Information Note on Law No. 7596 on Certain Investment Funds Subject to Liquidation Decisions

Document Type: Law

Law No. and Title: Law No. 7596 on Certain Investment Funds Decided to Be Liquidated

Official Gazette Publication Date: 27 October 2026

Entry into Force: 27 October 2026 (with effect from 17 September 2026)

Summary of the Law

Published in Official Gazette No. 33413 on 27 October 2026, Law No. 7596 on Certain Investment Funds Decided to Be Liquidated (the Law) regulates the procedures and principles governing the fair, transparent and effective liquidation of investment funds that were ordered to be liquidated by the Capital Markets Board (the Board) pursuant to Article 128 of the Capital Markets Law No. 6362 (the CML) under its decisions dated 17 September 2026 and whose liquidation has not yet been concluded as of the date of publication of the Law; the recovery of assets unlawfully extracted from the assets of these funds; the recovery of fund losses and damages from the responsible parties; and the distribution of recovered assets to fund shareholders.

The Law consists of 9 articles and constitutes a special legislative measure addressing a specific set of circumstances. By its decisions announced in Weekly Bulletin No. 2026/61 dated 17 September 2026, the Board resolved to liquidate a total of 131 investment funds established by 7 portfolio management companies; according to public announcements by the Board, there are approximately 455,758 individual investors in these funds. The principal regulations introduced by the Law may be summarised as follows:

• conducting the liquidation under the supervision and audit of the Board through institutions appointed by the Board, without applying ordinary investment fund restrictions to on-exchange and off-exchange sales of fund assets
• determining fund share ownership through reconciliation with Central Registry Agency (MKK) records, and including blocked shares subject to redemption orders transmitted to TEFAS on or before 17 September 2026 that could not be executed
• calculating payments – in the event that distributable cash proves insufficient – based on the inflation-indexed ‘net investment amount’ rather than the fund unit share price
• enabling interim payments of up to TL 1,000,000 per investor prior to final liquidation
• establishing a voluntary return mechanism for individuals who exited the fund prior to liquidation and achieved returns above inflation, as well as those who generated gains from shares subject to market offences
• holding the portfolio management company primarily liable for fund losses, and, in the event of non-collection, holding natural persons and legal entities designated by the Board personally liable, with enforcement conducted by the Savings Deposit Insurance Fund (TMSF) under Law No. 6183
• seizure pursuant to Article 128 of the Code of Criminal Procedure (CMK) in criminal investigations, trusteeship by the TMSF and the transfer of confiscated assets to the fund rather than the Treasury, with all recoveries monitored in a non-distrainable ‘recovery account’ held with the TMSF
• withholding payments from the liquidation and recovery account to persons determined by the Board to have participated in market offences.

Key Regulations Introduced

Scope and Exceptional Nature of the Law (Articles 1–2)

The Law applies exclusively to investment funds (the Funds) whose liquidation was ordered under the Board’s decisions dated 17 September 2026 and whose liquidation has not been completed as of the date of publication of the Law. The second paragraph of Article 1 of the Law explicitly provides that these provisions do not constitute a general or permanent liquidation and liability regime for other investment funds.

This legislative choice demonstrates that the Law does not alter the general regime governing investment funds under the CML; funds subject to subsequent liquidation decisions of the Board will not fall within the scope of the Law without a separate statutory enactment, even if they belong to the same portfolio management companies.

Obligation to Provide Information and Documents and Non-Application of Secrecy Provisions (Article 3/4)

The MKK, Takasbank, Borsa İstanbul, the Banks Association of Türkiye, entities charged with liquidation, portfolio management companies, portfolio custodians and other capital market institutions, alongside public institutions and organisations, are required to provide the information and documents necessary for the implementation of the Law to the Board, the Investor Compensation Centre (YTM) and/or the TMSF without delay, upon request; these institutions may not refuse to disclose such information on the grounds of confidentiality and secrecy provisions under their specific legislation.

Accordingly, banking secrecy and client secrecy under the Banking Law, as well as professional secrecy obligations under capital markets legislation, cannot be asserted against requests within this scope. The data transfers in question may be based on the legal grounds of being explicitly stipulated by law and fulfilling a legal obligation pursuant to subparagraphs (a) and (ç) of Article 5(2) of the Law on the Protection of Personal Data No. 6698 (the LPPD); it will be appropriate for the institutions concerned to address this transfer channel within their data processing inventories and privacy notices.

Determination of Fund Shareholding and Unexecuted TEFAS Orders (Article 3/5)

Fund shareholding will be determined on a fund-by-fund and account-by-account basis by the entities charged with liquidation through reconciliation with MKK records. The Law provides that investors whose participation shares were blocked in respect of orders transmitted to TEFAS on or before 17 September 2026 that could not be executed due to the default of the relevant fund and/or the non-disclosure of the participation unit price will be subject to the liquidation provisions in their capacity as fund shareholders.

Prohibition of Payment to Participants in Market Offences (Article 3/6)

Where the acts regulated under Articles 104, 106 or 107 of the CML were committed by the funds decided to be liquidated, by acting in concert with these funds or with the complicity of the funds, no payment will be made from the liquidation and recovery account to persons and institutions determined by the Board to have committed these acts or to have acted in concert with them.

Net Investment Amount (Article 4/1)

The net investment amount will be calculated by the MKK in accordance with the following principles:

• each cash inflow and outflow actually made by the investor to and from the fund is indexed on a pro rata temporis basis from the transaction date to the liquidation date using the arithmetic mean of the rates of change in the consumer price index and the domestic producer price index published by TURKSTAT;
• if the indexed inflow amount exceeds the outflow amount, each cash outflow from the fund is deducted from the inflow amounts on a first-in, first-out (FIFO) basis; and
• the calculation is performed by the MKK on a shareholder-by-shareholder and account-by-account basis.

Interim Payment and Final Payment (Articles 4/2–3 and 4/5)

The Law enables interim payments to be made to fund shareholders without awaiting the completion of the liquidation process. The principles governing interim payments are as follows:

• interim payments are made in respect of funds determined by the Board and from the relevant fund’s own liquidation estate;
• an interim payment may be made up to the net investment amount for investors whose net investment amount is below TL 1,000,000, and up to a maximum of TL 1,000,000 for investors whose net investment amount is TL 1,000,000 or more; in any event, the net investment amount calculated without applying indexation cannot be exceeded;
• with the exception of money market funds, the interim payment amount cannot exceed the total value of the participation shares in the investor’s account calculated at the price determined by Takasbank as of the close of business on the day preceding the calculation date;
• where distributable cash is insufficient, the Board may decide that payments be made starting from the lowest net investment amount and/or that a minimum interim payment amount be established for all shareholders, with the aim of ensuring full participation for the maximum possible number of investors;
• redemption of participation shares is not performed in exchange for interim payments; shares are redeemed during the final liquidation payment; and
• when calculating the final payment, amounts previously paid from the liquidation estate, the recovery account or other legal remedies are offset.

Voluntary Return of Yields (Article 4/4)

The Law provides for a voluntary return mechanism with respect to two groups. Individuals who received payments by redeeming their participation shares to the fund up to the liquidation date may voluntarily return returns exceeding the inflation-indexed amount of their inflows to accounts announced by the Board; individuals who obtained gains from shares held within the fund assets that were subject to Articles 104, 106 and 107 of the CML may voluntarily return returns exceeding the indexed amount of their acquisition costs to the general share return account announced by the Board. The calculation period, method for determining the return amount and other procedures and principles will be determined by the Board.

Assets Unlawfully Extracted from Fund Property and Personal Liability (Article 5)

The Law defines money, capital market instruments, goods, rights, receivables and substitute assets transferred from fund property in favour of related parties, controlling shareholders, managers, persons directly or indirectly controlled by them or other third parties – either contrary to legislation or without a genuine economic purpose aligned with the fund’s interest even if formally compliant with legislation, through unrequited or collusive transactions involving loans, debts, advances, collateral, transfers, assignments, purchases, sales, repurchase agreements (repos), reverse repos or similar transactions and contracts – as assets unlawfully extracted from fund property, and stipulates that the fund will be deemed to have incurred losses to that extent.

The Board will determine the amount of loss or damage, the responsible natural persons and legal entities, and the amounts for which they are liable in respect of each fund, and notify the TMSF; upon notification by the Board, the TMSF will initiate recovery and enforcement proceedings under Law No. 6183 on the Collection Procedure of Public Receivables. In these enforcement proceedings, the TMSF may also exercise the powers conferred by Articles 132, 134, 136, 138 and Provisional Article 27 of the Banking Law No. 5411, alongside the provisions of Law No. 6183. The Istanbul administrative courts have been designated as having jurisdiction over lawsuits initiated within this scope.

Conclusion and Evaluation

Law No. 7596 establishes a temporary and exceptional liquidation, recovery and liability regime specific to the 131 investment funds subject to the liquidation decisions adopted by the Board’s decisions dated 17 September 2026. The key features of the Law include calculating payments on the basis of the inflation-indexed net investment amount rather than the fund unit share price, an interim payment of TL 1,000,000 prioritising small retail investors, tiered personal liability directed against portfolio management companies and responsible individuals, and enforcement by the TMSF under Law No. 6183 in conjunction with criminal investigation measures and a recovery account protected from attachment.

Decisive elements regarding the implementation of the Law – such as the funds eligible for interim payments, the payment schedule, the minimum payment amount and the voluntary return procedure – have been delegated to further regulatory measures of the Board, and will be evaluated separately once these measures are issued. At this stage, transaction records of fund shareholders should be retained, the commercial rationale of transactions conducted by related parties and counterparties with the funds in scope should be properly documented, and the procedures for handling information requests and LPPD compliance documentation of institutions subject to information-providing obligations should be reviewed.

The full text of the Law is available at the following link:

Official Gazette – Dated 27 October 2026 and Numbered 33413 – Law No. 7596

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