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New Era in Borsa Istanbul: Venture Capital Market!

Berk Cin

Cenk Civan

Pursuant to Communiqué on Companies whose Shares will be listed on the Venture Capital Market (II-16.3) (“Communiqué”) issued by the Capital Markets Board (“CMB“), non-public companies are entitled to issue shares through capital increase without public offering, and these shares can be sold to qualified investors and listed on Borsa İstanbul. In accordance with the Communiqué, on September 29, 2023, Borsa İstanbul announced the establishment of the Venture Capital Market (“VCM”) (“Announcement”). Thanks to the Announcement, the Communiqué has come to life for companies that do not wish to go public but wish to secure equity financing from the capital markets.

With the Announcement, Borsa İstanbul made amendments to the Directive on Equity Market and Directive on Listing, introducing listing requirements, delisting conditions, and market changes in the VCM.

Listing Requirements on the VCM

Pursuant to the Directive on Listing, the listing requirements on the VCM:

  • Preparing a prospectus subject to the approval of the CMB.

  • Articles of association of non-public companies must not contain any restrictive provisions regarding the transfer of listed shares.

  • Non-public companies must not be a part of any significant legal disputes that would affect these companies’ production and other activities. These non-public companies must obtain a legal report prepared by an independent legal counsel to confirm the compliance of the company’s legal status and the legal status of the shares with applicable laws.

  • Approval of the Board of Directors of Borsa İstanbul for the listing of shares of the company on the VCM following an assessment on the financial status and activities of the company.

  • An independent auditor must provide positive opinion regarding non-public companies’ recent annual and relevant interim period financial reports. 

  • A minimum of 10% of the shares issued by the non-public company through a capital increase to be offered to qualified investors.

The requirement of “not meeting the conditions to exit the scope of the law” regulated in the CMB’s Communiqué on Equity (VII-128.1) will not apply to companies whose shares are listed on the VCM.

Mandatory Market Change Requirement

Pursuant to the Communiqué, companies whose shares are listed on the VCM are required to apply to the CMB to go public by way of a capital increase on the fifth year following their listing on the VCM. Therefore, the Listing Directive introduces a mandatory market change requirement for companies whose shares are listed on the VCM, aiming for their shares to be listed on the Star Market, Main Market, or Sub-Market following the abovementioned period, provided that these companies complies with the listing requirements of the relevant market for a market change.


With the establishment of the VCM, a new era has begun for companies seeking to secure equity financing without an IPO. Through this approach, those companies will have the opportunity to establish the structure and to achieve the necessary growth for a future IPO with the help of the financing obtained during the pre-IPO period.


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