Banking Regulation and Supervision Agency (“BDDK”) has announced “Draft Regulation of Sharing Secret Information” (“Draft Regulation”). The Draft Regulation, on the basis of Article 73 of the Banking Law numbered 5411, sets forth the principles for “confidentiality obligation” and for sharing such confidential information which are qualified as bank secret or client secret. In principle, the Draft Regulation aims to clarify the concepts of confidentiality obligations, exceptions of the same and client secrets. The said Draft regulation is now open to the public’s comments/opinions.

Briefly, the Draft Regulation details the scope of the confidentiality obligation and sets forth that if a confidential information is known of a client who is registered before another bank, even if the client relationship is not founded yet;  such information is also considered as within the scope of confidentiality obligation.

Confidential client information can only be shared with 3rd people within Turkey or in abroad upon client’s request.

However, under the exceptional circumstances, without any need of client’s request, secret information can be shared. Sharing such confidential information with competent authorities which are undoubtedly authorized under law is permitted. Plus, on the condition not exceeding the stated purposes, sharing is allowed for the below mentioned circumstances. Instead, it is additionaly requested to execute a confidentiality agreement for the below mentioned sharing:

a) Exchange of information and documents received amongst banks and risk and financial institutions,

b) Works within the scope of consolidated financial tables preparations, risk management and internal audit applications.

c) Submission of information and document to be used for valuation studies for share  transfer.

d) Exchange of information and documents between service providers who conduct evaluation, rating or support service, independent audit activities or any kind of service provisions.

Also, in order to coordinate the exchange of such information and to evaluate the sharing request’s validity, banks are obliged to found Information Sharing Committee.

BDDK, upon receiving public’s comments, will revise the provisions (if necessary) and the Draft Regulation will be entered into force once it is published on the Official Gazzette.