SPK sets payment rules for 131 funds in liquidation

ANKARA

(AA Photo)

Türkiye’s Capital Markets Board (SPK) has appointed İşbank and Ziraat Bank to oversee the liquidation of 131 investment funds, setting out how their assets will be sold and the proceeds distributed to investors.

Payments will be made in proportion to investors’ holdings, at intervals determined by the banks.

The regulator has set a three-month liquidation timetable, which it may extend.

Under the Sept. 17 decision, İşbank will handle the six Tera Portföy funds on the revised list.

Ziraat Bank will oversee the funds established by A1 Capital Portföy, Atlas Portföy, Bulls Portföy, Hedef Portföy, Pardus Portföy and Pusula Portföy.

The updated list adds one Tera equity fund to the 130 funds initially designated for liquidation.

Media reports said that the original 130 funds held more than 800 billion Turkish Liras and had over 500,000 investors.

The intervention followed disclosures by Pusula and Tera that some of their funds could not meet redemption payments. Atlas also reported delays at a money market fund.

The Financial Stability Committee, chaired by Treasury and Finance Minister Mehmet Şimşek, described the problems as “temporary and manageable” and pledged action to ease the liquidity squeeze and prevent contagion. The Central Bank increased liquidity support following the stock market sell-off.

Under the liquidation rules, the banks will set the pace of asset sales, taking account of investors’ interests, market depth and liquidity.

Cash from sales and maturing investments will be distributed to investors’ verified custody accounts.

Amounts owed on unfulfilled redemption orders submitted through TEFAS, Türkiye’s electronic fund trading platform, will be recorded as fund debts and paid first from the cash raised.

For funds requiring advance notice, redemption instructions submitted after 1:30 p.m. on Sept. 17 fall under the liquidation rules. For money market funds, the applicable cutoff is the time specified in each fund’s prospectus.

The banks and MKK, Türkiye’s central securities depository, must reconcile outstanding fund units with individual investor accounts within two business days of the rules taking effect.

The checks will also cover liens, court restrictions and pending orders.

Financial assets will be held at Takasbank in accounts under the appointed banks. Reconciliation of the funds’ debts, receivables and permitted expenses must be completed within 10 business days of the SPK decision.

Management fees and other permitted expenses will continue to be charged during liquidation. The banks may invest available cash in money market instruments in line with their payment schedules.

The SPK also extended restrictions beyond TEFAS. Purchases and redemptions in funds designated for liquidation cannot be carried out through their managers or other distributors from Sept. 17.

Unsettled transactions in the funds’ underlying portfolios ordered on or before that date will still be completed through normal settlement procedures.

The liquidation rules will be published on each fund’s page on the Public Disclosure Platform (KAP).

Liquidation must be completed by the first business day following the three-month period from the announcement, unless the SPK grants an extension.