Electronic General Assembly Guidelines

Digitilisation and Remote Access

The concept of digitalisation has become more popular among all sectors amid the coronavirus (COVID-19) pandemic. All sectors are reviewing their current business methods and accelerating their digitalisation process. Digitalisation efforts and the increasing significance of corporate governance accelerate the significance of holding general assembly (GA) and board of directors (BD) meetings via remote access. In this context, the Electronic General Assembly System (E-GAS), prepared by the Central Registry Agency (CRA) within the Action Plan No. 49 of the Istanbul International Financial Center Project, started rendering its services on October 1, 2012.  The E-GAS allows transmitting video and audio transmission via live broadcast to hold the general assembly meetings in an virtual environment.

The Position of the Electronic General Assembly in the Legislation

Article 1527 of the Turkish Commercial Code (TCC) numbered 6102 has made it possible to hold GA meetings in electronic and physical environments. The Regulation on General Assemblies of joint-stock companies to be held in an electronic environment, which regulates the electronic general assembly application procedures and principles, was published in the Official Gazette dated 28 August 2012 number 28395. Companies whose stocks are listed on the stock exchange must hold their GA meetings in an electronic environment. As for publicly held joint-stock companies and public companies not listed on the stock exchange, conducting a virtual general assembly is left to their preferences.  Introducing a virtual general assembly mandate for all listed companies is the first in the world

E-GAS Application

Joint-stock companies that request to hold GA meetings virtually should agree with a live broadcasting company and use CRA's E-GAS application. With the E-GAS application, shareholders can attend the physically held GA meeting, either in person or through a representative, simultaneously with the virtual environment, as a result of the video and audio transmission. In addition, E-GAS was established as an information system that provides the opportunity to express opinions and suggestions regarding the agenda, vote, and log in with an electronic signature. In April 2013, E-GAS Application took first place in the Best Use of Online Services category of the Financial Sector Technology Awards.

Use of Electronic Signature

For this reason, some articles related to the internet have been added to the existing laws. Legal regulations regarding the use of electronic signatures in our country entered into force with the Electronic Signature Law No. 5070 published in the Official Gazette No. 25355 dated January 23, 2004. According to the e-signature Law, it is ensured that an e-signature will have the same legal consequences as a wet signature. The signature must be provided by the Electronic Certificate Service Provider (ECSP) described in Article 8 of the E-signature legislation. In our country, electronic signatures can be obtained from ECSPs with an ID or passport number. Also, electronic signatures from foreign ECSPs are considered secure and are permitted. With the use of e-signatures, safe participation and voting at GA meetings via E-GAS application have become possible.

E-GKS, Central Registry Number System Integration

According to the Trade Registry Regulation definition, the Central Registry Number System is an application in which trade registry transactions such as registration, amendment, and cancellation made by trade registry offices are carried out electronically. It is managed by the Ministry of Customs and Trade and also includes the common central database, where the contents that need to be registered and announced with the trade registry records are regularly stored and presented in an electronic environment.

E-GAS works have revealed the necessity of integration of the CRA and Central Registry Number System. Registration will be possible by uploading the minutes of the decisions signed after the GA meeting to the E-GAS system and forwarding them to the Central Registry Registration System. Through this method, there will be no need for a physical registration application. Currently, it is not possible to complete post-meeting registration procedures online. However, studies on this issue continue.

Electronic General Assembly Expertise Certificate

The Capital Markets Licensing and Registry Training Portal (OEP) provides electronic general assembly expertise training. The practical online training provides information on how to use the E-GAS application on the screen. With this certificate, the authority to manage an electronic general assembly is obtained from the E-GAS program. After the GA meeting, the certified E-GAS expert who manages the electronic E-GAS screen must also sign the meeting minutes.

Conclusion

Digitalisation has affected all business lines amid the pandemic. As a result of these developments, online communication tools are replacing traditional tools. Today, the opportunities provided by communication tools are beneficial in the internal functioning of multi-partner companies and the implementation of GA meetings. In parallel with the developments in commercial law, an application called E-GAS was developed by CRA. Through this application, it has been possible to hold a virtual general assembly meeting. The widespread use of the E-GAS application will contribute to the international acceptance and competitiveness of the corporate governance effectiveness of our companies. In addition, the increased information exchange between shareholders and companies, thanks to its transparency and structure in compliance with international legislation, will contribute to the Istanbul Finance Center project, which will make Turkey an attraction centre for global investors.