Governance Information • Nov 12, 2024
Governance Information
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| 1 | PURPOSE AND SCOPE 3 |
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|---|---|---|---|
| 2 | DEFINITIONS3 | ||
| 3 | GENERAL PRINCIPLES5 | ||
| 3.1. | What Should Be Considered as Inside Information?5 | ||
| 3.2. | Obligations Regarding Confidentiality and Use of Inside Information5 | ||
| 3.3. | Persons Obliged to Ensure the Confidentiality of Information 6 |
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| 3.4. | Obligations Regarding Transactions of Employees and Persons Discharging Managerial Responsibilities (PDMRs)7 |
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| 3.4.1. | Obligations Applicable to All Employees and PDMRs and the Trading Windows7 | ||
| 3.4.1.1. | Prohibition on Trading Based on /Using Inside Information 7 |
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| 3.4.1.2. | Closed Period 7 |
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| 3.4.1.3. | Trading Windows when the Transactions are Allowed7 | ||
| 3.4.2. | Other Obligations Applicable to PDMRs7 | ||
| 3.4.2.1. | Obtaining Pre-Clearence Prior to the Transactions7 | ||
| 3.4.2.2. | Post-Transactions Disclosure Obligation 8 |
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| 3.4.2.3. | Obligation to Return Short-Term Net Trading Profits (Short Swing)8 |
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| 3.4.3. | Obligations Applicable to Major Shareholders8 | ||
| 4 MEASURES TO BE TAKEN FOR ENSURING THE CONFIDENTIALITY OF INSIDE INFORMATION AND DOCUMENT SECURITY 9 |
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| 4.1. | Main Measures9 | ||
| 4.2. | Additional Measures to be Taken Project Studies9 | ||
| 4.3. | Information Technology-Based Measures and Document Security10 | ||
| 5 | SANCTIONS AND PENALTIES IMPOSED BY CMB IN CASE OF VIOLATION OF REGULATIONS 11 |
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| 5.1. | Sanctions for Non-compliance with the Disclosure Obligation 11 |
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| 5.2. | Market Abuse Actions and Related Sanctions 12 |
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| 5.3. | Capital Market Crimes and Related Sanctions12 | ||
| 6 | AUTHORITY AND RESPONSIBILITIES 13 |
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| 7 | EFFECTIVE DATE AND REVISION HISTORY 13 |
The purpose of the Policy on Protection of Inside Information and Prevention of Insider Trading ("Policy"), which is an integral part of the Tüpraş Code of Ethics, is to set the principles and rules regarding the obligations of Türkiye Petrol Rafinerileri A.Ş. ("Tüpraş") employees and executives, Business Partners, and all other stakeholders with access to inside information related to Tüpraş in relation to the use and protection of inside information.
The Policy has been prepared taking into account the relevant provisions of the Tüpraş Code of Ethics1 , as well as the regulations of the Capital Markets Board (CMB) of Turkey due to the issuance of capital market instruments locally and EU regulations due to capital market instruments trading abroad.
In case of failure to ensure the confidentiality of inside information, various sanctions may arise for all parties who have Inside Information related to Tüpraş and who use or disclose this information without complying with the relevant regulations, in addition to the potential reputational and commercial damages. This Policy has been prepared to explain the obligations of Tüpraş employees and executives, Business Partners, and all Tüpraş Group employees with access to inside information related to Tüpraş, in order to avoid such adverse consequences and includes information on closed periods, other transaction restrictions, and notification obligations.
All employees and executives of Tüpraş Group shall comply with this Policy. Tüpraş expects all its stakeholders, main shareholders, and Business Partners to act in accordance with the Policy to the extent applicable and takes the necessary steps to ensure this.
"EU regulations" refers to all directives, laws, decisions, and other regulations enforced by the European Union, including but not limited to the Market Abuse Regulation (596/2014) and Market Abuse Directive (2014/57/EU), regarding the public disclosure and confidentiality of information.
"Inside Information" is defined in the EU regulations and CMB regulations as information, events, and developments that have not yet been disclosed to the public and that may affect the value, price, or investment decisions of investors regarding capital market instruments. Detailed explanations can be found in section 3.1.
"Person discharging managerial responsibilities (PDMR)" refers to the members of the company's board of directors and individuals who, although not members of the board of directors, have direct or indirect regular access to the Issuer's inside information and have the authority to make administrative decisions affecting the issuer's future development and commercial objectives. In addition, according to CMB regulations, the board members and othersenior executives of the issuer's parent company, who have direct or indirect regular access to the Issuer'sinside information and have the authority tomake administrative decisions affecting the issuer's future development and commercial objectives are considered within this scope. Positions classified as PDMR for Tüpraş are described in the Tüpraş Disclosure Policy2 .
1 https://www.tupras.com.tr/assets/all-pdfs/tupras-code-of-ethics.pdf
2 https://www.tupras.com.tr/assets/all-pdfs/tupras-disclosure-policy.pdf
"Issuer" is defined in the Capital Markets Law as legal entitiesthat issue capital market instruments, that apply to the Board for issuance or that have their capital market instruments offered to the public and refersto Türkiye Petrol Rafinerileri A.Ş. in the context of this Policy.
"Business Partners" include suppliers, distributors, dealers, authorized services, and other third parties with whom the company has a business relationship, and all kinds of representatives, subcontractors, consultants, etc. acting on behalf of the company, including but not limited to service providers such as auditors, rating agencies, consultants, as well as their employees and representatives.
"KAP" refers to the Public Disclosure Platform operated by the Central Securities Depository (MKK).
"Tüpraş Group" refers to Türkiye Petrol Rafinerileri A.Ş., companies which are controlled directly or indirectly, jointly or individually by Türkiye Petrol Rafinerileri A.Ş. and the companies listed in its latest consolidated financial report.
"List" refers to the "List of Persons with Access to Inside Information" kept by Tüpraş in accordance with CMB regulations.
"MKK" refers to the Central Securities Depository Inc.
" Disclosure " refers to the material events disclosure.
"Capital market instrument" refers to securities, derivative instruments, and investment contracts as defined in the Capital Markets Law, including but not limited to shares, bonds, and finance bills.
"Corporate Governance Department" means the Head of Corporate Governance Department and employees working within the Tüpraş Enterprise Risk Directorate, reporting to the Executive Vice President in charge of Financial Affairs.
"CMB" refers to the Capital Markets Board.
"CMB regulations" refer to all laws, regulations, communiqués, guides, principle decisions, and other regulations put into effect by the CMB, primarily the Capital Markets Law No. 6362, the Material Event Disclosures Communiqué, the Market Abuse Communiqué, the Communiqué on Payment of Net Purchase and Sale Profits by Managers to Issuers, and the Material Event Disclosures Guide, regarding the public disclosure and ensuring the confidentiality of information.
3 (3) are classified as "persons closely related to the ISBK" only in terms of the CMB regulations, and the definition of a person closely related to the ISBK in the EU Regulations does not include these persons.
Inside Information is broadly defined in local and international regulations as information, events, and developments that have not yet been disclosed to the public and may affect the value, price, or investors' investment decisions regarding capital market instruments. Since there is no restrictive definition, whether a situation is considered inside information should be evaluated on a case-by-case basis.
In principle, information, events, and developments that are:
are considered "Inside Information".
Below are some examples of events and developmentsthat may be considered as Inside Information. However, it should not be forgotten that there may be othersubjectsthat may also be considered Inside Information, and there may be cases where the following developments may not be considered as Inside Information. Detailed explanations, examples, and guidance on the subject can be found in the CMB's Material Event Disclosures Guide.
In case of doubt about whether a piece of information is considered Inside Information, you should consult the Corporate Governance Department within Tüpraş Enterprise Risk Directorate Department at [email protected] and ensure the confidentiality of the information until a response is received, treating it as Inside Information.
Tüpraş Group employees and executives are also expected to comply with this Policy for the information they learn during their duties about companies other than Tüpraş, whose capital market instruments are traded on stock exchanges, as this information may also be considered Inside Information for the relevant company.
Tüpraş Group employees, executives, persons closely associated with them, or Business Partners who possess Inside Information must:
Ensure the Confidentiality of Inside Information and Not Share it with Third Parties: The confidentiality of the information must be maintained until it is disclosed to the public and should not be shared with third parties in any way. The measures expected to be taken for this purpose are included in Section 4 below, titled "Measures to be Taken and Document Security for Ensuring the Confidentiality of Inside Information."
Prohibition of Providing Comment/Advice Based on Inside Information: No advice or comments should be given for the purchase or sale of capital market instruments based on the Inside Information possessed.
If Inside Information is unintentionally shared with third parties or if it is learned that it has been shared, one shall contact the CFO or the Corporate Governance Department immediately to take necessary measures and, if necessary, disclose it to the public, as the confidentiality of the Inside Information cannot be ensured.
For a piece of information to be considered publicly disclosed, it must be announced on the Public Disclosure Platform (KAP) in accordance with the regulations. In cases such as the communication of news in the press or social media or press releases, the obligations regarding Inside Information remain valid as long as no announcement is made on KAP.
Tüpraş Group employees and executives are also required to comply with the principles set forth in this Policy regarding the Inside Information they acquire during their duties, even if they leave their jobs. In this context, even in situations such as leaving the job, the confidentiality of previously acquired Inside Information must be maintained, Inside Information should not be shared with third parties, and transactions should not be made based on such information.
According to the CMB regulations, the obligations to ensure the confidentiality of Inside Information and the prohibitions on using or trading based on such information are not only defined for the employees and executives of the company but also include a much broader scope, covering the executives and shareholders of the company's subsidiaries and parent companies, as well as employees of all institutions that the company has a business relationship with, such as customers, suppliers, auditors, rating agencies, etc.
Therefore, anyone who posesses Inside Information in any way or knows that the information they possess is of Inside Information nature must adhere to the principles set forth in this Policy.
As per the CMB regulations, the information of individuals who are working for Tüpraş under an employment contract, service relationship, or in any other way, and who have regular access to Inside Information, is monitored through the "List of Persons with Access to Inside Information" ("List"), and the general list is reported to the Central Securities Depository (MKK). Persons added to the List are informed about their obligations and the applicable sanctions. However, it should be kept in mind that the obligation to ensure the confidentiality of Inside Information is valid for all parties who access Inside Information, not just those on the List, and compliance with the relevant regulations should be carefully observed, regardless of whether they are included in the List or not.
Primarily Tüpraş PDMRs and employees, as well as all Tüpraş Group employees who have access to undisclosed Inside Information that could significantly affect Tüpraş's operations or financial results, should not engage in any transactions involving Tüpraş's capital market instruments during the period until the Inside Information is publicly disclosed.
In accordance with the CMB regulations, during the closed periods, which is defined as the time between the last business day of the period to which the annual and semi-annual financial reports are related and the public disclosure of these reports (i.e., from July 1 and January 1 until the relevant financial reports are publicly disclosed), individuals with access to Inside Information, or their spouses, children, or persons living in the same household, should not engage in any transactions involving Tüpraş's publicly traded shares and capital market instruments based on these shares. Although the 3 and 9-month financial reporting periods are not included in the closed period definition according to the CMB regulations, if there is undisclosed information in these financial reports that could affect the share price or investor decisions, those with access to such information should not engage in transactions until the mentioned financial reports are publicly disclosed, as required by the general regulations.
Similar restrictions are also present in EU regulations. Accordingly, for debt instruments (Eurobonds) issued by Tüpraş abroad, the 30-day period before the public disclosure of the 3, 6, 9, and 12-month financial reports is applied as the closed period, and Tüpraş PDMRs should not engage in any transactions involving these instruments during this period.
The closed period dates concerning the CMB regulations are announced to employees and executives by Tüpraş Corporate Governance Department before the start of the relevant period.
Apart from the closed periods and periods when someone is in possession of undisclosed Inside Information, there are no legal restrictions on trading in Tüpraş capital market instruments.
While the obligations regarding the use of Inside Information and transaction prohibitions in the regulations are valid until the relevant information is publicly disclosed, it is recommended that transactions by employees and PDMRs be carried out at least one business day after the public disclosure of the Inside Information or financial reports, in order to ensure that investors have sufficient time to analyze the disclosed information and conduct transactions under equal conditions.
CMB and EU regulations include detailed obligations regarding the purchase and sale transactions of shareholders and executives of publicly traded companies, and there is a risk of administrative fines, imprisonment or judicial fines, and loss of reputation in case of non-compliance with these obligations.
To prevent these risks, prior to any transaction that may be carried out on Tüpraş capital market instruments, Tüpraş PDMRs should obtain pre-clearence from the CEO, CFO or the Corporate Governance Department at least two business days before a planned transaction on the compliance of the planned transaction with the regulations and the required disclosures if any, in order to assess whether a Disclosure obligation arises and to receive support for such Disclosure preparations if necessary.
The pre-clearence given is valid if the transaction is executed within the following two business days; if the transaction is planned for a later date, an opinion should be obtained again for the planned transaction in accordance with the specified periods.
In accordance with the CMB regulations, all transactions carried out by Tüpraş PDMRs and closely associated persons with PDMRs, as well as Tüpraş's parent company, regarding Tüpraş shares, other capital market instruments based on these shares, or publicly offered capital market instruments other than shares, should be immediately disclosed to the public through the PDP by the party executing the transaction.
Disclosure is not required unless the total amount of transactions reaches the threshold determined annually according to CMB regulations within the last twelve months. When calculating the total amount of transactions, all transactions carried out by each PDMR and closely associated persons shall be taken into account. The threshold applicable for each period will be specified in the announcements made by Tüpraş Corporate Governance Department to employees and executives.
Similar to CMB regulations, EU regulations also have a disclosure obligation for transactions exceeding a certain amount in debt instruments (Eurobonds) issued by Tüpraş abroad, carried out by Tüpraş PDMRs and closely associated persons with PDMRs.
In accordance with the CMB regulations, if a profit is made from the purchase and sale transactions of company shares by Tüpraş PDMRs during any six-month period, the net profit must be paid to the company within 30 days.
The regulation aims to eliminate the opportunity inequality between those who have earlier and easier access to Inside Information due to their positions and investors who can access this information only after it is announced to public, by requiring Tüpraş executives to pay the net profit obtained through short-term transactions to Tüpraş.
A limited number of exceptions to the return obligation are defined in the relevant regulation, and detailed information about the exceptions is included in the relevant communiqué.
In the CMB regulations, additional obligations are defined for shareholders who directly or indirectly hold more than 5% of the shares of public companies.
Firstly, obligations similar to the disclosure obligation introduced for PDMRs in section 3.4.2.2 are also defined for major shareholders.
In order to ensure compliance with the relevant regulations, it is recommended that shareholders holding more than 5% of Tüpraş's capital also ask for pre-clearence as stated in section 3.4.2.1 above, for the purpose of evaluating whether a Disclosure obligation will arise and, if necessary, obtaining support for Disclosure preparations before the transactions are carried out.
In addition, if a natural or legal person, or other natural or legal persons acting in concert with this person, directly or indirectly reach or fall below 5%, 10%, 15%, 20%, 25%, 33%, 50%, 67%, or 95% of Tüpraş's capital or total voting rights, a Disclosure should be made by these persons. If the person's direct shareholding reaches or falls below these ratios, the disclosure to be made by these people is made by the Central Securities Depository (MKK). However, if these ratios are reached or fallen below due to acting in concert, indirectly, or through voting rights, the disclosure obligation belongs to the relevant natural or legal person or other natural or legal persons acting in concert with this person.
The main measures to be taken by all parties in possession of Inside Information to ensure its confidentiality are listed below.
Information and developments related to the listed companies' strategic projects (e.g., significant asset or company acquisitions and disposals, mergers and demergers, strategic partnerships, significant investments, changes in operations, etc.), or the existence of an intention in this direction (even if not yet regarded as an Inside Information) or the evaluations thereof may be considered as material information that investors may attribute importance to. Therefore, in project studies, it is important to take the following measures to ensure confidentiality of information.
• Use of Project Code: The use of a project-specific code, which third parties cannot infer from, is important for ensuring confidentiality in communications related to the project.
Considering that the majority of information is transferred and stored through electronic channels today, the importance of information technology-based measures to be taken for ensuring confidentiality is also increasing. In this context, Tüpraş Information Security Policy, which has been prepared to define the necessary requirements for ensuring the confidentiality, integrity, and accessibility of the systems, information, and assets operated by Tüpraş, has been put into effect with the approval of the board of directors, and the implementation principles have been determined by the Tüpraş IT Department with the Information Security Procedures. In preparing these documents, national and international best practices, as well as relevant CMB regulations, including the Communiqué on Management of Information Systems, have been taken into account.
The basic principles determined in the Information Security Procedures prepared based on the Koç Holding Information Security Policy and related documents are as follows. These principles should be taken into account in terms of ensuring and protecting the confidentiality of all types of information, including, but not limited to, Inside Information:
The storage of documents containing information in shared areas accessible only to those who may need the information for business purposes, the evaluation of measures that can be taken in terms of confidentiality in these areas from the perspective of information 11ccess1111s11es, and the evaluation of 11ccess rights and measures taken for 11ccess security to be provided to third parties should be considered to the extent applicable to the security of shared areas within the company.
In case of non-compliance with the obligations set forth in CMB regulations regarding Material Event Disclosures, the company and/or the responsible executives may be subject to administrative fines. Administrative fines are determined annually by the CMB, and current amounts are announced in the CMB Bulletin and by Tüpraş Corporate Governance Department.
If a benefit is obtained as a result of non-compliance, the fine amount cannot be less than double the benefit.
If the actions requiring the imposition of administrative fines are repeated, the imposed fine is doubled, and if a benefit is obtained, the fine amount cannot be less than three times the benefit.
According to CMB regulations, actions that cannot be explained by any reasonable economic or financial reasons, and disrupt the trust, transparency, and stability of the stock exchange and other organized markets are defined as "market abuse actions" provided that they do not constitute a crime.
In cases where transactions are made on the stock exchange by persons who have directly or indirectly obtained Inside Information prior to public disclosure of such information in accordance with the regulations;
a) persons with Inside Information or continuous information providing this information to others, or
b) persons who directly or indirectly obtain Inside Information or continuous information from persons with such information and trade in the relevant capital market instruments, are considered as market abuse actions.
Furthermore, as stated in section 3.4.1, trading in shares traded on the stock exchange and derivative products based on these shares during the closed period by persons with Inside Information or continuous information, or their spouses, children, or persons living in the same household, is also considered as a market abuse action.
During the period between the finalization of Inside Information or continuous information and its disclosure to the public in accordance with the regulations, transactions in shares traded on the stock exchange and derivative products based on these shares by persons with Inside Information or continuous information, or their spouses, children, or persons living in the same household, are considered as market abuse actions.
On the other hand, providing false, misleading, or deceptive information, spreading rumors, giving news, making material event disclosures, commenting, or preparing reports related to stock prices, values, or indicators that may affect investors' decisions, and giving any order and/or carrying out transactions in the relevant capital market instruments before or after performing these actions by those who performed them, are considered as market abuse actions.
Lastly, failure to disclose information that may affect the prices, values, or investors' decisions of capital market instruments, which are required to be disclosed within the scope of CMB regulations, is also considered as a market abuse action.
Persons who commit market abuse actions will be subject to administrative fines imposed by the CMB. Administrative fines are determined annually by the CMB, and current amounts are announced in the CMB Bulletin and by Tüpraş Corporate Governance Department. If a benefit is obtained through market abuse, the fine amount cannot be less than double the benefit.
Capital market crimes are defined in the Capital Market Law, and those related to the confidentiality of Inside Information are "Insider Trading" and "Manipulation" crimes.
Using Inside Information to benefit oneself due to asymmetric information distribution caused by nondisclosure of Inside Information is considered as "Insider Trading". The two main elements of this crime are: (i) trading based on information and (ii) obtaining a benefit as a result. The sanction for this crime is determined as imprisonment from 3 to 5 years or a judicial fine of no less than double the benefit obtained.
Trading with the purpose of creating a false or misleading impression regarding the prices, price changes, supply, and demand of capital market instruments (transaction manipulation ) or providing false, misleading, or deceptive information in order to affect the prices, values, or investors' decisions of capital market instruments and obtaining a benefit through this (information manipulation) are considered as "Manipulation" crimes, for which imprisonment from 3 to 5 years and judicial fines are applied.
Similar crime definitions and sanctions are also included in EU Regulations, and monetary fines or more severe sanctions may arise according to the regulations of the countries where capital market instruments are traded.
All employees and executives of Tüpraş Group are obliged to comply with this Policy. Tüpraş expects and takes necessary stepsfor all Business Partners and main shareholdersto act in compliance with this Policy, to the extent applicable to the relevant party and transaction.
In case of any discrepancy between this Policy and local legislation applicable in the countries where Tüpraş Group operates, the more restrictive of the Policy or the relevant legislation will apply, to the extent that the application does not violate local legislation.
If you become aware of any action that you believe is contrary to this Policy, current legislation, or Tüpraş Group Ethical Principles, you may consult or report the matter to your immediate supervisor. Alternatively, you can report to Tüpraş Ethics Line via "https://secure.ethicspoint.eu/domain/media/tr/gui/108227/index.html".
Tüpraş Group employees can consult the Corporate Governance Department for questions about this Policy and its implementation. Violation of this Policy by an employee may result in significant disciplinary penalties, including dismissal, in addition to the regulatory authority sanctions mentioned in section 5. In case any third party, who is expected to act in compliance with this Policy, violates this Policy, the relevant contracts may be terminated.
This Policy takes effect on 12.11.2024 upon approval of the Tüpraş Board of Directors. The Executive Vice President in charge of Financial Affairs is responsible for the implementation of this Policy.
Material changes to the Policy must be approved by the Tüpraş Board of Directors.
| Revision | Date | Description |
|---|---|---|
| - | 12.11.2024 | Policy Approval |
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