UPDATE 2-Istanbul exchange to choose partner in Q3 before listing-chairman
* Bourse aims to finalise partnership deal by end Q3
Stock market listing expected in 2016
* Turkey promoting Istanbul as regional financial hub
By Seda Sezer and Asli Kandemir
ISTANBUL, June 24 (Reuters) - State-owned Bourse Istanbul will choose one of the exchanges bidding to buy into it at the end of the third quarter and will be ready to list its shares in early 2016, chairman Ibrahim Turhan told Reuters.
The listing is a major part of Turkey's ambitions to make Istanbul a regional financial hub.
The exchange is also in separate talks with Euroclear, which operates the world's biggest bond-settlement system, for opening trade of Turkish debt to international investors, Turhan said.
Turkey has merged the Istanbul Stock Exchange, Gold Exchange and Derivatives Exchange into Bourse Istanbul ahead of the planned privatisation as it seeks to attract growing trade from the world's leading investment banks and brokers.
"We talked to all technology provider bourses on a global scale. We received non-binding bids and all of them have their own characteristics ... We are about to start negotiating," Turhan said in an interview late on Friday.
Turhan said in May that talks were continuing with international groups including Deutsche Boerse, the CME Group, owner of the Chicago Mercantile Exchange, Nasdaq and the London Stock Exchange (LSE).
Deputy Prime Minister Ali Babacan also said in May that Turkey was in talks with the LSE and Nasdaq about strategic partnerships with Bourse Istanbul.
Bourse Istanbul has said the state will retain a 49 percent stake but will divest up to 41 percent, part of it through a listing. The remaining 10 percent is held by other investors.
Working with Euroclear could allow Bourse Istanbul to boost the volume of trade. Once Euroclear begins the direct clearing of Turkish debt, it would allow foreign access without the need for a local brokerage account.
Turhan said that Turkey needed to first resolve technical issues on tax compliance to work with the Belgian-based financial services company and that could occur within six months.