Turkiye’s newly formed Fund Coordination Board announced progress on regulatory reforms aimed at stabilizing the investment fund sector following recent market disruptions involving approximately $20 billion in assets. The board, established last week and chaired by Vice President Cevdet Yılmaz, reported ongoing efforts to finalize draft amendments to the Capital Markets Law, directing relevant institutions to complete the proposed changes swiftly.
The market turmoil began last month amid suspected price manipulation in several thinly traded stocks, leading to significant losses and increased redemption pressures at multiple investment funds. Authorities ordered the liquidation of over 100 funds in mid-September, affecting nearly half a million investors. These funds collectively hold assets valued at around $20 billion.
At a Friday meeting, the board reviewed the impact of measures already implemented and considered additional steps to support investors and restore confidence. The Directorate of Communications released a statement outlining the discussion, which included a review of secondary regulations and a payment timetable related to decisions made by the Capital Markets Board (SPK) on Wednesday.
The SPK has initiated interim payments to investors in funds designated for closure. Investors with a net investment below 1 million Turkish lira (approximately $20,404) will receive their full net amounts, while those with investments of 1 million lira or more will receive an interim payment capped at 1 million lira. The disbursement process will begin with money market funds.
The statement emphasized that the forthcoming amendments, which have been under development for some time, are intended to strengthen market regulation without imposing additional burdens on citizens. The problem has been characterized as confined to a specific segment of the fund market, and authorities pledged to continue addressing it promptly and effectively in accordance with capital markets regulations, with a focus on fairness and equity.
The State Supervisory Council (DDK) has also been tasked with examining the situation, further underscoring the government’s commitment to resolving the issue and safeguarding investor interests.