Turkey's regulator orders closure of funds run by seven firms, agency says
The order lands as Turkish fund investors pull money at the fastest pace of a weeks-long run.
Published
Turkey's Capital Markets Board has ordered the closure of investment funds run by seven firms, the regulator said. The order does not identify the firms or the size of the funds involved.
The move follows criminal complaints the regulator filed against dozens of people at Pusula Portföy and Tera Portföy, along with trading bans, over alleged share-price manipulation by asset managers. That earlier action targeted individuals. This one targets the funds themselves, an escalation that adds to concern that some investment funds had built outsized influence over trading in illiquid stocks.
Tera Portföy has already defaulted on obligations totaling 366 billion lira, or about $7.5 billion, according to Crypto Briefing. Since late August, Turkish funds have lost roughly 128.7 billion lira, about $2.7 billion, as new rules reshape the industry, the outlet reported. It said redemptions hit their peak on Wednesday, prompting Turkey's Financial Stability Committee to call an emergency meeting for Thursday. Crypto Briefing reported that fund managers had built portfolios around thinly traded shares, and that rules forcing them to unwind those positions have pushed down prices, eroding fund values and triggering further withdrawals. The committee has tools available including temporary redemption gates, backstop liquidity facilities and accelerated restructuring of troubled funds, the outlet said.
The closures point to further redemptions and weaker confidence in Turkish small-cap fund products, a bearish signal for the sector even as regulators describe the action as a cleanup.