The General Assembly approved the first five articles of a bill concerning certain investment funds whose liquidation was ordered by decisions of the Capital Markets Board (CMB) dated September 17, 2026, and whose transactions had not been completed when the regulation was published.
The regulation aims to establish procedures and principles for the fair, transparent and effective liquidation of these funds, the recovery of assets unlawfully removed from fund assets, the collection of resulting losses and damages from those responsible, and the payment of recovered assets to fund unit holders.
The provisions of the bill will not establish a general or permanent liquidation and liability regime for investment funds other than those specified in its scope. The regulation also defines the scope of certain terms and abbreviations.
CMB oversight during liquidation
The liquidation of the funds will be carried out by entities assigned to the task under the supervision and oversight of the CMB. The Board will be authorized to determine the stages of liquidation, the identification and conversion of fund assets into cash, valuation methods, the identification of fund unit holders, interim and final payments, the order of distribution, and other implementation principles.
Entities assigned to conduct the liquidation will exercise due care to obtain the highest possible economic value, taking into account investors’ interests, market conditions for the relevant assets, the structure of fund portfolios, the protection of fund assets and the common interests of fund unit holders.
If it is determined that the price formed on the exchange does not reflect the actual value or delays the liquidation, temporarily different price margins may be applied through methods such as buybacks, sell-out rights to the controlling shareholder, bulk sales and special transaction notifications. The CMB may also approve the sale of relevant assets outside the exchange at the request of the entities assigned to conduct the liquidation.
In sales conducted on or outside the exchange, investors who purchase the assets may be prohibited from selling them on the exchange for a certain period or from engaging in transactions that would result in their sale.
Information disclosure and fund unit ownership
Amounts collected during the liquidation process will be transferred to the liquidation estate after mandatory expenses incurred for the management and liquidation of the fund have been deducted. Amounts collected after completion of the liquidation will be included in the recovery account in a way that does not result in duplicate payments.
Central Registry Agency Inc., Takasbank, Borsa İstanbul Inc., the Banks Association of Türkiye, entities assigned to conduct the liquidation, portfolio management companies, portfolio custodian institutions, other capital markets institutions, and public institutions and organizations will be required to provide the CMB, the Investor Compensation Center and the Savings Deposit Insurance Fund with the necessary information and documents without delay upon request. These entities may not refuse to provide information by citing confidentiality and secrecy provisions in their specific legislation.
Fund unit ownership will be determined on a fund-by-fund and account-by-account basis by the entities assigned to conduct the liquidation, after reconciliation with the records of the Central Registry Agency.
A motion approved by the General Assembly aims to include in the liquidation those whose units were blocked because instructions submitted to the Türkiye Electronic Fund Trading Platform on behalf of unit holders could not be executed due to the fund’s default or failure to announce a price. Accordingly, those whose units were blocked in connection with instructions submitted to TEFAS on or before September 17, 2026, that could not be executed for these reasons will be able to benefit from the liquidation provisions of the regulation.
Payments and investors’ net amounts
No payments will be made from the liquidation and recovery accounts of funds whose liquidation was ordered by the CMB’s decisions dated September 17, 2026, to individuals or institutions determined to have committed market abuse, insider trading or market manipulation, or to have acted in concert with these funds.
If the distributable cash obtained by converting the fund assets into cash does not cover the total amount calculated on the basis of the fund unit price valid at the end of the day preceding the liquidation decision and the number of participation units used as the basis for payment, the investor’s net investment amount will be calculated according to certain principles.
This calculation will take into account the cash inflows made by the fund unit holder into the fund and the cash outflows received from the fund. The amounts will be adjusted on a pro rata daily basis until the liquidation date, using the arithmetic average of the changes in the consumer price index and domestic producer price index announced by the Turkish Statistical Institute. If the inflow amount exceeds the outflow, outflows will be deducted using the first-in, first-out method.
For funds to be determined by the CMB, investors whose net investment amount is below 1 million liras may receive an interim payment up to that amount, while investors whose net investment amount is 1 million liras or more may receive an interim payment of no more than 1 million liras. Interim payments will be offset against the net investment amount and, except for money market funds, may not exceed the total value at the end of the previous day of the fund participation units in the relevant investor’s account.
If the distributable cash is insufficient to cover all net investment amounts or interim payments, the CMB may decide to make payments starting with the investor with the lowest net investment amount, so that the greatest possible number of investors can benefit fully from the available funds. The Board may also set a minimum interim payment amount applicable to all fund unit holders.
No investor may receive a payment exceeding the rights and receivables determined as of the calculation date or the end of the day preceding the liquidation date, or exceeding the 1 million-lira interim payment cap. Participation units will not be redeemed in exchange for interim payments; the units will be redeemed during the final liquidation payments.
Individuals who received payment by returning their participation units to the fund before the liquidation date may voluntarily return to accounts to be announced by the CMB any gains exceeding the amount calculated according to the indexation principles. Individuals who gained from units held in the fund assets and covered by the relevant provisions of law by the CMB may also voluntarily deposit their excess gains into the general share return account under certain conditions.
In the final payment, payments previously made to the fund unit holder from the liquidation estate, the recovery account or through other legal means will be offset.
Unlawfully removed assets and liability
The regulation also defines the scope of assets unlawfully removed from fund assets and liability for the resulting damages and losses.
Money, capital market instruments, goods, rights and receivables transferred from fund assets in violation of legislation, or through transactions that are formally compliant with legislation but lack a genuine economic purpose serving the fund’s interests, or through gratuitous or sham transactions, will be considered unlawfully removed assets. Transfers made through transactions such as loans, debts, advances, guarantees, transfers, assignments, purchases, sales, repos and reverse repos for the benefit of related parties, controlling shareholders, managers, persons directly or indirectly controlled by them, or other third parties will also fall within this scope.
The portfolio management company that founded or manages the fund will bear primary responsibility for the resulting damage or loss. If the damage cannot be recovered from that company in whole or in part, or it is clearly understood that recovery is not possible, the individuals and legal entities determined by the CMB to be responsible, as well as those found to have acted in concert with them, may be held personally liable.
Leaving office will not eliminate liability for transactions carried out during the relevant period of service or while management and control were held.
SDIF’s collection and enforcement authority
Except for provisions concerning confiscated and seized assets, the CMB will notify the Savings Deposit Insurance Fund of the amount of damage or loss, the responsible individuals and legal entities, and the amounts of their liability for each fund, taking into account the liquidation procedures and the results of audits and examinations.
Upon notification by the CMB, the Savings Deposit Insurance Fund will initiate collection and enforcement proceedings under the Law on the Procedure for the Collection of Public Receivables to recover funds from the assets of those responsible. The Savings Deposit Insurance Fund may act within the framework of the relevant law and the Banking Law. Istanbul administrative courts will have jurisdiction over lawsuits to be filed under the regulation.
