Treasury and Finance Minister Mehmet Şimşek (AA Photo)
Treasury and Finance Minister Mehmet Şimşek said measures to contain Türkiye’s fund market problems were sufficient, as regulators outlined how investors in 131 funds ordered into liquidation would be repaid.
“There is no widespread systemic risk,” Şimşek said on Sept. 18, adding that 90 percent of the market was functioning normally.
“We have quarantined the troubled segment,” he said.
The Capital Markets Board (SPK) assigned İşbank to oversee the six affected Tera Portföy funds. Ziraat Bank will handle funds run by A1 Capital Portföy, Atlas Portföy, Bulls Portföy, Hedef Portföy, Pardus Portföy and Pusula Portföy.
Media reports said the original 130 funds held more than 800 billion Turkish Liras and had over 500,000 investors. An additional Tera equity fund was later added to the liquidation list.
The intervention followed redemption defaults disclosed by Pusula and Tera, while Atlas reported payment delays at a money market fund.
Cash from asset sales and maturing investments will be paid to investors in proportion to their holdings, at intervals set by the banks. The banks will set the pace of sales according to investors’ interests, market depth and liquidity.
Amounts due from unfulfilled redemption orders through TEFAS, Türkiye’s electronic fund trading platform, will be recorded as fund debts and paid first.
Investor holdings must be reconciled with custody records within two business days of the rules taking effect. Reconciliation of the funds’ debts, receivables and permitted expenses must be completed within 10 business days of the SPK decision.
Liquidation must end by the first business day following three months from the announcement, unless the SPK extends the deadline.
The affected funds are closed to purchases and redemptions both on TEFAS and through other distribution channels.
Existing management fees will be payable to the banks after custody is transferred, and other permitted expenses will continue. Available cash may be invested in money market instruments pending payments.
The liquidation rules will be published on each fund’s page on the Public Disclosure Platform (KAP).
Justice Minister Akın Gürlek said four suspects, including fund executives, had been remanded in custody in an investigation into alleged fund and share-market manipulation following an SPK criminal complaint.
He said 51 people were barred from leaving the country and bank accounts and other assets linked to the case had been frozen.
In a separate case in Bakırköy, 16 suspects were remanded over alleged efforts to manipulate markets through social media, he said.
He also reported a separate order blocking access to 246 social media accounts.
The Financial Stability Committee, chaired by Şimşek, described the fund problems as “temporary and manageable” on Sept. 17.
The Central Bank pledged more funding through one-week repo auctions and lower collateral haircuts, while the banking regulator temporarily eased capital rules for listed banks’ share buybacks.
Şimşek said the banking system had no liquidity or asset-quality problems.
Emlak Katılım’s savings finance subsidiary has begun talks to acquire Katılımevim and Birevim, according to a stock exchange filing.
Şimşek said the process was intended to protect investors.
He also called for closer oversight of the growing nonbank financial sector and said the 10 million Turkish Lira threshold for qualified investor status could be reviewed.
