Turkish Investment Fund Rules: Communiqués III-52.1, III-55.1 and III-56.1 on Investment Limits, Hedge Funds, Manager and Custodian Duties

The 131 investment funds that SPK ordered into liquidation on 17 September 2026 were set up and run under a detailed rulebook. A Turkish investment fund has no legal personality: it is a pool of assets held on fiduciary ownership, set up by a portfolio management company through an internal regulation and kept by a separate custodian (Capital Markets Law Art. 52). The Communiqué on Investment Funds No. III-52.1 sets investment limits (for example, no more than 10 per cent of a fund in one issuer and no more than 10 per cent of an issuer’s capital or voting rights held by one fund), pricing and dealing rules, the rules for suspending dealing and the grounds for termination. Hedge funds (serbest fonlar), which may be sold only to qualified investors, are exempt from the portfolio limits but must invest within the strategy and limits published on their KAP page. The Communiqué No. III-55.1 lists the portfolio management company’s duties to unit holders, including never buying for a fund above market value, basing every investment decision on reliable reasons and documents, and acting for the fund whenever its own interests conflict. The custodian must check pricing, dealing and portfolio compliance and is liable to the manager and to unit holders for losses caused by its failures (Art. 56). This guide explains these rules and the claims they give unit holders and other investors. It reflects the legislation in force as at 25 October 2026.

Why fund rules matter in the 2026 crisis

On 17 September 2026 the Capital Markets Board (SPK) closed to trading the funds of seven portfolio management companies and ordered 131 of them into liquidation. The payment tracks, the interim payment and the bill on the liquidated funds are explained in our guide to Turkey’s 2026 fund liquidation. That guide looks at what investors will be paid. This guide looks at the rules the funds, their managers and their custodians had to follow, because those rules are the yardstick against which conduct will be measured in any claim, regulatory examination or criminal case.

Three groups of foreign investors are affected. Unit holders in the liquidated funds, who are treated in the same way as Turkish investors, need to know what the manager and the custodian owed them. Shareholders in listed companies whose shares the funds bought need to know which concentration limits and trading rules applied, because a fund’s buying can move prices and the rules say how much a fund may hold and how it may trade. Institutions whose external managers used Turkish funds need to know what due diligence the rules make possible. In each case the starting point is the same body of law: Articles 52 to 56 of the Capital Markets Law No. 6362 and three SPK communiqués.

This guide does not suggest that any fund, manager or custodian breached these rules. Whether any rule was breached in a particular fund is a question of fact for SPK, the courts and, where relevant, the criminal authorities.

The legal framework

The Capital Markets Law sets the structure of investment funds (Art. 52), the separation of fund assets (Art. 53), SPK’s rule-making powers (Art. 54), the portfolio management company (Art. 55) and portfolio custody (Art. 56). SPK has used its powers in three main communiqués, each available in consolidated form on the official legislation portal.

Communiqué III-52.1 does not apply to exchange-traded funds, real estate investment funds or venture capital investment funds, which have their own communiqués (III-52.1 Art. 1(2)). The funds in the 2026 cases were traded on the central fund distribution platform (TEFAS); whether a particular fund was a hedge fund or another type must be checked from its own documents, because the applicable limits differ.

How a Turkish investment fund is structured

An investment fund is a pool of assets without legal personality, set up by a portfolio management company through a fund internal regulation, to operate a portfolio of assets and rights determined by SPK, with money or other assets collected from investors in return for units, on behalf of the investors and on the basis of fiduciary ownership (Capital Markets Law Art. 52(1)). Four features follow from this definition.

1. 1. The manager acts in its own name for the fund’s account. The portfolio management company represents the fund, manages it or supervises its management so as to protect unit holders’ rights, and is authorised to dispose of the fund’s assets in its own name and for the fund’s account in accordance with the legislation and the internal regulation (Art. 52(3)).
2. 2. Mandate rules fill the gaps. Where the Law, the legislation and the internal regulation are silent, Articles 502 to 514 of the Turkish Code of Obligations on the mandate contract apply by analogy to the relationship between the manager and unit holders (Art. 52(4); Communiqué III-52.1 Art. 9(3)).
3. 3. A custodian is a precondition. A fund can be authorised only if the founder has an agreement with an institution authorised by SPK to provide portfolio custody and SPK has approved the internal regulation (Art. 52(2)).
4. 4. Limited legal personality for registries. For land registry, trade registry and other official registry transactions, and for company formation, capital increase and share transfer transactions in companies in which it becomes a shareholder, the fund is deemed to have legal personality; registry transactions in the fund’s name are signed jointly by authorised persons of the manager and the custodian (Art. 52(5)).

Funds are organised under umbrella funds. All funds whose units are issued under a single internal regulation form an umbrella fund; each fund under it needs its own prospectus and key investor information form, and the assets and liabilities of each fund are separate (Communiqué III-52.1 Art. 4(1) and (3)). The type of umbrella fund determines what at least 80 per cent of each fund must be invested in, for example debt instruments, shares or precious metals; there are also money market, participation, variable, hedge, guaranteed and protection umbrella funds (Art. 6(1)). The founder is a portfolio management company; the “manager” is the portfolio management company approved by SPK to manage the fund (Art. 3(1)(m) and (ü)).

Segregation of fund assets

The fund’s assets are separate from the assets of the portfolio management company and the custodian (Capital Markets Law Art. 53(1); Communiqué III-52.1 Art. 5(1)). They may not be given as security or pledged, except for borrowing, derivatives, short sales or similar transactions entered into for the fund’s account and provided for in the internal regulation. Even if the management or supervision of the manager or the custodian is transferred to public bodies, fund assets may not be used for any other purpose, may not be attached, including for public receivables, may not be subject to an interim injunction and may not be included in a bankruptcy estate (Art. 53(2)). In a liquidation, payments may be made only to unit holders (Art. 53(3)). The manager’s debts to third parties may not be set off against the fund’s receivables from the same third parties (Art. 53(4)).

This protects unit holders against the manager’s or custodian’s creditors. It does not protect them against losses in the value of the fund’s portfolio. If the assets the fund bought were overpriced or illiquid, segregation preserves them for unit holders, but cannot restore their value. Claims for that loss lie against those responsible, as explained below. The protection of assets in insolvency more generally is covered in the guide to insolvency, concordat and client assets.

Fund documents and changes

A fund’s “information documents” are the umbrella fund internal regulation, the fund prospectus and the key investor information form (Communiqué III-52.1 Art. 3(1)(c)). Units must be offered to the public, allocated to predetermined persons or sold to qualified investors (Art. 11(1)). Units may be issued only after SPK has approved the prospectus (Art. 11(3)). SPK’s approval does not mean that it guarantees the accuracy of the information or recommends the units (Art. 11(5)).

Changes are controlled. Changes to the internal regulation are approved by SPK and, where they may affect investment decisions, announced on KAP and on the founder’s website with an effective date at least ten business days later (Art. 13(1)). Material changes to the prospectus are approved by SPK and announced in the same way; other changes are made by the founder and reported to SPK each year (Art. 13(2)). Changes to the key investor information form need no approval but must be notified to SPK six business days in advance and announced on KAP (Art. 13(3)). The founder is responsible for publishing on KAP, completely, accurately and up to date, the information and documents that must be published there (Art. 31(4)).

For a unit holder, these documents define the mandate. The investment strategy, the benchmark, the limits and the dealing terms in the prospectus or, for hedge funds, on the fund’s KAP page are the terms against which the manager’s conduct is assessed. Archiving the versions in force on each investment date is therefore the first step in any review.

Investment limits

Funds other than hedge funds are subject to detailed portfolio limits. The most important are in Article 17 of Communiqué III-52.1. Unless the Communiqué provides otherwise, they apply to each fund separately (Art. 4(3)(ç)).

Some limits are adjusted for particular fund types. In sector funds, the single-issuer limit is 20 per cent for issuers in the sector, and the 40 per cent and group limits do not apply (Art. 23(4)). In index funds, the single-issuer, aggregate and linked-issuer limits and the 10 per cent capital limit do not apply to assets included in the index (Art. 23(3)). SPK may set different minimum or maximum ratios by fund type (Art. 24(6)).

Where a limit is breached because of price movements, dividends or rights issues outside the manager’s control, the fund must return to compliance within 30 days. SPK may extend the period if compliance is impossible or would cause great loss; if the founder does not apply or SPK refuses an extension, SPK may require the fund to be converted or liquidated (Art. 24(5)). On its wording, the cure period covers breaches caused by events outside the manager’s control, not breaches caused by its own purchases.

How fund assets must be traded

Assets bought for a fund must be traded on an exchange, and purchases and sales must be made through the exchange; at initial issue, instruments that have been approved for exchange trading may be acquired (Communiqué III-52.1 Art. 19(1)(a)). Contracts that the founder enters into outside the exchange for the fund must be consistent with the fund’s strategy, have counterparties with the required credit rating, be made on objective terms unaffected by any relationship and at a fair price, and be convertible into cash at fair value at the fund’s pricing times (Art. 19(3)). The methods used to ensure fair pricing of such contracts must be set out in the internal regulation and prospectus and disclosed on KAP (Art. 19(4)).

The portfolio management company’s conduct rules add a price discipline that applies to all portfolios it manages: it may never buy an asset for a client portfolio above its market value or sell one below it. For assets traded on the exchange, market value is the exchange price; for others, it is the lowest price for purchases and the highest for sales available for the portfolio on the trading day (Communiqué III-55.1 Art. 33(1)(b)). It must also ensure that the broker executes share trades for the portfolio under the client number (Art. 33(1)(m)), which makes the fund’s trades traceable in the exchange’s records.

Hedge funds (serbest fonlar)

Hedge funds are funds whose units are sold only to qualified investors (Communiqué III-52.1 Art. 6(1)(d)). They are not subject to the portfolio and transaction limits in Articles 17 to 24; since the 2024 amendment, they invest within the investment strategies and limits published on the fund’s KAP page (Art. 25(1)). The exemption is matched by a different set of rules.

• ▸ Qualified investors only. Distributors must ensure that sales are made by staff with adequate knowledge and experience, and must obtain and keep regularly the information and documents showing that buyers are qualified investors (Art. 25(4)).
• ▸ Licensed managers. All portfolio managers of a hedge fund must hold the advanced capital markets licence and the derivatives licence and have the necessary knowledge and experience of such funds (Art. 25(5)).
• ▸ Published limits. Risk limits for futures, options and swaps are published on the fund’s KAP page; if they are exceeded, the founder’s board must take measures and announce them on the KAP page (Art. 25(7)).
• ▸ Thirty days’ notice. Changes to the strategy, benchmark, investment objective, limits, risks, dealing terms, fees and increases in risk limits must be announced on the KAP page at least 30 days before they take effect (Art. 25(8) and (16)).
• ▸ Pricing and redemption. Unit prices must be calculated and notified at least monthly (Art. 25(9)); redemption periods longer than the pricing interval may be set (Art. 25(11)).
• ▸ Responsibility for the KAP page. The founder is responsible for the compliance, consistency, accuracy and currency of the information on the KAP page and for losses caused by false, misleading or incomplete information (Art. 25(14)).

The exemption from portfolio limits does not exempt a hedge fund’s manager from its duties of loyalty and care, from the conduct rules in Communiqué III-55.1, from the ban on concealed profit transfer or from the market abuse rules. A strategy published on a KAP page is a limit in its own right: investments outside it breach the mandate. The prohibitions in the Capital Markets Law on market manipulation and market-disrupting acts are explained in the guides to market manipulation and market-disrupting acts.

Pricing, dealing and suspension

Units have no nominal value. The unit price is total fund value divided by the number of units, and it is the price for purchases and redemptions (Communiqué III-52.1 Art. 14(1)–(3)). Total fund value is the value of the portfolio, valued under SPK’s rules, plus other assets and receivables, minus liabilities (Art. 3(1)(g)). Unit prices are in principle calculated and announced daily (Art. 14(4)). Except in money market and short-term debt funds, orders are executed at the first price calculated after the order is given (Art. 14(5)). Daily dealing is the rule, although SPK may make exceptions by fund type (Art. 15(2)). Valuation and financial reporting follow SPK’s rules, and performance presentation reports must be independently audited within one month after each period (Art. 35).

The Communiqué provides for extraordinary situations. In the event of war, natural disasters, economic crisis, the collapse of communication systems, the closure of the market, exchange or platform on which portfolio assets are traded, computer failures, or the emergence of important information that may affect the company’s financial position, the founder’s board may decide on the valuation principles; the decision must be recorded with its reasons in the board’s decision book and notified to SPK and the custodian, and the public must be informed (Art. 31(3)). In these situations, if SPK considers it appropriate, unit prices may not be calculated and dealing in units may be suspended (Art. 14(7)).

Pricing is also a custody function. The custodian must ensure that the unit price is calculated according to the valuation principles in the legislation and the internal regulation (Capital Markets Law Art. 56(1)(c)). A unit holder who believes that units were priced on the basis of inflated or stale valuations therefore has potential questions for both the founder and the custodian.

The portfolio management company’s duties

The portfolio management company must, in carrying on its activities, look after the interests of the funds it manages, the unit holders and its other clients (Capital Markets Law Art. 55(6)). It must act fairly and honestly, having regard to the interests of the persons it serves and the integrity of the market (Communiqué III-55.1 Art. 10(1)). Its managers and staff must exercise professional care and diligence, meaning the attention a careful and prudent person would give to the details in the same circumstances (Art. 21), and must be independent, honest and impartial (Art. 22). Under the mandate rules applied by analogy, the manager must act with loyalty and care in the legitimate interests of the principal, measured against the conduct expected of a prudent agent in a similar field (Code of Obligations Art. 506).

Article 33 of Communiqué III-55.1 turns these principles into specific duties to unit holders in collective investment schemes:

Limb (f) has particular evidential weight. Because the manager must keep the information, documents, research and reports on which its buy and sell decisions are based for at least five years, the absence of such records for significant purchases is itself a fact that SPK or a court may take into account. The conflict-of-interest framework supports these duties: the company must have a written conflicts policy approved by its board, identify conflicts between its staff, its clients and among clients, treat clients fairly at prices not significantly different from market prices where conflicts are unavoidable, and keep transparent complaint procedures (Art. 10(2)).

Organisation: risk management, fund service unit, outsourcing

A portfolio management company must have a written risk management system for its activities and the portfolios it manages, adopted by board decision (Communiqué III-55.1 Art. 12(1)). The risk management unit must be independent of the unit responsible for portfolio management (Art. 12(3)). It identifies risks, applies a board-approved risk measurement model, monitors compliance with the risk limits set by the board daily, reports limit breaches the same day, reports daily on risks to the executive it reports to and weekly in writing to the board, and reports any situation with extraordinary consequences to the board as soon as possible (Art. 12(4)).

The fund service unit keeps the fund’s accounting records, carries out cash reconciliations, checks unit dealing orders and prepares end-of-day fund reports, the trial balance, the balance sheet and the income statement (Art. 14(1)). It is headed by a fund manager who may not carry out portfolio management (Art. 14(2)). Services may be outsourced only with SPK’s permission and on conditions; outsourcing does not remove the company’s responsibilities under capital markets legislation (Art. 19(1) and (8)). Communiqué III-52.1 says the same of the founder: using outside services, including portfolio management, does not remove its responsibility (Art. 9(2)).

These organisational rules generate documents: board-approved risk models and limits, daily and weekly risk reports, conflicts policies, reconciliations and end-of-day reports. In an SPK examination or a civil claim they are among the first records to be requested. How to obtain them in Turkish proceedings is discussed in the guide to obtaining and preserving evidence.

The custodian

The assets of a collective investment scheme are delivered to the custodian to be kept in a separate custody account opened in the scheme’s name. Custody includes ensuring (Capital Markets Law Art. 56(1)):

1. (a) that the issue and redemption of units comply with the legislation and the internal regulation;
2. (c) that the unit price is calculated according to the valuation principles in the legislation and the internal regulation;
3. (ç) that the manager’s instructions are carried out, provided they do not breach the legislation or the internal regulation;
4. (d) that consideration for the scheme’s transactions is transferred within a suitable time;
5. (e) that the scheme’s income is used in accordance with the legislation and the internal regulation;
6. (f) that the scheme’s asset purchases and sales, portfolio structure and transactions comply with the legislation and the internal regulation.

Communiqué III-56.1 adds operational duties. The custodian must keep each scheme’s assets separately and identifiably, track assets, rights and movements by scheme, and may not hold scheme assets in its own name or in its own accounts at other institutions (Art. 7(1)). It must reconcile the assets in custody every day with the central depositories and with the manager (Art. 7(3)). It may provide valuation, operations and accounting services to the same scheme only if custody is functionally and hierarchically separated and conflicts are identified, prevented or managed and disclosed (Art. 7(2)).

The custodian is liable to the manager and to unit holders for losses caused by its failure to perform its obligations (Capital Markets Law Art. 56(2); Communiqué III-56.1 Art. 11(1)). The manager must claim compensation from the custodian, and the custodian from the manager, for losses arising from breaches of the Law; unit holders keep their own right to sue (Art. 56(3); Communiqué Art. 11(2)). If the custodian uses sub-custodians, all custodians are jointly and severally liable (Art. 56(4)). The custodian is not liable for losses caused by the management of the portfolio or by market price movements (Communiqué Art. 11(3)), and the custody agreement may not narrow the custodian’s statutory responsibilities (Art. 11(4)). The custodian and the manager may not be the same legal person and must act independently and solely in the interests of unit holders (Law Art. 56(6); Communiqué Art. 13).

Related parties and concealed profit transfer

Concealed profit transfer rules apply to collective investment schemes as well as to listed companies. Funds and their affiliates may not reduce their profits or assets, or prevent them from increasing, by dealing with persons related to them through management, supervision or capital on terms that depart from arm’s-length pricing, market practice and the principles of prudence and honesty, or by generating trading volume (Capital Markets Law Art. 21(1)). Failing to do what a prudent and honest merchant would do to protect or increase profits or assets, so that a related person’s profits or assets increase, is also a concealed profit transfer (Art. 21(2)). Collective investment schemes must document that related-party transactions were carried out on proper terms and keep the documents for at least eight years (Art. 21(3)).

Where SPK finds a concealed profit transfer, the fund must, within a period set by SPK, demand from the recipients the return of the amount with statutory interest, and the recipients must repay it (Art. 21(4)). SPK may fine the legal person concerned within a statutory range, and not less than twice the benefit obtained (Art. 103(6)). Reducing the profits or assets of public companies or collective investment schemes in this way is also a form of qualified abuse of trust under the Penal Code (Capital Markets Law Art. 110(1)(c)).

The Investment Funds Communiqué has its own related-party limits: instruments of issuers controlled by the manager or connected persons are capped at 20 per cent of fund value (Communiqué III-52.1 Art. 17(3)), investments in group companies whose public offering outside the exchange was intermediated by the founder’s group are capped (Art. 17(6)), and no entry or exit commission may be paid when a fund buys units of funds set up or managed by the founder, the manager or persons related to them (Art. 15(2)). The founder and the manager must notify the custodian in January of each year, and within six business days of any change, of the names, addresses and shareholdings of the persons and issuers covered by Article 17(3), so that the custodian can perform its duties (Art. 31(1)). The concealed profit transfer regime is explained in detail in the guide to concealed profit transfer.

SPK’s powers over managers and funds

All accounts and transactions of the founder, the manager and the custodian relating to a fund are subject to SPK audit (Communiqué III-52.1 Art. 36). Where SPK finds that a capital market institution has acted contrary to the legislation, SPK standards, its articles or a fund internal regulation, it may require the breach to be remedied within a set period, restrict or temporarily stop the institution’s activities, cancel its authorisations wholly or for particular activities, or take any other measure (Capital Markets Law Art. 96(1)). It may also cancel the licences of managers and employees found responsible, restrict or remove their signing authority from a decision to file a criminal complaint until the end of the trial, and remove board members whose responsibility has been established by a court decision (Art. 96(2)). Where an institution’s finances deteriorate, Article 97 allows SPK to require it to strengthen its finances within up to three months or, without granting any period, to stop its activities temporarily and take further measures.

For portfolio management companies, Communiqué III-55.1 Article 18 lists the grounds on which SPK may cancel, restrict or temporarily stop authorisation, including breaches under Article 96(1) and financial weakness under Article 97(1) (Art. 18(1)). If authorisation is cancelled, the funds the company founded and managed, and the other portfolios it managed, are transferred to another company approved by SPK (Art. 18(6)). Persons who breach regulations made under the Law can be fined within a statutory range (TL 20,000 to TL 250,000 in the statutory text, revalued annually), with a floor of twice any benefit and, for legal persons, an upper limit linked to revenue or pre-tax profit (Art. 103(1)–(2)). How SPK decisions can be challenged, and when SPK itself can be sued, is explained in the guide to suing the Capital Markets Board.

Termination and liquidation

A fund terminates on expiry of any term in its documents; on six months’ notice by the founder, after SPK’s approval, if it has no term; if the founder loses its operating conditions; if the founder’s financial position weakens so that it cannot meet its commitments, or it goes bankrupt or into liquidation; or if SPK determines that the fund cannot meet its own financial obligations and that, for this or similar reasons, its continuation is not in the investors’ interest (Communiqué III-52.1 Art. 28(1)).

Fund assets are liquidated according to the principles in the internal regulation and prospectus, and the liquidation balance is distributed to unit holders in proportion to their units. Only unit holders may be paid. No new units may be issued after notice of termination, and from the moment of liquidation no units may be issued or redeemed (Art. 28(2)). Where an umbrella fund is liquidated, the funds under it are liquidated as well (Art. 4(3)(c)).

For the 131 funds ordered into liquidation in 2026, SPK’s liquidation decisions and a special law add further rules. On 22 October 2026 Parliament approved the Law on Certain Investment Funds Ordered into Liquidation (Law No. 7596); as at 25 October 2026 it had not been published in the Official Gazette and was therefore not yet in force. The payment tracks, the interim payment and the position of foreign unit holders are explained in the guide to Turkey’s 2026 fund liquidation.

Claims by unit holders

A unit holder who has suffered loss may have claims against the portfolio management company, the custodian and the persons who caused the loss. The legal bases differ.

The mandate analogy is important for proof. Under Article 112 of the Code of Obligations, where an obligation is not performed or not performed properly, the debtor must compensate the resulting loss unless it proves that it was not at fault. Under Article 508, the agent must account for its conduct of the business on request and hand over what it received in connection with the mandate, paying interest on money it is late in handing over. A unit holder can therefore ask the manager to account for its management, and the manager carries the burden of showing that a breach of the fund rules was not its fault.

Limitation needs care. Claims arising from mandate contracts are subject to a five-year limitation period (Code of Obligations Art. 147(5)), while the general period is ten years (Art. 146). Because the Capital Markets Law applies the mandate rules only by analogy, which period governs a unit holder’s contractual claim against a manager may be argued; working to the five-year period is the cautious approach. Tort claims are subject to two years from knowledge of the loss and the person liable and ten years from the act, or a longer criminal limitation period where the act is a crime (Art. 72(1)). All investor deadlines are collected in the guide to limitation periods.

The stages and costs of a civil action are explained in the guide to securities lawsuit procedure, and the calculation of loss in the guide to calculating damages.

Points for foreign institutional investors

The fund rules are relevant to foreign institutions in more ways than one. The points below follow the text of the legislation.

1. 1. As unit holders. Archive the fund documents and KAP page versions in force on each subscription date, the portfolio disclosures and the prices at which units were bought and redeemed. These define the mandate and the loss.
2. 2. Fund type. Establish whether each fund was a hedge fund. If it was, the Article 17 limits did not apply, but the strategy and limits on its KAP page did, and only qualified investors could buy it (Communiqué III-52.1 Art. 25).
3. 3. As shareholders in listed companies. Where Turkish funds were significant buyers of a share, compare their disclosed holdings with the 10 and 20 per cent capital limits in Article 17(2) and the exchange-trading rule in Article 19(1)(a). A breach is not proof of manipulation, but it is a fact that can support a request to SPK or a claim.
4. 4. External managers. Where an external manager used Turkish funds, ask for the fund documents, the custodian’s identity and the hedge fund status, and for evidence that the manager’s own due diligence covered the founder’s conflicts policy and risk management system (Communiqué III-55.1 Arts. 10 and 12).
5. 5. Custodian claims. Identify the custodian of each fund and, where sub-custodians were used, all custodians in the chain; they are jointly and severally liable (Capital Markets Law Art. 56(4)).
6. 6. Records with time limits. Decision records must be kept for at least five years (Communiqué III-55.1 Art. 33(1)(f)) and related-party documentation for at least eight years (Capital Markets Law Art. 21(3)); requests should be made while they must still be kept.

Claims against Turkish brokers, custodians and portfolio managers under individual mandates, as opposed to funds, are covered in the guide to claims against brokers, custodians and portfolio managers.

Time limits and record periods

Frequently asked questions

Does a Turkish investment fund have legal personality?

No. It is a pool of assets held on fiduciary ownership, set up by a portfolio management company through an internal regulation; it is treated as a legal person only for registry and certain company law transactions (Capital Markets Law Art. 52(1) and (5)).

Can creditors of a portfolio management company seize fund assets?

No. Fund assets are separate from those of the manager and the custodian, cannot be attached or subjected to interim injunctions and are not part of a bankruptcy estate (Capital Markets Law Art. 53).

How much of one company can a Turkish fund own?

One fund may not hold more than 10 per cent of an issuer’s capital or voting rights, and all funds of one founder under the same manager not more than 20 per cent together (Communiqué III-52.1 Art. 17(2)); hedge funds are exempt (Art. 25(1)).

What is a serbest fon?

A hedge fund whose units may be sold only to qualified investors; it is exempt from the portfolio limits in Articles 17 to 24 but must invest within the strategy and limits on its KAP page (Communiqué III-52.1 Arts. 6(1)(d) and 25).

Can a manager buy assets for a fund above market price?

No. It may never buy above market value or sell below it; for exchange-traded assets, market value is the exchange price (Communiqué III-55.1 Art. 33(1)(b)).

What records must a manager keep for its investment decisions?

The information, documents, research and reports on which buy and sell decisions are based, for at least five years (Communiqué III-55.1 Art. 33(1)(f)).

Is the custodian liable for a fund’s losses?

It is liable to the manager and unit holders for losses caused by its failure to perform its obligations, but not for losses caused by portfolio management or market prices (Capital Markets Law Art. 56(2); Communiqué III-56.1 Art. 11).

Can dealing in fund units be suspended?

Yes. In extraordinary situations listed in Communiqué III-52.1 Art. 31(3), and if SPK considers it appropriate, unit prices may not be calculated and dealing may be suspended (Art. 14(7)).

Who can be paid when a fund is liquidated?

Only unit holders, in proportion to their units; from the moment of liquidation no units may be issued or redeemed (Capital Markets Law Art. 53(3); Communiqué III-52.1 Art. 28(2)).

Which rules govern the relationship between unit holders and the manager?

The Capital Markets Law, SPK’s rules and the internal regulation, and otherwise the mandate provisions of the Code of Obligations (Arts. 502–514) by analogy (Capital Markets Law Art. 52(4)).

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• Insolvency of Turkish Issuers and Brokers
• Suing the Capital Markets Board in Turkey
• Obtaining and Preserving Evidence in Turkey for Securities Claims
• Limitation Periods for Investor Claims in Turkey