New Regulations for Hedge Funds from the Capital Markets Board
The Capital Markets Board has imposed restrictions on share purchases by hedge funds in order to protect small investors and prevent speculative movements.
New regulations published by the Capital Markets Board limit the excessive growth of hedge funds in stocks with low actual circulation, while banning over-the-counter share trading.
Stock Limits Introduced for Hedge Funds
The Capital Markets Board restricted hedge funds from buying shares without limitation and introduced a requirement to disclose their portfolio assets on a weekly basis. A hedge fund will be able to hold at most certain percentages of the actually circulating shares of a listed company.
BIST 30 Excluded from the Scope
While gradual restrictions are applied based on the actual circulation rate, BIST 30 stocks were exempted from this regulation. It aims to prevent excessive price increases driven by funds in stocks with low circulation and to prevent small investors from suffering losses.
Positions Will Be Gradually Reduced
The total of investments with a weight of more than 5 percent in the portfolio of hedge funds cannot exceed 20 percent. Funds exceeding these limits will be required to gradually reduce their positions by December 31, 2026.
New Obligations for Managers and Companies
The minimum paid-up capital amount for broadly authorized portfolio management companies will be 500 million liras. The total number of hedge funds to be established cannot exceed the number of portfolio managers employed in the company.
Restriction on Over-the-Counter Transactions and Insider Sales
Hedge funds are strictly prohibited from buying and selling partnership shares over-the-counter. Major shareholders will be able to sell a limited portion of the capital outside the stock exchange within 12 months and will be required to obtain approval in cases exceeding this limit.