Authorities weigh new oversight measures after fund market turmoil

ANKARA

The turmoil in Türkiye’s fund market and a series of subsequent liquidation decisions have brought oversight mechanisms in capital markets to the forefront of discussions in Ankara, with potential new measures aimed at preventing similar problems from recurring now under consideration, daily Milliyet has reported.

Following the turmoil, the ruling Justice and Development Party (AKP) has been evaluating potential measures, including limits on the combined positions held in individual stocks by funds managed by the same portfolio management company, minimum liquidity thresholds linked to stress tests, and the establishment of an early warning system for real-time monitoring of risks.

AKP spokesperson Ömer Çelik said regulatory and supervisory bodies were carrying out their duties regarding the fund investigations. He added that the situation of investors affected by the process was being assessed by the relevant institutions and that a roadmap would be shared with the public once ongoing work is completed.

The Capital Markets Board (SPK), which had already launched a regulatory process before the crisis, has introduced a number of measures aimed at reducing risks, particularly in money market funds and equity hedge funds. These steps include restrictions on unsecured borrowing between related parties and regulations designed to prevent unusual price movements.

One of the proposals under consideration within the AKP is the introduction of limits on the aggregate exposure of funds managed by the same portfolio management company to a single stock. Rather than reviewing each fund’s position separately, regulators could calculate the combined holdings of all funds under the same manager and impose binding caps, particularly for stocks with low free-float levels.

Strengthening liquidity requirements is also on the agenda. According to the proposals being discussed, minimum liquidity thresholds could be set based on the results of existing stress tests, while funds falling below critical levels could face automatic restrictions on taking on additional risk.

As the judicial investigation into the fund crisis expands, AKP officials are also assessing its political implications alongside its economic and legal dimensions. After parliament reconvenes for the new legislative year on Oct. 1, the party may consider launching a parliamentary inquiry into all aspects of the crisis.