Deloitte UK screen 4:3 (19.05 cm x cm) © 2013 Deloitte LLP. All rights reserved. April 2013 Parameters of Competition for a Turkish International Financial Centre Tom Shave

Deloitte UK screen 4:3 (19.05 cm x cm) © 2013 Deloitte LLP. All rights reserved. International Financial Centre Parameters of Competition 2 ParameterDescriptionAbility to Influence Skilled Labour Force Appropriately skilled labour force is the most important factor in developing an IFC, but is difficult to achieve in a short timescale. A community of professionals advisors that have the standards required in international financial services is essential. Revenue Generation Potential Regardless of the quality of an IFC’s environment, international financial institutions will seek real revenue generating opportunities from an IFC. Therefore, identifying and developing the appropriate revenue growth strategies, whether domestic, regional or international is key. Image/ Reputation Appropriate international branding and marketing is vital in building momentum for a developing IFC. Legal environment A reliable, flexible and efficient legal system is a critical component for any successful IFC. As a general rule of thumb common law (based on case law) rather than civil law is more flexible in dealing with the demands of a dynamic financial services industry.

Deloitte UK screen 4:3 (19.05 cm x cm) © 2013 Deloitte LLP. All rights reserved. International Financial Centre Parameters of Competition 3 ParameterDescriptionAbility to Influence Political stability A stable political environment is critical in order to attract international finance, but can be difficult to influence. Assuming a certain level of political stability exists, other factors should receive greater attention. Regulatory environment The presence of a fair, consistent and independent regulatory regime is important to maintain the confidence of the market participants. Often, responsiveness and commercial awareness can be key differentiators for IFC regulators. Ease of doing business This is generally perceived to be a broad measure of a variety of factors that can impact the ability to conduct business in an IFC. It can include administrative burdens for establishing businesses, labour freedoms, clarity of business rules and corruption. Fiscal environment An attractive fiscal regime remains a desirable feature for IFCs, even despite the recent focus on international tax policy. This is not the same as zero, or abnormally low, tax.

Deloitte UK screen 4:3 (19.05 cm x cm) © 2013 Deloitte LLP. All rights reserved. International Financial Centre Parameters of Competition 4 ParameterDescriptionAbility to Influence Location & proximity The location is likely to be an important influencing factor on the type of activities undertaken in the IFC. A cluster effect may exist for IFCs located near growing economic regions whereas isolated IFCs will need to serve an international market. Infrastructure This covers a variety of aspects such as telecommunications, data management and security, real estate planning, and transport access. Poor infrastructure can act as a constraint on longer term growth for IFCs. Lifestyle In a similar way to image this is a relatively subjective dimension of competition, but does impact the ability of an IFC to attract high-calibre financial services professionals. Cost of doing business Given the current economic climate the operating costs for financial institutions, including real estate and labour, can impact location decisions. However, generally more developed IFCs have higher costs so a competitive advantage can be gained for some emerging IFCs.

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