Investment Funds and Investors’ Rights: Legal Information

Recent developments in the financial and capital markets have highlighted the need to explain the legal nature of investment funds and the safeguards available to investors.

Under Turkish capital markets legislation, investment funds are pools of assets without separate legal personality. Fund units are monitored in book-entry form, and fund assets are kept separately from the assets of the founder and manager through the applicable custody framework.

Key points for investment fund investors

Custody and oversight: Under Article 56 of the Capital Markets Law, assets in a fund portfolio are to be held in separate custody accounts in the name of the fund. Custody institutions oversee compliance of certain fund-unit transactions, valuation principles and fund-asset transactions with applicable rules and fund documents.

Access to information: Before making a decision, investors should review the prospectus, investor information form and public disclosures. These documents may describe the investment strategy, risks, costs, subscription and redemption rules, and historical performance.

Liquidation process: The process applicable to a liquidating fund may vary according to the type of fund, portfolio composition, fund documents and relevant regulatory decisions. Official disclosures, KAP announcements and current fund documents should be followed carefully.

Frequently asked questions

Does a financial difficulty of the fund founder automatically eliminate an investor’s fund units?
No. The separation between fund assets and the assets of the founder and manager is a core protection mechanism under the applicable framework. Each case must nevertheless be assessed in light of its facts and official announcements.

Which documents should an investor review?
The prospectus, investor information form, KAP announcements and current documents describing the fund’s subscription and redemption procedures should be reviewed.

What is the first step in a liquidation or transaction dispute?
Official announcements relating to the fund and the investor’s own transaction records should be assessed together, taking account of the relevant documents and deadlines.

Official sources

Capital Markets Board of Türkiye — Investment Funds Guide

Capital Markets Board of Türkiye — Portfolio Custody Institutions Guide

This publication is provided for general legal information only. It is not investment advice or a legal opinion on a specific matter.