Law No. 7596 and the CMB’s Latest Bulletins: What Has Changed for Investors in the Funds Under Liquidation?
M. Özkan Özdoğan
Partner
The fate of pending redemption orders, interim payments based on the net investment amount, suspended institutions, recovery of assets from those responsible, and what investors need to do
Summary
Law No. 7596 on Certain Investment Funds Whose Liquidation Has Been Decided (the “Law”) was adopted by the Plenary of the Grand National Assembly of Türkiye on October 22, 2026 and entered into force upon its publication in the Official Gazette No. 33413 of October 27, 2026. Under Article 8, the Law applies with effect from September 17, 2026. It covers the investment funds whose liquidation was decided by the Capital Markets Board (the “CMB” or the “Board”) by its decisions of September 17, 2026 and whose liquidation had not been completed on the date of publication. A significant part of the investor positions we discussed in our note of September 21, 2026 under Bulletin No. 2026/61 has changed as a result of the Law. On the same day the Board, by Bulletin No. 2026/76 (Decision No. 76/1903), set the first procedures and principles for the implementation of the Law and resolved to commence the liquidation of, and interim payments in, the funds of Tera, Pusula and Atlas Portföy. In the ten days preceding the Law’s publication, the Board also suspended the activities of three brokerage firms (2026/72) and two portfolio management companies (2026/75), appointed banks to liquidate the latter’s funds outside the liquidation list, and raised the professional client and qualified investor thresholds (2026/74). On October 27, 2026 the Board also published a ten-question guide summarizing the procedures and principles. In this note we review the regime introduced by the Law, the Board’s latest bulletins, how they differ from the previous regime, and the new legal positions of investors.
The Law applies only to the funds placed into liquidation by the decisions of September 17, 2026; it does not create a general or permanent liquidation and liability regime for other funds (Art. 1/2). Funds outside TEFAS, funds suspended from trading but not on the liquidation list, and client cash held at investment firms remain outside the Law.
The most significant change for pending redemption orders is in Article 3/5. Investors whose orders were transmitted to TEFAS on or before September 17, 2026 but could not be executed because of the fund’s default or the non-announcement of the unit price, and whose units were blocked, are subject to the liquidation provisions of the Law “in the capacity of fund unit holders”. In light of this provision, the priority payment regime under paragraph A/6 of Bulletin No. 2026/61 is not expected to be applied by the administration. Whether the orders concerned had already become irrevocable and had given rise to an accrued redemption claim is, however, a separate legal question under CML Art. 79, the TEFAS Operating Principles and the right to property.
If the cash raised from the realization of fund assets is insufficient to cover the total unit value calculated at the end-of-day price preceding the liquidation decision, payments are made on the basis of the “net investment amount”: cash actually paid into and withdrawn from the fund is indexed by the average of the CPI and domestic PPI changes and netted on a first-in, first-out basis (Art. 4/1).
In funds designated by the Board, an interim payment of up to TRY 1,000,000 may be made, capped at the unindexed net investment amount; where cash is insufficient, the Board may decide to pay starting from the lowest net investment amount (Art. 4/2–3). No units are redeemed against the interim payment; it is set off against the final liquidation payment.
Under the Board’s procedures and principles in Bulletin No. 2026/76, interim payments will begin with money market funds; in other funds the order will follow the ratio of each fund’s distributable cash to its interim payment liability; the interim payment per fund will be limited to the lowest of the unindexed net investment amount, the current value of the units and TRY 1,000,000. In funds with sufficient cash, a final payment will be made instead of an interim payment. The principles contain no rule on how orders held in PBLK will be treated in the reconciliation.
On October 26 the Board temporarily suspended the activities of Tera Portföy and Pusula Portföy under CML Art. 97/1 and appointed Türkiye İş Bankası and T.C. Ziraat Bankası respectively to liquidate those companies’ investment funds outside the liquidation list, together with their real estate and venture capital funds (2026/75). These funds fall outside the Law; the Board’s guide of October 27 likewise confines the scope of the procedures and principles to the funds placed into liquidation by the decisions of September 17. The liquidation procedure and the treatment of unpaid redemption amounts will be determined by subsequent Board decisions.
With effect from October 26, 2026, the thresholds for professional client and qualified investor status on request have been raised from TRY 10,000,000 to TRY 50,000,000 (financial assets) and from TRY 5,000,000 to TRY 25,000,000 (trading volume); investors who acquired that status under the previous thresholds may only place sell orders in instruments reserved for qualified investors unless they evidence to their investment firm that they meet the new conditions. The same Bulletin sets a single date, January 31, 2027, for compliance with the portfolio limits in the Guide (2026/74).
For value unlawfully removed from fund assets, the founding portfolio management company is liable first; if recovery from it is not possible, the natural and legal persons determined by the Board are personally liable. Enforcement is carried out by the SDIF (TMSF) under Law No. 6183, and the Istanbul administrative courts have jurisdiction over such actions (Art. 5). Seized and recovered assets are held in recovery accounts that cannot be attached or made subject to interim measures (Art. 6).
The retroactive effect of the Law from September 17, 2026 and the conversion of PBLK orders into unit holdings are open to constitutional debate in terms of settlement finality (CML Art. 79), legal certainty and the right to property. That debate belongs not to the administrative stage but to the courts; in the context of actions against the implementing acts, it may come before the Constitutional Court and, if the conditions are met, the European Court of Human Rights.
What investors should do: obtain and check the reconciliation and net investment amount notification in writing, preserve the records of pending orders, make sure that interim payment documents contain no release, and reserve their rights in writing with respect to PBLK orders.
About the assessments in this note
The Law leaves many details of implementation to the procedures and principles to be determined by the Board (Art. 3/1 and Art. 7/2). By Bulletin No. 2026/76 of October 27, 2026 the Board set the first procedures and principles on the commencement of the liquidation and on interim payments; many matters, such as the notification of the reconciliation, the treatment of pending orders and the details of the net investment amount calculation, have not yet been regulated. The views expressed below as “our current assessment” reflect our current legal opinion based on the text of the Law, the Capital Markets Law No. 6362 (“CML”), the relevant Board regulations, the TEFAS Operating Principles, the Board’s announcement of October 22, 2026 on settlement finality and PBLK, its guide of October 27, 2026 entitled “Procedures and Principles on Liquidation and Payments in Ten Questions”, and the public record of the legislative process. These assessments may need to be updated in light of the Board’s implementing decisions and the decisions of the courts.
1. Background
The Law re-regulates, at the level of statute, the liquidation process that began on September 17, 2026. The initial regime established by Board decisions and announcements was narrowed by the announcement of September 28, 2026 and the interim payment decision of September 30, 2026; the bill submitted to Parliament on October 9, 2026 was adopted by the Planning and Budget Committee on October 14 and by the Plenary on October 22. The final sentence of Article 3/5, which treats holders of pending orders as fund unit holders, was added to the text by a motion tabled during the Plenary debate; on October 22 the Board issued a press announcement on settlement finality and PBLK.
Date | Development |
September 17, 2026 | Bulletins No. 2026/60 and 2026/61: suspension of trading in the TEFAS funds of seven portfolio management companies; liquidation procedures and principles for 131 funds. A/6: redemption orders placed on TEFAS and not executed to be booked as a debt of the fund and paid with priority. |
September 20, 2026 | Bulletin No. 2026/62: extension of the liquidation period to six months. |
September 22, 2026 | Measures regarding six brokerage firms: outflows from accounts opened in the name of the firms and of investors made subject to the approval of Borsa İstanbul, Takasbank and MKK. |
September 28, 2026 | Board press announcement: orders transmitted by 13:30 on September 16 remain in the ordinary process; orders placed thereafter or canceled on September 17, and orders not executed because of default or non-announcement of the price, fall within the liquidation. |
September 30, 2026 | Board decision (64/1775): interim payment of up to TRY 1,000,000 on the basis of the net investment amount to unit holders whose reconciliation is complete; the Board’s announcement of October 1 clarified that the payment is made to each investor separately for each fund and that the cap applies per fund. Bulletin No. 2026/67: temporary suspension of the activities of Tera Yatırım Menkul Değerler. |
October 8–13, 2026 | Payments in the money market funds liquidated by Ziraat Bankası; target of completing the liquidation of the A1, Bulls and Pardus funds; interim payments in the remaining funds deferred until after the Law. |
October 9–14, 2026 | Bill No. 2/3939 submitted to Parliament; adopted by the Planning and Budget Committee with motions on the definition of “fund unit holder”, the indexation method and reconciliation with MKK. An opposition motion for priority payment of PBLK claims under CML Art. 79 was not adopted. |
October 16, 2026 | Bulletin No. 2026/70 (Board Decision No. 70/1821 of October 15, 2026): the Hedef Portföy funds removed from the scope of the interim payment decision of September 30 (64/1775); their liquidation to be conducted under the principles set on September 30 for the A1, Bulls and Pardus funds (64/1770). By October 21 the liquidation of 18 of the 31 funds was completed. |
October 19–20, 2026 | Presidential Decision No. 2026/351: the Chairman of the Public Oversight, Accounting and Auditing Standards Authority (the former CMB Chairman) removed from office. |
October 20–21, 2026 | Bulletin No. 2026/72: temporary suspension, under CML Art. 97/1, of the capital market activities of Alnus, Bulls and Pusula Yatırım with effect from October 21, 2026. |
October 21–22, 2026 | During the Plenary debate, the sentence treating holders of pending orders as fund unit holders was added to Art. 3/5 by motion (night of October 21). The Board’s “Press Announcement on Settlement Finality and PBLK Matters” of October 22: a sell order transmitted to TEFAS is not in itself a completed settlement; settlement is completed when the cash is transferred to the investor’s account and the unit ownership record is removed. The bill was adopted on the evening of October 22. At the Fund Coordination Board meeting held the same day it was announced that the number of funds in liquidation had fallen from 131 to 47 and that TRY 49.7 billion had been paid to 55,755 accounts to date. |
October 26, 2026 | Bulletin No. 2026/74: professional client and qualified investor thresholds raised; amendments to items (4.3) and (12.5) of the Investment Funds Guide (announced the same day by press release). Bulletin No. 2026/75: temporary suspension of the activities of Tera Portföy and Pusula Portföy under CML Art. 97/1; İş Bankası and Ziraat Bankası appointed to liquidate their funds outside the liquidation list and their real estate and venture capital funds. |
October 27, 2026 | Law No. 7596, Official Gazette No. 33413; in force with effect from September 17, 2026 (Art. 8). Bulletin No. 2026/76 (Decision No. 76/1903): procedures and principles for the implementation of the Law; commencement of the liquidation of, and interim payments in, the funds of Tera, Pusula and Atlas Portföy. The Board’s guide “Procedures and Principles on Liquidation and Payments in Ten Questions”. |
2. What Does the Law Provide?
Below we summarize, in article order, the provisions of the Law that directly concern investors.
Scope and definitions (Arts. 1–2)
The Law applies to the funds whose liquidation was decided by the Board’s decisions of September 17, 2026 under CML Art. 128 and whose liquidation had not been completed on the date of publication (Art. 1/1). The Law expressly states that it does not create a general or permanent liquidation and liability regime for other investment funds (Art. 1/2). A “fund unit holder” is, subject to Art. 3/6, the holder of participation units who is determined, as a result of the reconciliation of the records of MKK and the institution in charge of the liquidation, to be entitled to payment from the liquidation balance (Art. 2/1-c). This definition shows that the act that determines the investor’s position is the reconciliation; objecting to the reconciliation result is therefore important.
Conduct of the liquidation and the Board’s powers (Art. 3/1–3)
The liquidation is conducted by the institutions in charge of the liquidation under the supervision and oversight of the Board. The Board is authorized to determine the stages of the liquidation, the valuation principles, the manner in which fund unit holding is determined, interim and final payments, the order of distribution and other procedures and principles (Art. 3/1). Where the Board determines that the exchange price does not reflect the true value, methods such as buy-backs, block sales, special transaction notifications and off-exchange sales may be used, and buyers may be prohibited from selling for a certain period (Art. 3/2). Amounts collected after the liquidation is completed are transferred to the recovery account (Art. 3/3). For investors, these provisions mean that all critical decisions in the liquidation, including the order of distribution, will be taken by Board acts, each of which is subject to judicial review as a separate administrative act.
Duty to provide information and documents (Art. 3/4)
MKK, Takasbank, the Exchange, the institutions in charge of the liquidation, portfolio management companies, portfolio custodians and other institutions are required to provide the Board, the ICC (YTM) and the SDIF, on request and without delay, with the information and documents necessary for the implementation of the Law, and may not refuse on the basis of confidentiality provisions (Art. 3/4). This duty does not confer a direct right of access on investors; it does, however, show that the records will be gathered by the public authorities and provides a basis for requests for the production of documents in future litigation.
Determination of fund unit holding and pending TEFAS orders (Art. 3/5)
Fund unit holding is determined on a fund and account basis by the institutions in charge of the liquidation through reconciliation with MKK records. The second sentence of the paragraph is the most important provision of the Law for investors: in respect of orders relating to the funds under liquidation that were transmitted to TEFAS on or before September 17, 2026 but could not be executed because of the fund’s default and/or the non-announcement of the unit price, those whose participation units were blocked are subject to the liquidation provisions of the Law “in the capacity of fund unit holders”.
The consequences of this provision can be summarized as follows. First, in the liquidation distribution these investors will be treated under the same regime as unit holders who placed no order; the priority payment under A/6 should not be expected to be applied by the administration. The provision does not expressly state that a redemption claim alleged to have arisen earlier is extinguished; the existence and protection of that claim is a separate legal debate (see Section 4). Second, the value on which the liquidation payment is based is not the unit price at the date of the order but the liquidation balance and, where cash is insufficient, the net investment amount. Third, since the provision also covers September 17, 2026, the 13:30 on September 16 cut-off in the announcement of September 28 no longer has separate significance at the level of statute; orders transmitted after that time or on September 17, even if they do not meet the conditions of the provision, are in any event in the position of unit holders because they were not executed.
Which orders are covered? The Law lists “default” and “non-announcement of the price” as the grounds and takes as its criterion those whose units were “blocked”. Whether orders that were priced and whose value date had passed, but which were not paid because of the fund’s default, fall within this scope is debatable on the wording: the provision refers to orders that “could not be executed”, whereas these orders were executed but not paid. Our current assessment is that the Board is likely in practice to treat this group too as unit holders where the units remain blocked, while this is also the group in which the accrued-claim argument is strongest. By contrast, for an investor whose order was canceled without consent on September 17 and whose block was lifted, the outcome does not change, since the units are already in the account; that investor is likewise a unit holder. Investors whose units were redeemed in the MKK records require a separate analysis.
The Board’s announcement of October 22, 2026. In an announcement issued while the Plenary debate was under way, the Board stated that the settlement finality rule in CML Art. 79 does not cover every TEFAS order regardless of its stage; that TEFAS is a platform on which participation units are purchased from and redeemed by the founder, so that a sell order does not in itself amount to a completed settlement; that a record in the PBLK sub-account does not show that settlement has begun or been completed; and that settlement is completed when the cash is transferred to the investor’s account and the unit ownership record is removed. According to the announcement, holders of unsettled orders are among the 455,758 fund unit holders and do not form a separate group; the regulation does not affect completed transactions. The announcement sets out in advance the framework of the Board’s defense in future litigation.
Exclusion from payment (Art. 3/6)
Where acts falling under CML Art. 104 (market disruptive actions), Art. 106 (insider dealing) or Art. 107 (market manipulation) were committed by the funds under liquidation or in concert with them, no payment is made from the liquidation or the recovery account to the persons and institutions determined by the Board to have committed those acts or acted in concert with them. The exclusion is linked not to a criminal conviction but to a Board determination; that determination is an administrative act and may be challenged in an annulment action.
Net investment amount, interim payment and final payment (Art. 4)
The Law provides for two payment regimes. If the distributable cash is sufficient to cover the total unit value calculated at the end-of-day price preceding the liquidation decision (in practice, the price of September 16, 2026), payment is made on that basis. If it is not, payments take into account the “net investment amount”: each cash inflow into and outflow from the fund actually made by the investor is indexed, on a pro rata temporis basis, by the arithmetic average of the CPI and domestic PPI changes announced by TurkStat up to the liquidation date; where inflows exceed outflows, outflows are deducted on a first-in, first-out basis and the remaining amount is calculated by MKK (Art. 4/1).
This method has three practical consequences. For an investor who held the fund for a long time and saw its value rise, there may be a large gap between the unit value on September 16 and the net investment amount; where cash is insufficient, payment follows the latter. An investor who previously withdrew more than the principal invested may have a net investment amount of zero. How the “cash actually paid in” will be calculated for investors who entered the fund by transfer of units rather than by cash will be clarified by the Board’s procedures and principles. Finally, the net investment amount is a basis for calculating payments; where the fund’s distributable assets are insufficient, it does not guarantee recovery of that amount in full.
Interim payment (Art. 4/2–3). In funds designated by the Board, and capped at the unindexed portion of the net investment amount, an interim payment may be made in the full amount to investors whose net investment amount is below TRY 1,000,000 and of up to TRY 1,000,000 to those whose net investment amount is TRY 1,000,000 or more. Except for money market funds, the interim payment may not exceed the total value of the units in the investor’s account at the previous day’s close. Where cash is insufficient, the Board may decide to pay starting from the lowest net investment amount, so that as many unit holders as possible benefit in full, or to set a minimum interim payment amount. No units are redeemed against the interim payment; the units are redeemed at the final liquidation payment, and the interim payment is set off against the final payment (Art. 4/5). The Board’s implementing principles in Bulletin No. 2026/76 give these rules concrete form (Section 3). Our current assessment is that receiving an interim payment does not of itself extinguish the investor’s right to challenge the Law and its implementing acts before the courts, but care should be taken that the documents to be signed contain no release or waiver.
Voluntary return (Art. 4/4). Persons who redeemed their units and received payment before the liquidation date may voluntarily return to accounts announced by the Board the return exceeding the indexed amount of their inflows; a separate general share return account is also provided for those who profited from shares subject to Arts. 104, 106 and 107. The two channels are distinct: the first concerns gains on exits from the funds, the second gains on shares subject to market abuse; the distribution rule in Bulletin 2026/76 (item 11) governs only the second, the general share return account. Amounts transferred to either account are, under the Law’s definition, tracked per fund within the recovery account held at the SDIF (Art. 2/1-ç). The provision is not mandatory; completed redemptions are not reversed, and a return is not framed as a ground extinguishing civil, administrative or criminal liability.
Unlawfully removed value, personal liability and SDIF enforcement (Art. 5)
Value removed from fund assets in breach of the regulations, or in a formally compliant manner but without a genuine economic purpose in the fund’s interest, in favor of related parties, controlling shareholders, managers and persons controlled by them is deemed value unlawfully removed from the fund (Art. 5/1). The founding or managing portfolio management company is liable for the loss first; where recovery from it is not possible, the natural and legal persons determined by the Board and those acting in concert with them are personally liable, and leaving office does not remove that liability (Art. 5/2). The Board determines the loss and those responsible for each fund and notifies the SDIF, which pursues enforcement under Law No. 6183 and the relevant provisions of the Banking Law No. 5411. The Istanbul administrative courts have jurisdiction over actions brought in this context (Art. 5/4). For investors the result is twofold: the assets of those responsible will be recovered for the fund through public enforcement; individual damages actions remain available, but because investors will be competing over the same assets with the SDIF, which can act with far broader powers and far greater speed, the recovery value of such actions may fall and, if the SDIF seizes all of the assets of those responsible, may disappear entirely.
Seizure, trusteeship and the recovery account (Art. 6)
In investigations connected with the funds, seizure orders may be issued under Art. 128 of the Criminal Procedure Code; money and capital market instruments that can be directly returned to the fund are returned to the fund or the recovery account under Art. 131, and the reports underlying the Board’s criminal complaints are deemed reports within the meaning of Art. 128 (Art. 6/1). The SDIF may be appointed trustee over assets that cannot be transferred to the fund and may sell them without awaiting the outcome of the proceedings (Art. 6/2). Confiscated assets are transferred not to the Treasury but to the fund or the recovery account (Art. 6/3). Amounts in the recovery account may be used only for the liquidation of the relevant fund and payments to unit holders; they cannot be attached or made subject to interim injunctions or attachment (Art. 6/5). Amounts accumulated after the liquidation is completed are transferred to the ICC and paid pro rata to unit holdings; other than in the final distribution, where an investor’s share falls below a minimum payment amount to be set by the Board, the balance is tracked in the investor’s name and paid in subsequent distributions (Art. 6/6). The allocation among funds of recoveries connected with more than one fund is determined by the Board by reference to criteria such as fund type, liquidity adequacy ratio, unit-holding structure and liquidation ratio (Art. 6/7). Completion of a fund’s liquidation does not extinguish the investor’s right to share in value recovered later.
Procedures and principles; entry into force (Arts. 7–8)
The procedures and principles for the implementation of the Law are determined by the Board, after obtaining the SDIF’s opinion on matters within the SDIF’s remit (Art. 7/2); the Board and the ICC may procure external legal, accounting and software services (Art. 7/1). The Law entered into force on publication with effect from September 17, 2026 (Art. 8). The retroactive effect is intended to provide a statutory basis for the practice conducted under Board decisions since September 17; at the same time, it is the subject of the criticism that rights alleged to have arisen on that date have been altered retrospectively by statute.
3. The Board’s Latest Bulletins (2026/72, 2026/74, 2026/75 and 2026/76)
Suspended brokerage firms and the ICC principle decision (2026/72, October 20, 2026)
The Board temporarily suspended the capital market activities of Alnus Yatırım, Bulls Yatırım and Pusula Yatırım with effect from 00:01 on October 21, 2026 under CML Art. 97/1, Art. 67/1-b of Communiqué III-39.1 and Art. 28/2 of Communiqué Series V No. 34; unlike the measure applied to Tera Yatırım on September 30 under CML Art. 96, the basis is capital adequacy. Client cash and securities held at these firms are outside the Law; client assets are separate from the firm’s own assets (CML Art. 46), and where a firm cannot meet its cash payment or delivery obligations the ICC steps in upon a Board compensation decision (CML Art. 82 et seq.). The Principle Decision i-SPK.83.1 in the same Bulletin regulates applications for the return of time-barred deposits and receivables transferred to the ICC; it has no bearing on liquidation or compensation.
Professional client and qualified investor thresholds; Guide amendment (2026/74, October 26, 2026)
The Board raised the total financial assets required for professional client status on request from TRY 10,000,000 to TRY 50,000,000 and the trading volume requirement from TRY 5,000,000 to TRY 25,000,000, reset the amounts for legal entities and updated the qualified investor conditions accordingly. The exemption introduced in December 2025 for real estate and venture capital funds has been removed. Clients who acquired professional client or qualified investor status under the previous amounts may only place sell orders in capital market instruments reserved for qualified investors unless they evidence to their investment firm, in writing or electronically, that they meet the new conditions. The same Bulletin also amends items (4.3) and (12.5) of the Investment Funds Guide: the staged compliance dates of October 31 and November 30, 2026 and the final date of December 31, 2026 for the portfolio and investment limits have been removed and a single date of January 31, 2027 set for full compliance; the Guide exemption for money and capital market instruments of public institutions and their affiliates has been repealed (the provisions of Communiqué III-52.1 remain). The Board also announced these amendments to item (4.3) of the Guide by press release on the same day. The changes to the thresholds and the compliance timetable are prospective: sales made in September 2026 and the compliance statements of August 31 to September 3, 2026 are assessed under the rules in force at the time; a subsequent change is not direct evidence that the previous rules were inadequate.
Suspension of Tera Portföy and Pusula Portföy; liquidation of funds not on the list (2026/75, October 26, 2026)
The Board temporarily suspended the capital market activities of Tera Portföy and Pusula Portföy under CML Art. 97/1 and appointed Türkiye İş Bankası (Tera funds) and T.C. Ziraat Bankası (Pusula funds) to liquidate those companies’ investment funds other than those placed into liquidation by the decisions of September 17, together with their real estate and venture capital funds. The funds suspended from trading on September 17 but not placed on the liquidation list, and the hedge funds sold outside TEFAS, thus also enter liquidation. These funds fall outside Law No. 7596 (Art. 1/1–2); the Law’s net investment amount, interim payment and Art. 3/5 provisions do not apply to them. The Bulletin does not regulate the procedure for the liquidation or the treatment of priced but unpaid redemption amounts. Our current assessment is that in these funds the proceeds of units whose redemption has been completed but not paid constitute a debt of the fund which, as a rule, should be satisfied before any distribution to unit holders; however, since the liquidation procedure to be set by the Board for these funds may affect the ranking of those claims, investors should notify the appointed bank and the Board in writing of their claims and their unit holdings. The appointed bank is the counterparty for the liquidation steps and for applications; it is not personally liable with its own assets for the unpaid redemption amount, which is a claim against the fund’s assets. The suspension of the founder does not affect the fund’s assets (CML Art. 52). Two points call for attention. First, Bulletin 2026/75 appoints the bank as liquidator; the identity of the pre-liquidation portfolio custodian may differ from fund to fund and should be established from the prospectus and the KAP records. The custodian’s liability arising from its supervisory and control duties in the pre-liquidation period (CML Art. 56; Communiqué III-56.1) is assessed separately from the functions subsequently assumed by the liquidator; even where the two capacities coincide in the same bank, the liability regimes differ. Second, the Board’s guide of October 27 describes the scope of the procedures and principles as the Tera, Pusula and Atlas funds placed into liquidation by the decisions of September 17; it should not be assumed that the Law’s net investment amount and interim payment provisions will automatically apply to the funds covered by Bulletin 2026/75.
Procedures and principles for liquidation and interim payments under the Law (2026/76, October 27, 2026)
On the day the Law was published, the Board’s Decision-Making Body, by Decision No. 76/1903, determined the procedures and principles for certain matters left to it by the Law (Bulletin No. 2026/76). The regulation concerns principally the commencement of the liquidation and the order and amount of interim payments.
Subject | Rule in Bulletin No. 2026/76 |
Scope and liquidating banks (1–2) | The liquidation of the funds under liquidation founded by Tera Portföy, Pusula Portföy and Atlas Portföy commences. The Pusula and Atlas funds are liquidated by T.C. Ziraat Bankası and the Tera funds by Türkiye İş Bankası; the process is conducted under the Board’s coordination together with the SDIF, Borsa İstanbul, MKK, Takasbank and the BRSA. The A1, Bulls, Pardus and Hedef funds remain in the ordinary liquidation model commenced by the decisions of September 30 (64/1770) and October 15 (70/1821). |
Commencement and order of interim payments (3–4, 7) | Interim payments are made to the unit holders of these funds under Art. 4/2–3 of the Law and the Board’s decisions of September 30 and October 15, 2026. Payments begin with funds whose name contains “money market”. In other funds the order is determined by the ratio of each fund’s distributable cash to its total interim payment liability, starting with the highest ratio; among funds with similar ratios, the fund in which the largest number of investors can be paid in full from available cash comes first. |
Funds with sufficient cash (5) | Where a fund’s distributable cash covers the total amount calculated at the end-of-day price preceding the liquidation decision, a final payment is made directly instead of an interim payment. |
Amount of the interim payment (6) | The interim payment per fund may not exceed the net investment amount calculated by MKK without indexation, nor TRY 1,000,000. Where cash is insufficient, the payment is limited to the lowest of (i) the net investment amount, (ii) the unit value calculated at the close of September 16, 2026 for money market funds and at the close of the day preceding the calculation date for other funds, and (iii) the TRY 1,000,000 cap. For equity and hedge funds, the second criterion is the current (reduced) value of the units; the interim payment may therefore fall well below the net investment amount. |
Insufficient cash within a fund (8) | An order may be established from the unit holder with the lowest interim payment amount to the highest, and/or the Board may approve payment up to a minimum interim payment amount set so as to pay the largest number of investors. |
Exclusion from payment (9) | No payment is made to persons and institutions determined by the Board under Art. 3/6 and notified by MKK to the liquidating banks. |
Redemption of units and set-off (10) | Interim payments are made without redemption of units; units are redeemed at the final liquidation payment and the interim payment is set off against the final amount. |
General share return account (11) | Amounts in the general share return account, formed by the voluntary return under the second sentence of Art. 4/4 of gains on shares subject to market abuse, are transferred first to the money market funds with the lowest interim-payment coverage ratio and the largest number of investors with a net investment amount below TRY 1,000,000, and any remainder to other funds on the same basis. |
Assessment. The principles make the Law’s interim payment mechanism operational and confirm that payments will begin in the Tera, Pusula and Atlas funds; no payment timetable has been announced. Two points stand out for investors. First, since in funds other than money market funds the interim payment cap is tied to the current value of the units, the interim payment in funds whose unit price has fallen sharply may be well below TRY 1,000,000 and below the net investment amount; and because the coverage ratio per fund determines the order of payment, investors in funds with weak cash positions will be paid later. Second, the Bulletin contains no rule on the notification of reconciliation results and the objection procedure, on how orders held in PBLK will be recorded in the reconciliation under Art. 3/5 of the Law, on orders canceled on September 17, on orders priced but unpaid, or on the details of the net investment amount calculation. Our current assessment is that these matters will be shaped either by the practice of MKK and the liquidating banks or by subsequent Board decisions, and that investors should therefore request the reconciliation and net investment amount notification in writing. The Board decision of October 15, 2026 (No. 70/1821) referred to in the Bulletin is the decision that removed the Hedef Portföy funds from the scope of the interim payment decision of September 30 (64/1775) and made their liquidation subject to the principles set by Decision No. 64/1770 (Bulletin 2026/70); it does not create any new payment priority for investors in the Tera, Pusula and Atlas funds. On October 27 the Board also published an explanatory guide entitled “Procedures and Principles on Liquidation and Payments in Ten Questions”. The guide confirms that the scope is limited to the Tera, Pusula and Atlas funds placed into liquidation by the decisions of September 17; that the interim payment becomes a final payment where the fund’s distributable cash covers the total amount calculated on the unit price at the close of the day preceding the liquidation decision and the number of units eligible for payment; that units are redeemed at the final payment; that the payment-order and minimum-amount methods in case of insufficient cash are subject to Board approval; and that the general share return account is distributed first to the money market funds with the lowest coverage ratio and the largest number of small investors. The guide contains no new information on the notification of the reconciliation and the objection procedure, or on the treatment of orders held in PBLK.
4. Comparison with the Previous Regime: from A/6 to Art. 3/5
The table below compares the regime discussed in our note of September 21 with the regime introduced by the Law.
Subject | Bulletin 2026/61 and the practice of September 28, 2026 | Law No. 7596 |
Pending TEFAS orders (investors who placed a sell order but were not paid) | Paragraph A/6 of the Board’s Bulletin No. 2026/61 of September 17 required the proceeds of sell orders placed on TEFAS but not executed to be booked as a debt of the fund and paid before any distribution to the other unit holders. By its announcement of September 28 the Board narrowed that protection: only orders transmitted by 13:30 on September 16 remained in the ordinary process, while orders placed later, and orders not executed because of the fund’s default or the non-announcement of the price, were brought within the liquidation. | Article 3/5 of the Law treats investors whose units were blocked under orders transmitted to TEFAS on or before September 17 but not executed because of the fund’s default or the non-announcement of the price as “fund unit holders”, as if no sell order had been placed. Such investors rank equally with the other unit holders in the liquidation; no priority payment should be expected from the Board or the liquidating bank. The argument that the sell order gave rise to a claim on that very day, and that such a claim cannot be extinguished by statute, can only be pursued before the courts and the Constitutional Court. |
Basis of payment (the amount on which the investor is paid) | For an investor within A/6, payment was to be calculated at the price of the day on which the sell order was placed (in our assessment, the September 16 price). A unit holder was to be paid pro rata from the liquidation balance remaining after the fund’s assets had been sold. | If the cash raised from the sale of the fund’s assets covers the total value of all units calculated at the closing price of September 16, payment is made at that price. If the cash is insufficient, payment is made on the basis of the “net investment amount”: the money the investor actually paid into the fund, less the money withdrawn, adjusted for inflation (the average of the CPI and the domestic PPI) (Art. 4/1). The price of the day on which the sell order was placed is not used in the liquidation payment; it matters only for the claim and damages arguments to be raised before the courts. |
Interim payment (a partial payment made before the final liquidation) | By its decision of September 30 the Board resolved to make interim payments of up to TRY 1,000,000 to unit holders whose reconciliation was complete; the statutory basis for that payment was, however, open to debate. | Article 4 of the Law gives the interim payment an express statutory basis. The interim payment per fund may not exceed the investor’s net investment amount before inflation adjustment, nor TRY 1,000,000; in funds other than money market funds it may not exceed the current value of the units either. Under Bulletin 2026/76, payments begin with money market funds; the other funds are ranked by the ratio of their available cash to their interim payment liability; where a fund’s cash is insufficient, the Board may decide to start with the smallest investors or to pay everyone a minimum amount. The interim payment is deducted from the final liquidation payment. |
Reconciliation (establishing from the records who holds how many units in which fund) | Paragraph A/2 of Bulletin 2026/61 required the liquidating bank to reconcile the units in circulation, the investor accounts and the unexecuted orders against the records within two business days. | The Law makes the question of who is a fund unit holder depend on the reconciliation to be carried out by the liquidating bank against the MKK records, fund by fund and account by account (Art. 2/1-c and Art. 3/5). That reconciliation is the act that determines the investor’s legal position; its result should be requested in writing and, if wrong, challenged in time. |
Assets of those responsible (recovery from those who caused the fund’s loss) | Only the general rules applied against those who caused the fund’s loss: an investor could try to reach the assets of those responsible through a damages action of his or her own and a precautionary attachment. | Articles 5 and 6 of the Law entrust this task to the public authorities: the Board determines the loss and those responsible; the SDIF pursues the assets of those responsible under the public-receivables procedure (Law No. 6183); assets seized in criminal investigations are returned to the fund; and the amounts collected are held in a “recovery account” that cannot be attached and are distributed to investors even after the fund’s liquidation has ended. Actions arising from this enforcement are heard by the Istanbul administrative courts. Investors may still bring their own damages actions, but because they will be competing for the same assets with the SDIF, which acts with far broader powers and greater speed, their prospects of recovery may be reduced and, if the SDIF seizes all of the assets, eliminated altogether. |
Exclusion from payment | There was no such rule. | No payment is made from the liquidation or the recovery account to persons and institutions determined by the Board to have committed, or participated in, market disruption, insider dealing or market fraud (CML Arts. 104, 106 and 107) (Art. 3/6). |
Judicial remedies | Annulment actions could be brought before the administrative courts against the Board’s decisions and announcements within sixty days of their publication or of the investor becoming aware of them. | Final and enforceable acts issued by the Board in implementing the Law (for example, the refusal of a status request or a decision on the ranking of interim payments) may be challenged before the administrative courts, subject to the nature of the act and the applicable time limits. The result of the reconciliation against the MKK records and the calculations of the liquidating bank do not in themselves constitute such an act; the appropriate remedy against them is determined separately, having regard to the institution issuing the act and its legal nature. The Law itself can be reviewed only through constitutional review of the statute, that is, an annulment action that the opposition may bring or a referral to the Constitutional Court by the administrative court in a pending case. An individual application, available once the ordinary remedies have been exhausted, does not annul the Law; it is directed at establishing a violation of fundamental rights caused by the implementing acts. |
The settlement finality debate. During the parliamentary debate it was argued publicly that CML Art. 79 protects the orders held in PBLK. On this view, the TEFAS Operating Principles debit the member once orders are matched, place a member that fails to pay on the value date in default, and provide that restrictions on the founder’s operations do not remove its obligation to redeem; the Investment Funds Guide likewise requires a sell order to be booked as a debt of the fund on the order date. It is therefore contended that converting an order transmitted to TEFAS on September 16 into a unit holding by statute amounts to the cancellation prohibited by Art. 79. The Board, in its announcement of October 22, stated that settlement is completed by the transfer of cash and the removal of the record and that a PBLK record does not show that settlement has begun. Our current assessment is as follows: given the wording of the Law, the Board or the liquidating banks should not be expected to grant priority to PBLK orders at the administrative stage; the argument based on Art. 79 and the TEFAS Principles is a matter for the plea of unconstitutionality in actions against the Law’s implementing acts and, ultimately, for assessment by the Constitutional Court and the ECtHR.
5. Where Do You Stand? The Investor’s Legal Position after the Law
The table below updates the classification of situations in our note of September 21 in light of the Law. Each row sets out the regime to which the investor is now subject.
Scenario | Legal position after the Law |
A Fund on the liquidation list; sell order transmitted to TEFAS on or before September 17, 2026; order not executed because of the fund’s default or non-announcement of the price; units blocked in PBLK | Subject to the liquidation as a fund unit holder under Art. 3/5; the A/6 priority is not expected to be recognized in the administrative liquidation, while the claim alleged to have arisen earlier and the CML Art. 79 argument are pursued before the courts. The net investment amount, interim payment and final distribution regime applies. |
A-2 Order placed in time and taken into PBLK, but canceled on September 17 without the investor’s consent | As the block was lifted, the units are in the account; the investor is a unit holder subject to the Art. 4 regime. The outcome is the same as in scenario A. |
B Unit holder in a fund on the liquidation list; no sell order placed | The position principally regulated by the Law: reconciliation (Art. 3/5), net investment amount (Art. 4/1), interim payment (Art. 4/2–3), final distribution and additional payment from the recovery account (Art. 6/6). |
C Fund on the liquidation list; order placed after 13:30 on September 16 or on September 17 | Whether the order meets the conditions of Art. 3/5 (non-execution because of default or non-announcement of the price, and blocking) depends on its fate; even if it does not, the investor is a unit holder because the order was not executed (the same outcome as under the September 28 announcement). |
D Sell order priced and value date passed, but the proceeds not paid because of the fund’s default | The application of Art. 3/5 to this group is debatable on the wording (the order was executed, the proceeds were not paid); in practice the Board is likely to treat this group too as unit holders where the units are blocked. If the units were redeemed in the MKK records, the position requires separate analysis. |
E Unit holder in a fund not on the liquidation list (a fund suspended from trading or outside TEFAS, including a fund in default on redemption payments and the real estate and venture capital funds covered by Bulletin 2026/75) | The Law does not apply (Art. 1/2). In the Tera and Pusula Portföy funds the liquidation will be conducted under Bulletin 2026/75 by the appointed bank (İş Bankası, Ziraat Bankası) rather than the founder; the procedure has not yet been determined. The claim for the redemption amount is a debt of the fund against the fund’s assets; the founder’s liability is subject to the general provisions. |
F Investor holding free cash unrelated to the funds at an investment firm whose activities have been suspended (Tera Yatırım, September 30; Alnus, Bulls and Pusula Yatırım, October 21) | Outside the Law. Client cash is not part of the investment firm’s assets (CML Art. 46); the claim arises from contract. An investment firm’s failure to meet its cash payment obligations is the domain of the ICC (CML Art. 82 et seq.). |
G Investor who redeemed units and received payment before the liquidation decision | The transaction is complete; the Law does not reverse it. Under Art. 4/4, return of the gain exceeding the indexed inflow is voluntary. |
H Person determined by the Board to have committed, or acted in concert in, acts under Arts. 104, 106 or 107 | No payment from the liquidation or the recovery account (Art. 3/6). |
I Institutional investor (company, foundation, pension fund, etc.) | Which of the above positions applies depends on the order status; the Law does not distinguish between natural and legal persons. |
J Investor who acquired professional client or qualified investor status under the previous thresholds | Under Bulletin No. 2026/74, unless the investor demonstrates to the investment firm that the updated eligibility requirements applicable to the relevant status are met, the investor may only place sell orders in capital market instruments reserved for qualified investors; existing positions are retained. |
Conclusion
Law No. 7596 has moved the liquidation process from Board decisions to the level of statute and has introduced powerful tools for the recovery of the assets of those responsible through public enforcement and for priority interim payments to small investors. With the Board’s procedures and principles in Bulletin No. 2026/76, the liquidation of, and interim payments in, the Tera, Pusula and Atlas funds are now actually beginning; under Bulletin 2026/75, the Tera and Pusula funds outside the liquidation list also enter liquidation conducted by banks. In light of the same Law, the priority position recognized by Bulletin No. 2026/61 for investors who had transmitted their intention to exit to TEFAS before the liquidation decision is no longer expected to be applied in the administrative liquidation process; these investors are treated under the same regime as other unit holders. For these investors, any challenge to their treatment under the new regime is likely to require judicial review of the implementing acts and, where applicable, constitutional scrutiny, rather than reliance on administrative requests alone. At this stage, investors’ re-assessment of their position under the Law, scrutiny of the reconciliation and net investment amount notifications, complete preservation of their records and written reservation of their rights will be decisive both for obtaining the maximum benefit from the liquidation process and for the sound assertion of any claims that may arise in the future.
KECOS is following the process closely and will keep you informed as developments unfold.
