The "Bill on Certain Investment Funds Ordered into Liquidation" was approved by the Turkish parliament’s Plan and Budget Committee. It will become law once debated and passed by the General Assembly.
The measure covers investment funds whose liquidation was ordered by the Capital Markets Board (SPK) in decisions dated Sept. 17 and that have not been fully wound down when the law is published. It aims to liquidate the funds fairly and transparently, recover assets believed to have been unlawfully extracted, and collect losses from those responsible to pay fund unit holders.
How the interim payments will work
Under the bill, in funds designated by the SPK, investors with a net investment below 1 million liras can receive an interim payment of up to the full amount, while those at or above 1 million liras can receive up to 1 million liras. Except for money market funds, the interim payment cannot exceed the value of the investor’s fund units.
If cash in the funds is not enough to cover all payments, the SPK may start with the investors who have the smallest net investment or set a minimum interim payment for all unit holders. Interim payments will not count as redemption of units, which will be returned during final payments.
No payouts for those involved in manipulation
People found to have engaged in market manipulation or insider abuse, and those who acted together with the funds, will not receive payments from the liquidation and recovery accounts. Liquidation will be carried out by designated institutions under SPK supervision. In committee, motions by the ruling AK Party amended two articles and added provisions for identifying eligible investors by cross-checking records of the Central Registry Agency, Takasbank and other institutions.
The bill follows losses suffered by investors in what has become known as the "fund crisis." On the same day, Treasury and Finance Minister Mehmet Şimşek authorized an investigation into former SPK Chairman İbrahim Ömer Gönül over the oversight of the funds.
