ACCOUNTING OF INTERMEDIARY FIRMS WARRANT TRANSSACTIONS

Year 2013, Volume: 13 Issue: 26, 372 - 392, 01.12.2013

Rabia Özpeynirci Emine Kalaycı

Abstract

Financial markets went through a rapid transition from traditional financial
instruments like securities and equities to more complex financial instruments starting
from the 1980‟s . Interest rates, foreign currencies and permanent changes in product
prices played an important role in this transition and various risk management methods
were developed against financial risks. During this process of change, financial byproducts
like futures, forward, swap and options were commonly used next to traditional
debt instruments (Mısırlıoğlu,2008:66), and over the past years we have been confronted
with warrants as structured financial instruments.
The aim of this paper is to analyse the accounting of warrant transactions of
intermediary institutions in Turkey and to provide information on warrants as new
financial instruments.
Warrants are capital market instruments with security values which provide the right to
purchase or sell an underlying stock or indicator at a specific price within a certain time
and with which these rights are used for book delivery or cash settlement
(http://borsaistanbul.com/docs/urunler/varant.pdf?sfvrsn=0). An investor buying a warrant
purchases the right to sell or buy the underlying stock, but not the underlying stock itself
in return for the payment he/she made. Warrants are securizations of option contracts and
are quoted on the stock exchange and are marketised. The trading of warrants in
secondary markets is realised as with other securities (Akbulut, 2012:185).
Warrants are products with securization option characterstics and which are
classified as structured products. Warrants are issued based on a financial asset or
indicator. These financial instruments, with the right to buy and sell warrants, are called
“underlying” assets. The “underlying asset”, giving the right to buy and sell warrants, may
consist of a single share or a basket of more than one shares. These shares can be chosen
from the shares placed in the BIST 30 Index and transacted in the Istanbul Stock
Exchange Share Market. (http://borsaistanbul.com/urunler-ve-piyasalar/urunler/aracikurulus-varantlari/varantlara-yatirim).
The first warrants in Turkey were issued by the
Deutsche Bank on 13.08.2010 and the Deutsche Bank, ĠĢ Yatırım, Türkiye Sinai
Kalkınma Bankası and Erste Group are now present in the warrant market as issuers.
Dudley stated in his work that warrants are, one of capital market instruments,
date back to the 1900s (Dudley, 1972: 1422).
Intermediary firms warrants, which are defined as structured instruments and
form one of the types of warrants, are said to have come up and to have been traded in the
1920s for the first time. ( http://www.stockhouse.com/Columnists/2008/August/213/Abrief-history-of-warrants)
.
Freeman (1992) mentions that the various types of warrants can be used in
various ways and that they bear similarities with options in terms of buying and selling
warrants (Freeman, 1992: 224) .
Tanrıöven (2000) underlines the issue and accounting of warrants and explains
that warrants can form a balance between the debt and equity capital and help borrowing
with low interest rates, and concludes that with their usage when no capital is necessary
for the firm will lead to an increase in the number of equities and dilute equities and thus
cause a redundant equity capital accumulation. He further stresses that firms need to
predict the future when issuing warrants (Tanrıöven, 2000: 181). Hanke and Pötzelberger (2002) state that firms issuing warrants are affected in
terms of equity price processes (Hanke ve PÖTZELBERGER, 2002:70).
Eberhart (2005) stressed two major points in his paper. The first is that warrants
are an important derivative instrument in economic terms for firms, and the second is that
investors should take long term positions in warrants and the risks for investors should be
reduced (Eberhart, 2005:2418).
In his paper written in 2006, Emre concentrates on the factors affecting the
prices of warrants, the pricing of warrants and their risks, and concludes that the required
legal and technical infrastructure was formed in our country for the transaction of
warrants which were already traded in the stock exchanges of the developed world (Emre,
2006:25).
Temple (2007) emphasizes in his book that the types, issuing and evaluation of
warrants, which are not presented in many soures, and also points to the
similarities/differences of options (Temple, 2007:142).
Özkan (2008) presents in his paper the advantages and disadvantages of
warrants, the similarities and differences between the warrants themselves and between
warrants and options, and mentions that warrants have a protecting characteristic for
investors against price changes of warrants in spot markets (Özkan, 2008: 23).
Adıgüzel (2010) gives detailed information on the various aspects of
partnership warrants, intermediary firms warrants, the differences between warrants and
options by referring to the bulletin of SPK Volume III No:36 and Volume III No:37, and
at the same time explains the legal characteristics of warrants (Adıgüzel, 2010: 229).
Xiao, Zhang, Xu, Xili and Zhang (2011) mention in their work called “The
Valuation Of Equity Warrants In A Fractional Brownian Environment” that it is a right to
buy an equity warrant at a certain time for a certain price, and that the the transaction
volume of short-term equities is high. Furthermore, they state that there are two types of
equtiy warrant as the European and American types and that the ownership and trade of
these two types is different, the European type warrants can be used at their expiry date
whereas the American-type warrants can be used as wished until the expiry date (Xiao,
vd, 2011:1748).
The increase in financial instruments in our county over the past years led both
to new laws and to new accounting regulations.
The issuing of warrants, persons entitled to issue warrants, and basic principles
for their recording and their trading were determined with the bulletins of SPK (capital
market board) Vol III No 36 “Ortaklık Varantlarının Kurul Kaydına Alınmasına ve Alım
Satım ĠĢlemlerine ĠliĢkin Esaslar Tebliği” and Vol III No 37 “Aracı KuruluĢ Varantlarının
Kurul Kaydına Alınmasına ve Alım Satım ĠĢlemlerine ĠliĢkin Esaslar Tebliği”. The SPK
issued a bulletin Vol VII-128.3 called “Varantlar ve Yatırım KuruluĢu Sertifikaları
Tebliği” on the 10.09.2013 dated 28761 numbered Official Gazette in order to simplify
regulations and to collect the partnership warrants and intermediary firm warrants under
one bulletin.
On the other hand, the TMSK (Turkish Accounting Standards Board) issued
TMS- Turkish Accounting Standards 32: “Finansal Araçlar: Sunum” ve TMS 39:
“Finansal Araçlar : MuhasebeleĢtirme ve Ölçme” in 2006, and TFRS- Turkish Financial
Reporting Standards 7: “ Finansal Araçlar: Açıklamalar” in 2007, and TFRS 9: “Finansal
Araçlar” in 2010. These standards include the presentation of financial instruments, their
classification, measurement and explanation. This paper includes the accounting of warrants which gain more and more
importance with the opportunities the create, and takes into consideration the regulations
of the SPK and Intermedary Firm Chart of Acounts;
-accounting of buying-selling transactions of warrants on behalf of the customer
in the intermediary firm warrants,
-accounting of buying-selling transactions of warrants on behalf of the the
intermediary firm itself for intermediary firm warrants.
-samples for accounting of reimbursement transactions for intermediary firm
warrants.
For the accounting of warrants and the transfer to financial charts, it is required
that accounting standards, regulations of the SPK and Intermediary Firm Chart of
Accounts are taken into consideration, and to overcome shortcomings in regulations for
the mutual accounting transactions in the sector, where relatively few firms are active at
the moment

Keywords

Warrant, Intermediary Firm Warrant Transactions, Accounting of Intermediary Firm Warrant Transactions

ARACI KURULUŞ VARANT İŞLEMLERİNİN MUHASEBELEŞTİRİLMESİ

Abstract

Türk sermaye piyasası uzun yıllar sınırlı sayıda yatırım araçları ile faaliyetlerini sürdürmüştür. Fakat son zamanlarda türev ürünlerinin kullanımı ülkemizde de giderek artmıştır. Türev ürünlerinin kullanımı hızlı bir şekilde yayılmakla birlikte, kamuoyunun bu ürünler hakkında yeterli bilgiye sahip olmadığı görülmektedir. Bu nedenle, sermaye piyasalarının finansal piyasalarda ki payının artırılması amacıyla yapılan çalışmalar kapsamında yatırım araçlarının çeşitlendirilmesine yönelik girişimler de gün geçtikçe önem arz etmektedir. Sermaye Piyasası Kurulu’nun son yıllarda yaptığı bu çalışmalardan biri de varantlardır. Varantlar kısaca, kaldıraç sağlayarak yatırım yapma imkanı veren, hak kullanma üzerine kurulan menkul kıymetleştirilmiş bir opsiyon modelidir. Bu çalışmanın amacı; yeni bir finansal araç olan varantlar hakkında bilgi vererek, Türkiye’deki aracı kurum varantlarının muhasebeleştirilmesini incelemektir.

Keywords

Varant, Aracı Kuruluş Varant İşlemleri, Aracı Kuruluş Varant İşlemlerinin Muhasebeleştirilmesi