SPK orders 131 funds of 7 asset managers wound up
The 131 funds hold more than 800 billion lira for 455,758 investors. Ziraat and İş Bankası will run the wind-down, now allowed up to 6 months.
The decision
On September 17, the Capital Markets Board (SPK) ordered the liquidation of 131 investment funds run by seven portfolio managers: Tera, Pusula, Hedef, Atlas, A1, Pardus and Bulls. It set out the procedures the next day. After September 17, no buy or sell orders for these funds are accepted on TEFAS or other distribution channels. Central Registry Agency records show 455,758 unique investors in the funds.
How investors get paid
Türkiye İş Bankası will run the wind-down of the Tera funds, and Ziraat Bankası the funds of the other six firms. Assets will be sold according to market conditions and liquidity. Proceeds go to investors in proportion to their holdings, through their custody accounts, in periods the banks will set. Citing the funds' portfolio structure, SPK extended the maximum liquidation period from 3 to 6 months.
How it got here
According to reports, share prices inflated by related-party trades, heavy leverage and a liquidity squeeze when investors tried to exit all played a part. Treasury and Finance Minister Mehmet Şimşek said the problems came from credit and liquidity issues at a limited number of funds and posed no systemic risk. The affected funds make up about 10% of the fund market. The selling spilled into stocks: the BIST 100 closed September 18 down 1.67% at 13,284. Pusula and Tera executives had also been referred to court in the KTLEV probe.