Turkey Says Nearly Half a Million Investors Affected by Funds Liquidation

Nearly half a million individual investors hold stakes in more than 100 Turkish investment funds that authorities ordered to be liquidated following last week’s sharp market selloff, Turkey’s Capital Markets Board, or SPK, said on Wednesday.

The regulator said 455,758 individual investors were affected, citing records from Turkey’s central securities depository. The funds involved have combined assets of around $18 billion, highlighting the scale of the disruption in the country’s investment market.

The liquidation follows a period of intense pressure on Turkish investment funds, some of which struggled to meet redemption requests as investors sought to withdraw money during the stock market decline. The situation contributed to a broader liquidity crunch and forced some funds to sell more liquid assets to meet withdrawal demands.

Turkey’s main BIST-100 stock index fell more than 8% last week, marking its steepest weekly decline since March 2025. Authorities responded with measures aimed at strengthening financial stability, including increased central bank liquidity and temporary changes to some capital and margin requirements.

The SPK previously ordered the liquidation of 131 funds managed by seven portfolio management companies. State lenders Isbank and Ziraat Bank were appointed to oversee the process through Turkey’s electronic fund trading platform, TEFAS. The regulator has since extended the liquidation period to six months from three months, citing the structure of the funds and market conditions.

The market turmoil has also triggered a wider investigation into transactions involving several Turkish companies. The SPK filed criminal complaints related to share transactions involving Katilimevim, Gundogdu Gida and Destek Finans, while prosecutors expanded their investigation.

Turkey’s Justice Ministry said suspects face allegations including violations of capital markets law, membership in a criminal organization and aggravated fraud committed by company executives or others acting on behalf of companies. Several individuals have been detained and appeared in court, with some ordered to remain in custody pending trial.

The fund liquidation has raised concerns about liquidity management and the structure of Turkey’s equity market, particularly the concentration of some funds in relatively illiquid stocks. Authorities have described the problems as contained while taking steps to prevent further pressure from spreading through financial markets.

For investors, the immediate focus will be on the liquidation process, the value ultimately recovered from fund assets and the outcome of the ongoing investigations. The developments could also influence confidence in Turkey’s investment-fund industry and prompt closer scrutiny of liquidity risks in similar products.