Fund liquidation law takes effect, allowing interim payments up to 1 million lira

Law No. 7596 on Certain Investment Funds Ordered to Be Liquidated, adopted by the Grand National Assembly of Türkiye, was published in the Official Gazette and entered into force. Under the regulation, investors in funds undergoing liquidation may receive interim payments of up to 1 million lira, while claims for fund losses may first be pursued against the portfolio management company and, when necessary, other responsible parties.

Law No. 7596 on Certain Investment Funds Ordered to Be Liquidated, adopted by the General Assembly of the Grand National Assembly of Türkiye on October 22, was published in the Official Gazette dated October 27, issue No. 33413, and entered into force. The provisions of the nine-article law will apply retroactively from September 17, 2026.

The law covers funds whose liquidation was ordered by decisions of the Capital Markets Board (CMB) dated September 17, 2026, and whose liquidation had not been completed when the law was published. Hundreds of thousands of investors are expected to be affected by the regulation.

Interim payments of up to 1 million lira for investors

Under the law, interim payments may be made to investors before the liquidation process is completed. Investors with a net investment amount below 1 million lira may receive that amount, while those with 1 million lira or more may receive a maximum of 1 million lira.

Payments will depend on the fund’s distributable cash resources; this does not mean that every investor will receive an unconditional and immediate payment. If cash is insufficient, the CMB may prioritize payments starting with the lowest net investment amount and may set a minimum interim payment amount. Interim payments will be deducted from the investor’s final liquidation receivable.

Borsa İstanbul (arşiv)

Portfolio management company primarily responsible for fund losses

The law enables the recovery of money, shares, rights and receivables taken from funds through transactions without a genuine economic purpose, without consideration or through sham transactions. The portfolio management company that established or managed the fund will be primarily responsible for the fund’s losses; if the company is unable to pay, claims may be pursued against individuals and legal entities to be designated by the CMB. Resigning from office will not eliminate liability arising from past transactions and decisions.

The CMB will notify the Savings Deposit Insurance Fund (SDIF) of each fund’s losses, the responsible parties and the amounts involved. The SDIF may collect the receivables under the provisions of Law No. 6183 on the Procedure for the Collection of Public Receivables.

Recovered assets to be transferred to investors

Assets determined by a court ruling to have been unlawfully removed from the funds or to have covered fund losses will be transferred not to the Treasury but to the relevant fund or to an account to be opened after liquidation. The SDIF will maintain a separate account for each fund. These resources may be used only for the liquidation of the relevant fund and payments to investors; they may not be pledged as collateral or seized. After liquidation is completed, amounts collected may be distributed through the Investor Compensation Center.

Investors who returned their fund units before the liquidation date and obtained returns above a certain threshold may also voluntarily return the excess amount to accounts to be announced by the CMB. The CMB may also allow fund assets to be sold outside Borsa İstanbul when exchange prices do not reflect their true value.

Investigation continues

The regulation entered into force while investigations into investment funds conducted by the Istanbul Chief Public Prosecutor’s Office were continuing. On October 26, the CMB temporarily suspended the activities of Tera Portföy and Pusula Portföy and ordered the liquidation of the companies’ other funds as well. These funds are not automatically covered by the law.

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Fund liquidation law takes effect, allowing interim payments up to 1 million lira