Lack of Fund Liquidation and Manipulation Provisions in Investor Compensation Center Legislation
According to capital markets experts, fund liquidations and potential manipulation were not taken into account when the Investor Compensation Center was established. Payments to victims of the September 17 fund crisis remain uncertain.
Experts stated that the liquidation of funds and the possibility of manipulation were not foreseen when drafting the Investor Compensation Center legislation. Uncertainty persists regarding how payments will be made to victims of the fund crisis that emerged on September 17.
Scope of the Investor Compensation Center and Expert Evaluations
Experts emphasized that the Investor Compensation Center (ICC) is designed to compensate for losses caused by brokerage firms and financial institutions that fail to fulfill their obligations. However, it was stated that in the ongoing fund scandal, the fund and its revenues cannot be utilized.
Payments to Victims Awaited in the Fund Crisis
Payments to investors remain uncertain in the crisis that broke out on September 17 and resulted in the liquidation of numerous funds. Although it was announced that payments would begin immediately for account holders whose reconciliations were completed, starting with money market funds, no payments have been made yet.
Accounts Established for Revenue Refunds
Last week, fund-based accounts were established to enable individuals who generated high revenues from these funds to return their gains. Fatma Betül Sayan Kaya, the resigned AK Party Deputy Chairman, became the first person to deposit money into this account.
Legislative Deficiency Between ICC and Fund Liquidations
As the Investor Compensation Center, established in 2013 with regulations published in 2015, came to the agenda, experts conveyed that the center is not directly related to this scandal. It was noted that while funds are transferred to another company if a portfolio management company goes bankrupt, the possibility of funds being subject to manipulation was not considered when drafting the legislation.
Structure and Revenue Sources of the Investor Compensation Center
Managed and represented by the Capital Markets Board, the ICC's board of directors is carried out by the CMB Board of Directors. The center's revenues consist of annual dues, while fees ranging between 500 and 1,000 TL are also charged for derivative instruments based on contract sizes.
Information Obligations of Investment Firms
Investment firms are required to provide sufficient information to investors regarding the ICC and the scope of protection during capital market activities. On the other hand, these institutions cannot use the protection provided by the ICC for advertising purposes.