Law No. 7596 on Certain Investment Funds Ordered to Be Liquidated

Legislative Details

LEGISLATION: Law on Certain Investment Funds Ordered to Be Liquidated — Law No. 7596
TYPE: Law
OFFICIAL GAZETTE: 27 October 2026 — No. 33413
ENTRY INTO FORCE: 27 October 2026
RELATED AREAS: Capital Markets / Fund Liquidation Procedures
INFORMATION NOTE DATE: 27 October 2026

Summary

The Law on Certain Investment Funds Ordered to Be Liquidated (the “Legislation”), published in the Official Gazette dated 27 October 2026 and numbered 33413, establishes special procedures for recovering assets unlawfully removed from investment funds placed into liquidation by the Capital Markets Board of Türkiye (SPK) due to unlawful reductions in their assets. These amounts are to be collected from the assets of the responsible portfolio management companies and natural and legal persons and paid to fund unit holders.

At a Glance

Portfolio management companies will bear primary liability for fund losses; where collection is not possible, natural and legal persons found responsible by the SPK will be personally liable. The Savings Deposit Insurance Fund (TMSF) has been granted special enforcement and collection powers to recover fund losses from those responsible, and a special recovery and distribution system has been established for payments to investors. Where fund assets or recovered amounts are insufficient, net investment amounts are to be adjusted for inflation, and interim payments of up to TRY 1,000,000 may be made. If the cash available for distribution upon liquidation is insufficient, the SPK may give priority to compensating investors with the lowest net investment amounts or determine a minimum payment amount for all investors. Persons and institutions found by the SPK to have participated in unlawful capital market acts may not benefit from liquidation or recovery accounts.

Background and Purpose of the Legislation

Unlawful transactions that reduced the assets of certain investment funds traded on the exchange caused losses to numerous investors, and the funds’ remaining assets proved insufficient to meet investor claims. To protect investors’ rights and interests, the SPK decided to liquidate the funds in its decisions dated 17 September 2026. The Law introduces special provisions for investment funds that entered liquidation under those decisions and whose liquidation had not yet been completed on the date of publication of the Law.

The Legislation aims to ensure the fair, transparent and effective liquidation of funds, recover assets unlawfully removed from them, collect fund losses from those responsible and distribute the proceeds to fund unit holders. It provides special mechanisms for pursuing the personal liability of fund managers and other responsible persons, applying special enforcement and collection procedures to facilitate recovery of fund losses, and setting payment priorities and interim payment methods where distributable cash is insufficient.

The Legislation applies only to funds ordered to be liquidated under the SPK’s decisions dated 17 September 2026 and whose liquidation had not been completed when the Law was published. It does not establish a general and permanent liquidation or liability regime for other investment funds.

Principal Changes Introduced

Powers Granted to the SPK for the Liquidation of Fund Assets

Under Article 3 of the Law, fund liquidation will be carried out under the SPK’s supervision and oversight. The SPK has been granted broad powers regarding the conversion of fund assets into cash, valuation principles and the determination of payments to investors.

The SPK may authorise special sale methods, including off-exchange sales, sales to a controlling shareholder and block sales, and may restrict investors purchasing these assets from selling them on the exchange for a specified period. The aim is to convert fund assets into cash at the highest possible economic value and conduct the liquidation efficiently.

New Principles for Payments to Fund Unit Holders

Under Article 4 of the Law, where fund assets are insufficient to meet investor claims, net investment amounts are to be calculated using the arithmetic mean of the rates of change in the Consumer Price Index (TÜFE) and the Domestic Producer Price Index (Yİ-ÜFE).

Interim payments of up to TRY 1,000,000 may also be made to investors. Where the cash available for distribution following liquidation is insufficient, the SPK may decide to make payments starting with the investor with the lowest net investment amount or by setting a minimum interim payment amount for all investors.

This is intended to meet the claims of as many investors as possible within the shortest possible time during liquidation and, in particular, to protect fund unit holders with smaller investments.

Extension of Personal Liability for Fund Losses

Under Article 5 of the Law, the portfolio management company that is the fund’s founder and/or manager bears primary liability for losses arising from assets unlawfully removed from the fund.

Where the loss cannot be collected in full or in part from the portfolio management company, or it is clear that collection will not be possible, personal liability may be pursued against natural and legal persons found responsible by the SPK and persons acting in concert with them.

Leaving office does not extinguish liability for transactions carried out during the relevant person’s term. The Law therefore allows fund losses to be recovered not only from portfolio management companies but also from other persons responsible for causing them.

Establishment of Recovery Accounts and Distribution to Investors

Article 6 of the Law provides for assets unlawfully removed from funds and subsequently recovered to be recorded in separate special accounts opened with the TMSF for each fund.

Amounts in a recovery account may be used only for the liquidation of the relevant fund and payments to its unit holders. They may not be attached, pledged as security or used for other purposes.

The aim is to safeguard recovered assets separately from other assets and allow their distribution to entitled investors even after liquidation has been completed.

Exclusion from Payments of Persons Involved in Unlawful Transactions

Under Article 3(6) of the Law, persons and institutions found by the SPK to have committed the acts specified in Articles 104, 106 and 107 of Capital Markets Law No. 6362, or to have participated in such acts together with the funds, will receive no payment from the relevant funds’ liquidation or recovery accounts.

This provision aims to prevent persons involved in unlawful transactions from benefiting from the payment arrangements offered to investors during liquidation.

Voluntary Return System Supporting Recovery

The Law allows persons who previously received payments from funds within the scope of liquidation or obtained gains from certain fund-related transactions to voluntarily return a specified portion of their returns. The amounts repaid in this way will be used in the liquidation process and contribute to covering the losses of affected investors.

Use of Seized and Confiscated Assets for the Benefit of Investors

Article 6 of the Law establishes a special mechanism allowing money, capital market instruments and other assets seized in connection with acts involving funds under liquidation to be used to cover investors’ losses. Assets that can be returned directly to a fund may be transferred to that fund or its recovery account; the TMSF may be appointed as trustee for other assets. Acting as trustee, the TMSF may sell or liquidate seized assets without awaiting the outcome of the proceedings and record the proceeds in recovery accounts. This aims to provide additional resources for investor payments and accelerate liquidation.

Entry into Force and Transitional Provisions

Law No. 7596 was published in the Official Gazette dated 27 October 2026 and numbered 33413 and entered into force with effect from 17 September 2026.

The Law applies only to investment funds ordered to be liquidated by the SPK’s decisions dated 17 September 2026 and whose liquidation had not yet been completed on the publication date. It also covers ongoing liquidation procedures for those funds. It does not establish a general and permanent liquidation or liability regime for other investment funds.

The SPK is to determine the interim payments, payment priorities, recovery transactions and other implementation principles envisaged by the Law, taking account of each fund’s characteristics. The first implementing measure published by the SPK on 27 October 2026 provided for interim payments in investment funds founded by Tera Portföy Yönetimi AŞ, Pusula Portföy Yönetimi AŞ and Atlas Portföy Yönetimi AŞ. It announced that payments would start with funds whose names contain the words “para piyasası” (money market).

Affected Parties and Practical Implications

Fund Unit Holders (Investors)

Payments to fund unit holders are based on net investment amounts. Interim payments of up to TRY 1,000,000 may be made to unit holders. Where the liquidation balance is insufficient to cover all claims, the SPK may determine principles giving payment priority to investors with lower net investment amounts. The arrangement seeks to make limited resources available to the largest possible number of investors; in practice, it introduces a prioritisation mechanism that favours smaller investors over investors with larger investments.

Portfolio Management Companies and Responsible Persons

The Law provides for a tiered liability regime for compensation of fund losses. Losses will first be collected from the assets of portfolio management companies. If the losses cannot be covered in this way, personal liability may be pursued against persons found responsible by the SPK. The TMSF may carry out enforcement and collection against them under the procedures and powers provided in Law No. 6183 on the Procedure for the Collection of Public Receivables.

Related Parties and Third Parties

Both a prohibition on payments and an additional liability regime apply to related parties and third parties that caused assets to be unlawfully transferred from a fund. These persons will receive no payments from liquidation accounts and may also be held liable for losses that cannot be recovered from the fund.

Our Assessment

Law No. 7596 is an exceptional liquidation and loss recovery mechanism designed to remedy losses caused by unlawful transactions affecting the assets of certain investment funds and to protect unit holders’ interests. The Legislation aims not only to liquidate existing fund assets but also to recover assets unlawfully removed from funds and collect losses from those responsible.

Holding portfolio management companies primarily liable for fund losses and, where collection is not possible, allowing recourse to the assets of other natural and legal persons found responsible provides an important legal safeguard for compensating investors. However, application of this liability mechanism requires a case-specific assessment of the scope of liability, the persons’ connection with unlawful acts and the causal link between the act and the loss.

The Law also gives the SPK broad discretion concerning fund asset valuations, sale methods, payments to investors and payment priorities. Allowing priority for smaller investments when distributing limited resources aims to compensate more investors, but also requires a balance between investors’ interests. SPK decisions should therefore be based on objective, transparent and reviewable criteria and implemented consistently with the principles of legal certainty, equality and proportionality.

In our view, the success of the Legislation will depend not only on rapidly converting fund assets into cash, but also on effectively collecting losses from those responsible and distributing recovered resources to entitled investors on fair and predictable terms. Fund unit holders should closely monitor calculations of their net investment amounts, applicable indexation methods, interim payment decisions and the distribution of final liquidation balances, and assess available legal remedies against measures affecting their rights on a case-by-case basis.

Sources

You may contact us at any time to assess the impact of the Legislation on your activities.

Yours sincerely,

Eyüboğlu & Büyükatak Attorneys at Law

Important Notice

This information note has been prepared solely for general information purposes and does not constitute a legal opinion or legal advice. It reflects the legislation in force and publicly available information as of its publication date; subsequent amendments and administrative practice have not been taken into account. Professional legal assistance should be obtained before making any decision concerning a specific event or transaction.