An increase in geopolitical tensions in the region has led the Capital Markets Board of Türkiye (SPK) to impose a temporary ban on short selling in Borsa İstanbul’s equity market this week, while the Central Bank has announced new measures.
According to the SPK, short selling will be prohibited from March 2 until the close of trading on March 6. The regulator explained that the decision was taken to ensure the capital markets operate in a reliable, transparent and stable environment, while protecting the rights and interests of investors. It further clarified that intraday positions opened without pressing the short sell button and closed within the same day are also covered by the ban.
The SPK also introduced flexibility in margin trading rules. While the minimum equity protection ratio is normally set at 35 percent, brokerage firms will be permitted to apply a reduced threshold of 20 percent until March 6, provided this aligns with their risk policies and takes client demands into account.
Separately, Borsa İstanbul announced that the Order-to-Trade Ratio (OTR) in the equity market will be reduced from 5:1 to 3:1 until further notice.
Meanwhile, the Central Bank declared on March 1 that, considering developments in financial markets, it decided to suspend one-week repo auctions for a period of time.
The bank also said it will start conducting Turkish Lira-settled foreign exchange forward selling transactions “in order to ensure the sound functioning of the foreign exchange market, prevent possible volatilities in exchange rates and stabilize foreign exchange liquidity.”
