The Capital Markets Board (SPK) Has Made Comprehensive Changes to the GUIDELINES ON INVESTMENT FUNDS

The Capital Markets Board (SPK) Has Made Comprehensive Changes to the GUIDELINES ON INVESTMENT FUNDS

The Capital Markets Board (“SPK”) Decision No. 52/1589 dated August 28, 2026, published in its Bulletin No. 2026/54 dated August 29, 2026, comprehensive amendments have been made to various articles of the Guide on Investment Funds, and new provisions have been added to the Guide. The regulations include significant changes, particularly regarding portfolio restrictions and organizational structure of hedge funds, repo/reverse repo and money market transactions, responsibilities of portfolio managers, TEFAS transactions, fund launch periods, disclosure obligations, and share transactions. Additionally, murabaha transactions and domestic organized money market transactions have been regulated under separate headings for the first time.

Key Changes

1. Number of Funds and Capital Structure in Open-Ended Funds

The number of open-end funds to be issued under an open-end umbrella fund established by a portfolio management company may not exceed the number of portfolio managers employed. Furthermore, if more than 50% of the average monthly collective portfolio under management consists of open-end funds, subject to certain exceptions, an application must be submitted to the Board to increase the portfolio management company’s issued capital by 10% in cash. Existing structures regarding the number of funds are expected to comply with these requirements by June 30, 2029.

2. New Portfolio Concentration Limits for Hedge Funds

While the investment flexibility of hedge funds is preserved, new concentration limits have been introduced regarding individual issuers, related issuers, shares in actual circulation, debt instruments, lease certificates, and capital market instruments belonging to the same group as other investment funds. Existing portfolios will generally be required to comply with the new limits by December 31, 2026, in accordance with the transition provisions set forth in the regulation.

3. The “responsible portfolio manager” model in fund management

For each fund, it has become mandatory to appoint at least two portfolio managers—one of whom must be a “responsible portfolio manager”—by a resolution of the sponsor’s board of directors. The number of funds a single portfolio manager may manage is ultimately capped at seven; a phased transition period extending through 2029 and 2031 has been established for existing structures. Additionally, for investments involving a certain degree of concentration, the research and analysis documents supporting the investment decision must be submitted to the CEO for approval, and periodic reporting will be required.

4. Centralized Clearing and Collateral Structure for Repo/Reverse Repo and Money Market Transactions

Framework agreements, notification, custody, collateralization, and KAP disclosure obligations for over-the-counter repo/reverse repo transactions have been detailed; additional restrictions have been imposed on transactions with related parties. It is envisaged that certain firm buy-sell and repo/reverse repo transactions executed on the exchange will be incorporated into the Takasbank central counterparty/central clearing process; additional limits have been set for hedge funds regarding repo, reverse repo, and promissory note transactions, as well as Takasbank Money Market transactions . Transition periods extending to December 31, 2026, and December 31, 2027, have been established for certain provisions.

5. Murabaha Transactions Included in the Scope of the Guidelines

A clear regulation has been introduced allowing investment funds, including open-ended funds, to participate in murabaha transactions. Murabaha transactions are subject to the term deposit/participation account investment limits specified for the relevant fund type, while reverse murabaha transactions are subject to the maximum 10% limit on borrowing. This change has the potential to increase product diversity, particularly for funds based on participatory finance, in terms of investment and liquidity management.

6. New Rules for Money Market and Short-Term Funds

In money market funds, the aggregate and bank-specific concentration limits for deposits and participation accounts have been revised; money market and short-term funds are now permitted to conduct reverse repo transactions up to 25% of the fund’s total value on the Borsa Istanbul Equity Repo Market. It is stipulated that, with the exception of participation funds, at least 10% of the portfolio of money market funds must be allocated to government domestic debt securities and/or lease certificates issued by the Treasury and Finance Ministry Asset Leasing Inc.

7. TEFAS and Disclosure Obligations

For funds traded on TEFAS, the prospectuses may specify the minimum number of shares and the minimum unit size. For open-end funds traded on TEFAS, obligations regarding the investor information form and the weekly portfolio allocation report have been established. Furthermore, if an investor’s shareholding in a fund traded on TEFAS reaches or falls below the thresholds of 30%, 40%, 50%, 60%, 70%, 80%, or 90%, this situation will be announced by MKK on KAP.

8. 60-Day Period for Commencing Fund Sales

It has been made mandatory for the sale of fund shares—including those of open-end funds—to commence no later than 60 days following the sponsor’s receipt of the prospectus approved by the Board. If sales do not commence within this period, the prospectus approval will automatically be deemed invalid, and the fund will be liquidated ex officio.

9. Special Orders and Wholesale Market Transactions for Fund Shares

Restrictions have been imposed on special funds, hedge funds, real estate investment funds, and venture capital investment funds acting as buyers in certain special order and Wholesale Sales Market transactions; similarly, restrictions have been imposed on special and hedge funds acting as sellers through these methods. For other investment funds, new limits have been established preventing funds belonging to the same sponsor from acquiring, through these methods in a single transaction, more than 1% of the capital or voting rights of a publicly traded company, and more than 3% in total over any 12-month period.

Sectoral Impact and Assessment

When the changes are evaluated as a whole, it is evident that the Capital Markets Board (SPK) aims to tie growth—particularly in the hedge fund sector—to stronger capital, human resources, portfolio concentration, and risk management rules. While the investment flexibility of hedge funds has not been completely eliminated, more explicit limits have been imposed regarding issuer concentration, related-party transactions, repo/reverse repo transactions, money market transactions, and portfolio manager capacity.

On the other hand, the explicit inclusion of murabaha in investment fund portfolios and the detailed regulation of organized money market transactions increase product diversity; while central clearing, collateralization, MKK/KAP disclosures, and the responsible portfolio manager model strengthen investor protection and accountability in fund management.

Compliance Issues for Portfolio Management Companies

• Comparison of the number of hedge funds with the number of employed portfolio managers and planning the compliance timeline through June 30, 2029,
• Projecting the potential 10% capital increase requirement should the weight of hedge funds exceed 50% of the collective portfolio size,
• Screening of existing hedge fund portfolios for compliance with new issuer/concentration and related-party limits,
• Appointment of at least two portfolio managers, including the responsible portfolio manager, for each fund by a board of directors resolution,
• Review of repo/reverse repo, promissory note agreements, and Takasbank Money Market positions in accordance with the new limits and collateral requirements,
• Completion of updates to TEFAS, KAP, prospectuses, and investor information forms in accordance with the relevant transition dates,
• Scheduling the 60-day sales commencement period and new fund establishment processes accordingly.

Since the regulations provide for different effective and transition dates for different provisions, it would be appropriate to conduct a separate assessment on a provision-by-provision basis for each fund and transaction type.