Investment Funds in Liquidation: Legal Remedies Available to Investors

What happened?

In its press announcement dated 23 September 2026, the Capital Markets Board (SPK) stated that, pursuant to the decisions of its Decision-Making Body dated 17/09/2026, it had decided to liquidate 131 investment funds belonging to 7 portfolio management companies and that, according to the records of the Central Securities Depository, these funds had 455,758 individual investors. Details concerning the liquidation process, its duration and payments are published in SPK bulletins and announcements; it is important for investors to obtain up-to-date information directly from the SPK's official sources.

This article provides a general overview of the legal remedies available to investors holding units in these funds.

The legal nature of an investment fund

Under Article 52 of the Capital Markets Law (Sermaye Piyasası Kanunu) No. 6362 (SPKn), an investment fund is a pool of assets without legal personality, established by portfolio management companies to manage a portfolio on behalf of savers, on the basis of fiduciary ownership, using money and other assets collected from savers in exchange for fund units.

This definition has important implications for investors:

• The portfolio management company is obliged to represent and manage the fund in a manner that protects the rights of unitholders (SPKn Article 52/3).

• Portfolio management companies are obliged to safeguard the interests of the funds under their management and their unitholders when conducting their activities (SPKn Article 55/6).

• Where the Law, the relevant legislation and the fund rules contain no applicable provision, Articles 502–514 of the Turkish Code of Obligations (Türk Borçlar Kanunu), concerning contracts of mandate, apply by analogy to the relationship between the portfolio management company and unitholders (SPKn Article 52/4).

1. Monitoring the liquidation process

Payments during the liquidation process depend on the conversion of the assets in the fund's portfolio into cash and are made in proportion to unit holdings. At this stage, investors should:

• Retain account statements showing their unit holdings and transaction history, as well as instructions and transaction receipts,

• Obtain documents such as the fund's prospectus, investor information document and fund rules,

• Monitor SPK bulletins concerning the liquidation and announcements by the institution conducting it.

Receipt of a liquidation payment does not prevent an investor from claiming compensation for any additional loss suffered; however, determining the loss will often depend on the outcome of the liquidation.

2. Complaints to the SPK

Investors may complain to the SPK about transactions and practices they consider contrary to the legislation. A complaint is an administrative application; it may trigger the SPK's supervisory and sanctioning powers, but does not, on its own, secure compensation for an investor's individual loss.

3. Claims for compensation

Where a breach of legislation or contract has caused an investor to suffer loss, compensation may be sought from those responsible. The principal grounds of liability that may be considered are as follows:

• Liability of the portfolio management company: Breach of the obligation to manage the fund with due regard for the interests of unitholders.

• Liability of the portfolio custodian: Under SPKn Article 56/2, the institution providing portfolio custody services is liable for losses caused to unitholders by its failure to fulfil its obligations. The third paragraph of the same article expressly reserves unitholders' right to bring an action.

• Liability of the institution marketing/selling the fund: Matters such as whether the investor was adequately informed of the fund's risk level and whether its suitability for the investor's profile was assessed are examined in light of the circumstances of the individual case.

Judicial decisions show that whether an investment institution has fulfilled its duties to inform and supervise is assessed in detail on the basis of the case file (for example, Court of Cassation, 11th Civil Chamber, Case No. 2019/4445, Decision No. 2021/3866, dated 20.04.2021). It is therefore particularly important to collect all relevant documents, such as the contract, risk disclosure form, investor profile assessment and correspondence.

The court with subject-matter jurisdiction, whether applying to a mediator before bringing an action is compulsory (mandatory pre-litigation mediation), and the applicable limitation periods may vary according to the nature of the relationship between the parties. As missing these deadlines may result in a loss of rights, an early assessment is important.

4. Actions against administrative acts

Since SPK decisions constitute administrative acts, persons who consider themselves directly affected by these decisions may seek recourse before the administrative courts. Under the Administrative Judicial Procedure Law (İdari Yargılama Usulü Kanunu) No. 2577, the time limit for bringing an administrative action is generally sixty days, and the starting date is determined according to the circumstances of the individual case.

5. Criminal law aspects

The Capital Markets Law (Sermaye Piyasası Kanunu) provides for offences such as market manipulation (Article 107) and breach of trust and forgery (Article 110). For example, under Article 110/1-a, using capital market instruments, cash and other valuables entrusted to the fund board or an investment institution for one's own benefit or that of another constitutes aggravated breach of trust.

An important procedural rule applies to these offences: under SPKn Article 115, an investigation into offences defined in or referred to by the Law is subject to a written application by the Board to the chief public prosecutor's office, and this application is a procedural prerequisite for criminal proceedings. If a public prosecution is brought, the Board acquires the status of an intervening party. Nevertheless, investors retain their right to lodge a complaint directly in respect of offences under the Turkish Criminal Code (Türk Ceza Kanunu), such as fraud; monitoring the proceedings is important to enable a person harmed by an offence to exercise their rights during the investigation and prosecution.

Conclusion

During a fund liquidation, investors should first collect all their documents, monitor official announcements and observe deadlines that could result in a loss of rights if missed. The course to be followed will depend on how the investor's relationship with the fund was established, the information provided, the source of the loss and the progress of the process.

This article is intended for general information and is not a substitute for legal advice. You are advised to seek a lawyer's opinion for an assessment of your specific circumstances.