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Türkiye's Capital Markets Board (SPK) has extended the deadline for investment funds to comply fully with new portfolio and investment limits to Jan. 31, 2027, giving fund managers an additional month to adjust their holdings after a market rout exposed liquidity problems across the sector.
The regulator revised its compliance timetable in response to recent market developments, replacing a schedule that required funds to meet the limits in stages by Oct. 31 and Nov. 30, 2026, before reaching full compliance by Dec. 31.
Under the new decision, funds no longer have to follow the staged compliance schedule. Instead, they must meet the portfolio and investment limits in full by Jan. 31, 2027, according to the SPK's announcement Monday.
The SPK introduced sweeping changes to its Investment Funds Guide on Aug. 28, tightening restrictions on how much hedge funds could invest in individual companies and how much several funds under the same management could hold collectively.
The rules set limits on holdings of publicly traded shares according to a company's free-float ratio, which measures the proportion of its shares available for public trading. Funds can hold up to 8% of a company's free-float shares when the ratio is below 25%.
The ceiling falls to 6% for companies with free-float ratios of 25% to 50%, 4% for ratios of 50% to 75%, and 2% when the ratio exceeds 75%.
The SPK also introduced restrictions on concentrated investments, related-party exposure and holdings of securities issued by individual companies. Funds managed by the same portfolio management company or linked to the same founder face combined limits to prevent them from building up large positions through separate funds.
The changes followed concerns that some investment funds were driving unusual price movements in companies with relatively small amounts of shares available for public trading.
The new restrictions came into focus in mid-September, when several investment funds failed to meet investor redemption requests, triggering a sharp sell-off in Turkish equities.
Fund managers struggled to convert concentrated positions in thinly traded stocks into cash without driving prices lower. As redemption requests mounted, some funds failed to pay investors on time, and the pressure spread to other parts of the market.
The SPK ordered the liquidation of 131 investment funds managed by seven portfolio management companies, giving them six months to complete the process. The decision affected more than 455,000 investors, with the funds holding combined assets worth over ₺936.3 billion ($19.1 billion) at the time.
The turmoil has also drawn renewed scrutiny from international index provider MSCI, which froze certain changes to its Turkish equity indexes on Oct. 15 and warned that it could consider downgrading Türkiye’s market classification if it sees insufficient progress by June 2027.
Authorities have completed the liquidation of 84 funds managed by four portfolio management companies, with payments totaling ₺49.7 billion across 55,755 investor accounts as of the last week.
Parliament has also passed legislation establishing a framework for repaying investors and recovering assets allegedly removed unlawfully from the affected funds.
The law allows eligible investors to receive interim payments of up to ₺1 million, subject to their net investment amounts and other conditions, potentially reducing the number of investors awaiting repayment by a further 390,000.
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