders on behalf of HFT users must be deployed by the market member at the BIST co-location centre, and BIST must have assigned a distinctive user code. While HFT users are exempt from standard order cancellation fees, they are subject to Order-to-Trade Ratio (OTR) fees. When the ratio of submitted orders to executed trades exceeds thresh - olds (eg, 5:1 or 15:1), fixed fees apply per excess order, calculated daily and invoiced monthly. Asset Class Differences With respect to algorithmic trading and HFT, no dis - tinction is made among asset classes in terms of a separate or specific regime applicable to such activi - ties. However, each asset class is governed by its own general regulatory framework, and algorithmic trad - ers and HFT players are required to comply with the requirements applicable to the relevant asset class.
or registered as a market maker. Market making is a separate, optional status subject to a distinct regula - tory regime. 7.3 Regulatory Distinction Between Funds and Dealers The regulations apply uniformly to all market members that engage in such activities, regardless of whether they are acting as dealers or funds. Nevertheless, due to the differences in their legal status, certain distinc - tions emerge with respect to the allocation of legal responsibility arising from these activities. Dealers Dealers may receive client orders, trade on their own account and have direct market access. Deal - ers engaging in algorithmic trading or HFT operate as BIST members, and are directly subject to exchange rules, pre-trade risk management and OTR require - ments, and member-level obligations. Funds Funds conduct transactions within the scope of port - folio management activities, acting on behalf of inves - tors, and they do not accept client orders. Unlike deal - ers, funds do not access the market directly as market participants. Algorithmic trading or HFT activities implemented at the fund level are executed through In Türkiye, programmers who develop and create trading algorithms and other electronic trading tools are not directly regulated. Responsibility for the legal compliance of such algorithms rests with the market member that uses and provides them. Under the respective legislation, market members are directly and non-transferably responsible for the algorithmic trading systems. Market members must provide written information to BIST about the soft - ware and must provide a written undertaking that these systems have been tested, that their results are predictable and that they will not cause transactions that would disrupt the market. licensed dealers acting as intermediaries. 7.4 Regulation of Programmers and Programming
7.2 Requirement To Be Licensed or Registered as a Market Maker When Functioning in a Principal Capacity
When acting in a principal capacity, algorithmic or HFT players are not automatically required to be licensed
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