Since September 2026 Turkey’s capital markets have been dealing with two linked events: the collapse and liquidation of 131 investment funds, and a criminal investigation into alleged market manipulation in listed shares bought by those funds. Foreign institutions are among those affected; on 22 October 2026 Norway’s sovereign wealth fund said it was among the investors harmed and that it was reviewing its Turkish holdings and external managers. This guide brings together our English-language analyses for foreign pension funds, sovereign funds, asset managers and their counsel. It explains what happened, which legal regime applies to each type of exposure, the deadlines that run against investors, and where to find the detailed guide for each route: disclosure and prospectus liability under the Capital Markets Law, tort claims against manipulators, participation in the criminal case, the fund liquidation regime under Law No. 7596, investor compensation for failed intermediaries, and the procedural rules for foreign claimants. It reflects public information and the legislation in force as at 25 October 2026.

What happened: a short timeline

Our full analysis of the Norwegian fund’s statement, including what the circulating figures do and do not measure, is in Norway’s Wealth Fund and Turkey’s Market Manipulation Crisis.

Which situation are you in?

The legal regime depends on how the investor was exposed. The same institution can be in more than one situation at once.

Shareholders of affected listed companies

Most foreign institutions were exposed as shareholders of listed companies, not as fund unit holders. Their losses arose in their own portfolios when share prices collapsed, and the fund liquidation law does not compensate them. Their remedies lie in the general law:

• Disclosure and prospectus liability. The issuer is primarily liable for a misleading prospectus; the offerors, lead intermediary, guarantor and board members follow according to fault where the issuer cannot pay (Capital Markets Law Art. 10). For all public disclosure documents, the signatories and the entities they sign for are jointly and severally liable, causation is presumed in qualifying cases, disclaimers are void, and the claim is barred six months after the loss (Art. 32).
• Tort claims against manipulators. Anyone who causes loss by a culpable and unlawful act must compensate it (Turkish Code of Obligations Art. 49); those who cause the same loss are jointly and severally liable (Art. 61); the claim is barred two years from knowledge and ten years from the act, or eight years where the act is market manipulation, because of the longer criminal limitation period (Art. 72; Turkish Criminal Code Art. 66(1)(e)).
• Directors and auditors. The Turkish Commercial Code provides claims against those who prepared false documents and statements, against board members and managers who breach their duties, and against auditors (Arts. 549, 553, 554), with joint liability according to fault (Art. 557) and limitation of two years from knowledge and five years from the act, or the longer criminal period (Art. 560).

Investors that still hold shares can also use their rights at general meetings, including refusing to release directors, challenging resolutions within three months and exiting significant transactions at a fair price, as explained in Shareholder Rights in Turkish Listed Companies after the 2026 Crisis.

How the amount of these claims is calculated, including default interest from the date of the act and loss exceeding default interest, is explained in Calculating Damages in Turkish Securities Claims.

Unit holders in the liquidated funds

Foreign individuals and companies holding units in the liquidated funds through Turkish intermediaries are treated in the same way as Turkish investors. According to the reported text, Law No. 7596 applies to the funds SPK ordered into liquidation on 17 September 2026 whose liquidation was not complete when the law is published, provides for interim payments of up to TL 1 million per investor per fund on an inflation-adjusted net-investment basis, bars payments to persons SPK finds to have committed market-disrupting acts, insider dealing or manipulation together with the funds, and makes the portfolio management company primarily liable for fund losses, followed by the persons SPK identifies, with collection by the Savings Deposit Insurance Fund (TMSF). Two general rules of the Capital Markets Law continue to apply alongside the new law. A fund’s assets are separate from those of its portfolio management company and its custodian; they cannot be attached, even for public receivables, made subject to interim injunctions or included in a bankruptcy estate, even where the management of those companies has been transferred to public bodies, and on liquidation payments may be made only to unit holders (Art. 53). The custodian must ensure that units are issued and redeemed, unit prices are calculated and portfolio transactions are carried out in accordance with the legislation and the fund rules (Art. 56(1)); it is liable to the portfolio management company and to unit holders for losses caused by failing in those obligations, and unit holders keep their own right to sue (Art. 56(2)–(3)). Our detailed guide is Turkey’s 2026 Fund Liquidation: Legal Guide for Foreign Investors and Companies.

Clients of suspended brokerages

SPK has stopped the activities of several brokerages during the crisis. For their clients, two rules of the Capital Markets Law matter most.

First, client assets are segregated. Cash and capital market instruments held by investors at investment firms, in whatever capacity, are monitored separately from the firm’s own assets and may not be used for the firm’s or third parties’ benefit without the investor’s express written consent (Art. 46(5)). They cannot be attached for the firm’s debts, even for public receivables, cannot be pledged without the investor’s prior written consent, cannot be included in the firm’s bankruptcy estate and cannot be subjected to interim injunctions (Art. 46(6)). Client cash at banks is kept in separate accounts and cannot be used as collateral for the firm (Art. 46(7)).

Second, the Investor Compensation Center (Yatırımcı Tazmin Merkezi, “YTM”) compensates investors of firms for which SPK has made a compensation decision. Compensation covers claims arising from the firm’s failure to pay cash or deliver capital market instruments held or managed for the investor (Art. 84(1)). Losses from investment advice or from price movements are not covered (Art. 84(2)), so YTM does not compensate manipulation losses as such. Claims of investors convicted of insider dealing, manipulation or laundering are excluded to the extent of the related receivables, and payments to persons subject to criminal complaints for those offences are suspended until the judgment becomes final (Art. 84(3)). Claims are made to YTM in writing and are time-barred one year after the compensation decision is announced (Art. 85(1)); YTM must pay within three months of determining the beneficiaries and amounts, extendable by up to three months with SPK’s approval (Art. 85(2)).

If a brokerage, an issuer or a bond issuer goes further into concordat, gradual liquidation or bankruptcy, the deadlines become very short: seven days to object to a provisional concordat moratorium, fifteen days to file claims with the commissioner and one month to register claims in a bankruptcy (Enforcement and Bankruptcy Law Arts. 288(2), 299 and 219). These procedures are explained in When a Turkish Issuer or Broker Becomes Insolvent.

The criminal process

Market manipulation is punishable by three to five years’ imprisonment and a judicial fine (Capital Markets Law Art. 107). Investigations into capital markets offences require a written application by SPK, which then becomes a participating party when the indictment is accepted (Art. 115). Before any criminal case, SPK can impose trading bans and other measures on persons reasonably suspected of manipulation, insider dealing or market-disrupting acts (Art. 101). These rules are explained in Market Manipulation under Turkish Law. Trading on non-public information is a separate offence, explained in Insider Dealing in Turkey: Capital Markets Law Article 106.

Investors harmed by the offence may file complaints, request evidence, have their lawyer inspect the investigation file and obtain copies, object within two weeks to a decision not to prosecute, join the prosecution as participating parties until judgment at first instance, and appeal independently (Criminal Procedure Code Arts. 153, 158, 173, 234, 237, 242 and 260). The criminal court does not award damages, but the criminal file is usually the best evidence for the civil claim, and seized assets may be a source of recovery, because proceeds of an offence are confiscated only where they cannot be returned to the victim (Turkish Criminal Code Art. 55(1)). See Joining a Criminal Case in Turkey as a Foreign Investor.

Who may be liable

The parties a foreign investor can claim against depend on the route. The Capital Markets Law sets out who is responsible for disclosure; the general law covers those who manipulated prices or mismanaged companies and funds.

Claims against board members, managers and audit firms, including the difference between an investor’s own loss and loss suffered by the company, are explained in Suing Directors and Auditors of Turkish Listed Companies.

Identifying defendants is also a question of solvency. A claim against an issuer whose share price has collapsed, or against individuals whose assets have been seized in the criminal investigation, may be valid but slow to recover. This is why the criminal file, the seizure orders made in it and the rule that proceeds of an offence are returned to victims before confiscation (Turkish Criminal Code Art. 55(1)) matter to civil claimants.

First steps for an institutional investor

1. Map the exposure. List every affected position by vehicle, account and custodian, with trade dates, prices and quantities, and match it against the shares, persons and periods named in SPK bulletins and against issuer announcements on the Public Disclosure Platform (KAP).
2. Diarise the deadlines. Start with the six-month period for disclosure claims (Capital Markets Law Art. 32(6)), the two-week period for objecting to a decision not to prosecute (Criminal Procedure Code Art. 173(1)) and the sixty-day period for challenging administrative decisions (Law No. 2577 Art. 7).
3. Preserve evidence. Request trading and custody records from brokers, custodians and external managers. Where evidence is at risk of being lost, Turkish courts can order its preservation before any claim is filed (Code of Civil Procedure Art. 400); during proceedings, a party can ask the court to order the other side or a third party to produce documents (Art. 220). See Obtaining and Preserving Evidence in Turkey for Securities Claims.
4. Secure assets. Where defendants may move assets, a precautionary attachment can be obtained before any lawsuit and without hearing the debtor, against security; it lapses unless execution is requested within ten days and the lawsuit or enforcement follows within seven days (Enforcement and Bankruptcy Law Arts. 257–264). See Freezing Assets in Turkey for Investor Claims.
5. Prepare the power of attorney. It must be notarised (Art. 76) and expressly cover settlement and mediation, among other special powers (Art. 74); if signed abroad, it is apostilled where the Apostille Convention applies.
6. Engage with the criminal file. A complaint can be filed with the prosecutor (Criminal Procedure Code Art. 158); the lawyer can then ask to inspect and copy the investigation file (Art. 153), subject to any restriction order.
7. Check the procedural route. Where mandatory mediation applies to a monetary commercial claim, the application suspends limitation (Law No. 6325 Art. 18/A(15)); a partial claim that can be increased once interrupts limitation for the whole claim (Code of Civil Procedure Art. 109(4)).

Deadlines calendar

The table below lists the main time limits. How each period starts, how it is suspended or interrupted, why demand letters and standstill letters do not stop the clock, and how partial claims work after the 2026 reform are explained in Limitation Periods for Investor Claims in Turkey.

The legal map

Rules specific to foreign claimants

Foreign institutions have the same substantive rights as Turkish investors. A few procedural rules apply to them in particular:

• Who may act. Representing others before Turkish courts is reserved to lawyers registered with a Turkish bar (Attorneyship Law Art. 35); foreign law firms established in Turkey may advise only on foreign and international law (Art. 44).
• Power of attorney. It must be notarised (Code of Civil Procedure Art. 76) and must expressly authorise, among other things, settlement and recourse to alternative dispute resolution, including mandatory mediation (Art. 74); signed abroad, it is apostilled where the Apostille Convention applies.
• Security for costs. Foreign claimants must provide security unless exempted on reciprocity (Law No. 5718 Art. 48); the 1954 Hague Convention on civil procedure restricts security imposed solely on grounds of foreign nationality between contracting states.
• Court fees. The judgment fee is 68.31 per thousand of the amount awarded, one quarter in advance (Fees Law No. 492, Art. 28(a) and Tariff 1).
• Applicable law. Torts are governed by the law of the place of the act; where act and loss occur in different countries, by the law of the place of loss, subject to a closer connection and to a choice made after the event (Law No. 5718 Art. 34).

These points are explained in Representing Foreign Institutional Investors in Turkish Capital Markets Disputes. The stages of a lawsuit, from mediation and pleadings to court experts, costs and appeals, are set out in How a Securities Lawsuit Proceeds in Turkey. Whether to sue in Turkey or abroad, and how foreign judgments and awards are enforced in Turkey, is covered in Suing in Turkey or Abroad: Jurisdiction and Enforcement.

All guides in this series

• Norway’s Wealth Fund and Turkey’s Market Manipulation Crisis: What Turkish Law Offers Foreign Institutional Investors — the overview for institutional shareholders
• Prospectus and Disclosure Liability in Turkey: Capital Markets Law Articles 10 and 32 — liability, presumed causation, defences and the six-month limitation period
• Market Manipulation under Turkish Law: Article 107 and SPK Enforcement — the offence, trading bans, market-disrupting acts
• Joining a Criminal Case in Turkey as a Foreign Investor — complaints, file access, objections, participation
• Freezing Assets in Turkey for Investor Claims: Precautionary Attachment, Interim Injunctions and Criminal Seizure — securing assets before judgment
• Can Foreign Investors Bring a Class Action in Turkey? Joint Claims, Consolidation, Association Actions and Assignment — group litigation for foreign investors
• Suing Directors and Auditors of Turkish Listed Companies: Liability under the Commercial Code and the Capital Markets Law — board members, managers and audit firms
• Suing Turkey’s Capital Markets Board (SPK): Challenging Its Decisions and Claiming Compensation for Supervisory Failure — administrative court routes
• Suing in Turkey or Abroad? Jurisdiction and the Enforcement of Foreign Judgments and Arbitral Awards in Turkey — forum choice, reciprocity, New York Convention
• Calculating Damages in Turkish Securities Claims: Loss, Interest and Currency for Foreign Investors — quantum, default interest and excess loss
• Insider Dealing in Turkey: Capital Markets Law Article 106, SPK Measures and Investor Claims — trading on non-public information
• Shareholder Rights in Turkish Listed Companies after the 2026 Crisis: General Meetings, Release, Annulment Actions and Exit Rights — using shareholder rights
• Obtaining and Preserving Evidence in Turkey for Securities Claims: Pre-Action Preservation, Document Production and the Criminal File — building the evidence
• When a Turkish Issuer or Broker Becomes Insolvent: Concordat, Bankruptcy Claims and Client-Asset Protection for Foreign Investors — concordat, bankruptcy and failed brokers
• Claims Against Brokers, Custodians and Portfolio Managers in Turkey: Duties, Liability and Remedies for Foreign Institutional Investors — the intermediaries in the chain
• Concealed Profit Transfers and Controlling Shareholder Liability in Turkish Listed Companies: Capital Markets Law Article 21 and Commercial Code Article 202 — tunnelling and group liability
• Limitation Periods for Investor Claims in Turkey: A Statute-by-Statute Guide to Deadlines for Foreign Institutional Investors — every clock that runs against investors
• How a Securities Lawsuit Proceeds in Turkey: Stages, Court Experts, Costs and Appeals for Foreign Institutional Investors — the litigation process step by step
• Continuous Disclosure in Turkey: Inside Information, Delayed Disclosure, Rumours and Shareholding Notifications under Communiqué II-15.1 — what issuers had to disclose, and when
• Turkish Bond Defaults: Bondholders’ Boards, Restructuring and Enforcement for Foreign Institutional Investors — bonds, bills and restructuring votes
• Representing Foreign Institutional Investors in Turkish Capital Markets Disputes — who may act, powers of attorney, fees, confidentiality
• Turkey’s 2026 Fund Liquidation: Legal Guide for Foreign Investors and Companies — for unit holders in the liquidated funds
• Can Foreign Investors Buy Shares on Borsa Istanbul? — accounts, custody and disclosure
• Legal Guide for Foreign Investors in Turkey (Türkiye) 2026 — the general English-language guide
• Norveç Varlık Fonu “Mağduruz” Dedi — Turkish-language analysis (in Turkish)
• Fon Tasfiyesi Hukuk Rehberi — the Turkish fund liquidation hub with more than 50 guides (in Turkish)
• Fon Krizi Gündemi — day-by-day tracker of the fund crisis (in Turkish)
• SPK Hukuk Rehberi — Turkish capital markets law hub (in Turkish)

Frequently asked questions

Does the fund liquidation law compensate shareholders of the manipulated companies?

No. Law No. 7596 deals with the funds ordered into liquidation on 17 September 2026 and their unit holders. Shareholders of listed companies rely on the Capital Markets Law, the Code of Obligations and the Commercial Code.

What is the shortest deadline for an institutional shareholder?

Six months from the loss for claims based on prospectuses and other public disclosure documents (Capital Markets Law Art. 32(6)). For losses that arose in September and October 2026, the period may end in March or April 2027.

Will the Investor Compensation Center pay for losses caused by manipulation?

No. YTM covers the failure of an investment firm for which SPK has made a compensation decision to pay cash or deliver securities held or managed for the investor. Losses from price movements and investment advice are excluded (Capital Markets Law Art. 84(2)).

Are my securities at a suspended brokerage safe?

Client cash and securities are segregated from the firm’s own assets and cannot be attached for its debts or included in its bankruptcy estate (Capital Markets Law Art. 46(5) and (6)). Their return depends on the firm’s records and the process SPK sets; YTM covers shortfalls where a compensation decision is made.

Can a foreign institution take part in the criminal case?

Yes. Persons harmed by the offence may join the public prosecution as participating parties until judgment at first instance (Criminal Procedure Code Art. 237), and their lawyers may inspect the file (Art. 153(5)).

Can several foreign funds sue together?

Yes, as optional co-plaintiffs where their claims rest on the same or similar facts and legal grounds (Code of Civil Procedure Art. 57). Turkey has no opt-out class action for damages; see Can Foreign Investors Bring a Class Action in Turkey?

Does a civil claim have to wait for the criminal judgment?

No. The civil judge is not bound by the rules of criminal law on liability or by an acquittal, and a criminal court’s assessment of fault and loss does not bind the civil court (Turkish Code of Obligations Art. 74). A civil court may, however, stay its proceedings where its decision depends on the outcome of another case (Code of Civil Procedure Art. 165), and civil limitation periods keep running, so waiting can cost a claim.

Can unit holders sue the custodian of a liquidated fund?

The custodian is liable to unit holders for losses caused by failing in its oversight obligations, and unit holders keep their own right to sue (Capital Markets Law Art. 56(2)–(3)). Whether the obligations were breached depends on the facts of each fund.

Has Law No. 7596 entered into force?

It was approved by parliament on 22 October 2026 and enters into force on publication in the Official Gazette, which had not happened as at 25 October 2026.