Frequently Asked Questions Regarding the Investor Compensation Center and the Fund Crisis
It was stated that the Investor Compensation Center does not cover the recent fund scandal and individual losses, as the system is designed for financial institutions failing to fulfill their obligations.
It has been reported that the Investor Compensation Center, established to implement the decisions of the Capital Markets Board, does not cover the recent fund scandal and individual investors. Experts emphasized that the main purpose of the center is to address intermediary institutions that fail to fulfill their obligations.
Establishment Purpose of the Investor Compensation Center
The Investor Compensation Center, established in 2015 to execute compensation and gradual liquidation decisions taken by the Capital Markets Board, has returned to the center of the agenda with the ongoing fund scandal.
Experts underlined that this center provides for the compensation of damages caused by intermediary institutions and financial institutions that fail to fulfill their obligations, and reported that the funds and revenues of the current fund scandal cannot be used for this purpose.
Uncertainties Regarding Payments
In the fund crisis that came to light on September 17 and resulted in the liquidation of numerous funds, the issue of when payments will be made to investors continues to maintain its uncertainty.
Although it was announced that payments would begin immediately for account holders whose reconciliations have been secured, starting with money market funds, no actual payments have been made so far.
Revenue Refunds and Newly Created Accounts
Last week, special accounts were created on a fund basis for the refund of incomes generated by individuals who obtained high returns from these funds.
In the shadow of the ongoing debates, resigned AK Party Deputy Chairman Fatma Betül Sayan Kaya went on record as the first person to deposit money into this new account.
Unexpected Situations and Loopholes in Legislation
Capital markets experts stated that the Investor Compensation Center has no direct relation to the scandal experienced and that the center only steps in case of the bankruptcy of an intermediary institution.
Experts clearly emphasized that when the legislation was drafted, it was never taken into account that funds would be subject to manipulation, and this situation was not foreseen in advance.
Management Structure and Revenue Sources of the Center
While the Investor Compensation Center is administered and represented by the Capital Markets Board, the CMB Board of Directors simultaneously acts as the board of directors of the ICC.
The main revenues of the center consist of annual dues, which are collected at certain rates based on investor-based custody balances and derivative instrument contract sizes.