The draft law on the troubled funds aims to protect the rights of nearly 460,000 investors.
Lawmakers from Türkiye’s ruling Justice and Development Party (AKP) have drafted new legislation aimed at safeguarding investor rights and ensuring transparency during the liquidation of investment funds hit by the ongoing financial crisis, state-run Anadolu Agency has reported.
The proposal, which is expected to be submitted to parliament in the coming days, would provide for the liquidation of assets worth up to 1 million Turkish lira for 455,578 investors.
The draft seeks to identify each fund’s assets and their rightful owners, liquidate fund assets without causing unnecessary economic losses and distribute the resulting cash proceeds fairly among investors.
To account for past cash flows and help balance investor losses, investment values would be updated using the arithmetic average of changes in the consumer price index (CPI) and domestic producer price index (D-PPI). Withdrawals would be calculated under a “first-in, first-out” method.
The proposal also envisions interim payments of up to 1 million lira per investor, provided that the amount does not exceed the investor’s net investment or finalized claim.
If available cash is insufficient to cover all payments, funds would be distributed proportionally among eligible investors. The Capital Markets Board (SPK) would be authorized to determine payment priorities, including making payments beginning with investors who have the smallest net investment amounts.
The draft would establish a voluntary reimbursement mechanism for investors who exited funds before liquidation and earned returns deemed above normal market conditions due to inaccurate asset valuations. Reimbursement calculations would be based on objective market benchmarks, including comparable fund returns and relevant market indices.
Under the proposal, responsibility for investor losses could extend to fund founders, portfolio management companies and individuals or entities found responsible for shortfalls in liquidation proceeds. Assets seized during criminal investigations could also be used to compensate investors.
The Savings Deposit Insurance Fund (TMSF) would be authorized to sell or liquidate assets that cannot be directly transferred to funds and channel the proceeds to affected investors.
