New Regulations for Investment Funds on the Way: Market Manipulation and Banking Discipline

Important Regulations Expected on Investment Funds

Potential regulations regarding investment funds in Turkey have sparked widespread discussions in the markets. It has been stated that the economic administration is working on a comprehensive legal framework in this context. The Capital Markets Board (CMB) and the Treasury are conducting studies on regulations that will include investment funds within the scope of market manipulation.

New Additions Under Market Manipulation

With the preparations underway, it is indicated that transactions conducted through investment funds could also be considered among fraudulent crimes. The economic administration plans to add investment funds to the market manipulation articles in the Capital Markets Law. With this new change, funds will be subject to the measures regulated under Article 101 of the Capital Markets Law. These measures range from prohibiting transactions on exchanges to changes in settlement methods, as well as restrictions on margin purchasing and short selling.

Can Banking Discipline Be Applied?

Another significant regulation that the CMB is working on is to bring a banking discipline similar to that in investment funds, which could lead to major changes in the sector. According to the Banking Law, bank owners can lend to their own subsidiaries subject to certain limitations. In this context, it is being considered that the CMB may limit the shares of companies in the portfolios of funds to a certain percentage and think about regulations regarding collaterals. This new system could trigger a significant transformation in the risk management of investment funds.

Impact Analysis and Next Steps

The CMB is conducting an intensive impact analysis process to assess the effects of these regulations on the markets. It remains uncertain how the rules to be introduced for investment funds will impact stock market performance. However, it is expected that these decisions will be announced in the near future.