Turkey pushes final tweaks to capital markets law amid investment fund crisis

Following suspected price manipulation in thinly traded stocks that triggered heavy losses and redemption pressures, Turkish authorities ordered the liquidation of 131 investment funds managing roughly $20 billion. The Fund Coordination Board, led by Vice President Cevdet Yılmaz, met on Friday and confirmed that work on draft amendments to the Capital Markets Law is progressing, with the State Supervisory Council tasked to examine the proposals.

The Capital Markets Board will begin interim payments, fully refunding investors whose net positions are below TL 1 million and offering a TL 1 million interim amount to those with larger stakes, beginning with money-market funds. Treasury Minister Mehmet Şimşek and President Recep Tayyip Erdoğan emphasized that the problem is confined to a specific segment of the market and poses no systemic risk. Criminal investigations have resulted in travel bans, asset freezes and the arrest of 65 individuals accused of manipulative transactions. Authorities aim to resolve the situation swiftly while avoiding additional burdens on citizens.