Turkey's Capital Markets Board (SPK) announced that Ziraat Bankası and Türkiye İş Bankası will manage the liquidation of 131 investment funds established by seven asset management firms. This decision follows a period where some funds struggled to meet redemption requests, leading to a steep selloff in the Turkish equity market. The SPK's move aims to protect investors and stabilize financial markets after withdrawals of up to $1 billion from Turkish funds in a single day.
The seven asset management companies whose funds are being liquidated include Tera Portföy, Pusula Portföy, A1 Capital Portföy, Atlas Portföy, Bulls Portföy, Hedef Portföy, and Pardus Portföy. Türkiye İş Bankası will handle the liquidation process for Tera Portföy's funds, while Ziraat Bankası will oversee the funds from the other six companies. These banks will act as portfolio custodians and are authorized to manage the sales of financial assets within the funds.
The liquidation process involves converting the financial assets within the funds into cash, which will then be distributed to investors proportionally to their fund shareholdings. The SPK specified that fund share units and investor accounts will be reconciled within two business days of the implementation of these principles. The banks will sell the assets, considering investor interests, market depth, and liquidity conditions, and the resulting cash will be transferred to investors' individual custody accounts.
The liquidation period is set to conclude within three months from the announcement date. Additionally, the Turkish central bank has implemented measures to support market stability, including boosting repo funding to 300 billion lira and increasing banks' borrowing limits in the interbank money market tenfold, to ensure sufficient lira liquidity. These actions are part of a broader effort to contain the fallout from the recent market turmoil and prevent a spillover effect.
