Parliament commission approves fund liquidation proposal; investors granted path to interim payments up to 1 million lira

The Parliament's Plan and Budget Commission has approved the bill regulating the liquidation of investment funds that were intervened by the Capital Markets Board (CMB) on September 17, 2024. The proposal is now moving to the General Assembly's agenda.

The regulation excludes investors who have already recovered their entire principal. Investors with funds still held in the funds may receive interim payments of up to 1 million lira under certain conditions; those whose claims exceed this amount will be limited to 1 million lira in the first phase.

Payments will be covered from three sources: liquid and convertible assets remaining in the liquidated funds, recovery of unjust enrichment, and income generated from the evaluation of assets held by responsible parties. The proposal explicitly states that public funds will not be used.

Through amendments submitted by the AK Party, changes were made to two articles: registry records of the Central Registry Agency (CRA) and Takasbank will be compared to clarify the rights holders and amounts; the sums to be recovered by those who gained through market-distorting conduct, misuse of information, or fraud will be determined according to a new calculation method. The proposal also includes granting additional authorities to the Deposit Insurance Fund (TMSF) to enable faster evaluation of assets seized by it.

It is noted that the total portfolio size of the 131 funds intervened by the CMB corresponds to 2.4 percent of household financial assets.