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Open a Protected Investment Fund in Turkey

Updated on Wednesday 12th October 2016

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Open-a-protected-investment-fund-in-TurkeyTurkey has very strict, yet advantageous regulations about the establishment of investment funds. The main authority approving and supervising investment funds in Turkey is the Capital Markets Board (CMB) which allows the setting up of various types of investment funds, among which two with enhanced protection for the investors: the protected and the guaranteed investment funds.

Our company incorporation agents in Turkey can offer information about all the types of investment funds that can be set up in this country.

What is a Turkish protected fund?

According to the Capital Markets Act which was issued in 1981, protected funds are mutual funds which guarantee the initial investments of the participants as well as the capital gains arisen from the investment. As a mutual investment fund, the Turkish protected fund will pool money from various participants (investors) who in return will be given certificates for a variety of financial instruments which are traded on the Stock Exchange.

Turkish protected investment funds must be set up under the form of open-ended investment companies. These companies must have their internal regulations which will be submitted for approval with the CMB.

Restrictions for protected investment funds in Turkey

In order to protect investors, the Turkish protected investment fund is subject to several restrictions imposed by the CMB. Among these are:

  • -          to maintain the lowest price when buying assets and the highest when selling them;
  • -          not to purchase non-listed securities;
  • -          not to buy in more than 10% of an issuer’s assets;
  • -          not to buy more than 9% of the voting shares of a single issuer.

A Turkish protected fund may not invest in the assets of its management company. Also, the management company may not own shares in the protected investment fund.

Establishing protected investment funds in Turkey

In order to set up a protected investment fund in Turkey, the founders must register the investment company with the Companies Register and then file the prospectus, also known as the internal regulations of the fund, with the CMB. The Turkish fund must also appoint the management company which will administer the fund and the depositary which will keep its assets in custody.

For assistance in setting up a protected investment fund, please contact our Turkish company formation consultants.

 

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