Brokerage Methods

In the public offering of shares, intermediary institutions may act as an intermediary in two different ways: Mediation Charter and Best Effort Mediation.

1. Best Effort Brokerage Method

Best effort intermediation is a method by which the intermediary institution will endeavour to sell the capital market instruments offered to the public within the specified sales period. In this process, the intermediary institution shall not be liable in case the unsold shares are not sold. Unsold shares are either returned to the issuer or may be sold to third parties who have previously committed to purchase such shares.

• Basic & Features:
  • The intermediary organisation spends effort to sell the shares but does not guarantee the sale.
  • The unsold shares shall be returned to the issuer or may be sold to third parties.
  • Investors cannot claim any rights related to unsold shares.

2. Intermediation Contract Method

A brokerage commitment is a method whereby the brokerage undertakes to purchase a certain number of shares and undertakes to sell them. This can be in the form of tümününü overrun, partial tümünü overrun or balance overrun.

• Tümünü Undertaking: The intermediary institution agrees to purchase all the issued shares and sells them to investors through public offering.
• Partial Tümünü Undertaking: The intermediary institution agrees to purchase and sell part of the issued shares.
• Balance Purchase: It is the situation where the remaining part of the shares sold is purchased by the intermediary institution.

Key Features:

• The intermediary institution has the right to purchase certain shares and carries out the entire sale.
• The responsibility for unsold shares belongs to the intermediary institution.
• Investors are guaranteed that the sale will be realised.

Both methods shape the public offering process by determining the level of responsibility of the intermediary institutions and the strategic objectives of the issuers. Which method is chosen varies depending on the offering structure of the shares and the targeted investor group.