Türkiye Sets up Board to Coordinate Fund Liquidations, Protect Investors
- Turkey's Capital Markets Board ordered the liquidation of 131 investment funds with combined assets of $20.4 billion as of September 16, marking the biggest fund crisis in the country's capital markets history.
- Pusula Portfoy triggered broader concerns by reporting the first fund default on September 15, leading to the liquidation order after assets fell 21% to 992 billion lira.
- The 455,758 individual investors face uncertainty as retail-accessible funds account for around 42% of assets due to be liquidated, compared with 58% for funds restricted to qualified investors.
- Following the announcement, the BIST-100 fell 5.5%, while Yeni Party lawmaker Umit Ozlale estimated that investors could recover "only around 10%" of their investments.
- Tera Portfoy's funds account for more than two-thirds of affected assets, and industry experts warned that some assets could lose more than 90% of their stated value during liquidation if sold below market prices.
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38 Articles
Turkey formed a Council chaired by the Vice-President to coordinate and expedite the liquidation of investment funds, following a crisis triggered by unusual movements in equity prices, amid scrutiny to protect the rights of about half a million investors.
According to alleged price manipulations on the Turkish stock exchange, numerous investment funds are in need of payment. The government wants to secure the rights of the affected investors with the board.
The statement released by the Directorate of Communications said, "In order to ensure that the liquidation process is carried out swiftly, while safeguarding the legitimate rights of investors and the public interest, a 'Fund Coordination Board' has been established under the chairmanship of the Vice President to provide overall coordination."
Following the fund investigation, Erdoğan, who met with the heads of economic administration and regulatory institutions, announced that a fully authorized board, chaired by the Vice President, had been established to coordinate the process of liquidating the funds, and that the State Audit Board had been assigned this task.
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