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Türkiye’s Capital Markets Board (CMB) moved to put tighter controls on hedge fund exposure, setting new limits on how much funds can accumulate in individual companies and increasing the financial requirements for firms that manage them.
The regulator updated its investment fund guideline with a decision dated Aug. 28, bringing in new limits aimed at curbing large positions in individual companies and preventing several funds under the same management from building up substantial stakes in the same stock
One of the biggest changes limits how much of a company’s publicly traded shares a hedge fund can buy based on its free-float ratio. A fund can hold up to 8% of free-floating shares when the ratio is below 25%. The cap falls to 6% for 25%-50%, 4% for 50%-75% and 2% above 75%.
Funds managed by the same portfolio manager and linked to the same founder are counted together, limiting them from building a larger combined stake. The limit falls further when hedge fund investors control the company: one fund can hold up to 1% of free-floating shares, while the combined stake is capped at 2%.
CMB also capped large portfolio positions at 20%, while investments in debt securities of a single issuer are limited to 10%. Lease certificates face limits of 10% or 25%, depending on the type.
Shares, bonds, warrants, certificates, derivatives and swaps linked to the same issuer are all included when calculating the 10% single-issuer limit.
Separately, the board extended the overhaul to money market funds, requiring non-participation funds to invest at least 10% of their portfolios in government debt securities or Treasury-backed lease certificates, while capping certain reverse-repo transactions at 25% of total fund value.
The move comes as Türkiye’s equity market remains under scrutiny from major global index providers over shareholder transparency, free-float calculations and trading activity involving funds and smaller listed companies.
In June, MSCI said international institutional investors had flagged recurring cases of possible coordinated trading involving fund holdings closely tied to some smaller listed companies, raising concerns that the amount of stock genuinely available to investors could appear larger than it actually is.
MSCI also stressed that global investors wanted greater transparency around share ownership and stronger action on possible coordinated trading in Türkiye.
It warned that a lack of clear and credible progress by its November 2026 review could prompt a reassessment of how Türkiye and some Turkish stocks are treated in its indexes.
The total market capitalization of hedge funds stood at ₺3.2 trillion ($66.1 billion) at Friday’s close across 369 funds, according to official figures from Türkiye’s Electronic Fund Trading Platform (TEFAS).
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