Open Index Funds in Turkey

The Capital Markets Board (CMB) in Turkey provides for the opening of various types of investment funds. Among the most popular ones are index funds which usually take the form of exchange traded funds and mutual funds. The Turkish index fund is also referred to as tracker fund because it follows certain investment indexes. The most common ones are the Dow Jones and the Standard and Poor’s 500 indexes.

Our company registration agents in Turkey can offer a detailed definition of the index fund.

Types of index funds in Turkey

The most common types of index investment funds in Turkey are the exchange traded funds and the mutual funds which are usually set up under the form of open-ended investment companies. Pension funds could also be considered index funds provided that they meet certain establishment and investment criteria.

In order to open an index fund in Turkey, one must know that the first step will be to register the investment company, which will usually take the form of a joint stock entity. In the case of exchange traded funds, the minimum amount accepted for the registration of the investment company is 2 million TRY and the sum must rise to 4 million TRY in the next 6 months following the opening of the fund.

Our Turkish company formation consultants can assist you with the company registration process.

Approval of Turkish index funds

Once the investment company is registered with the Turkish Trade Registrar, the index fund must apply for approval with the CMB before starting operating. In order to do that, the investors must file the following documents with the CMB:

• -          the certificate of incorporation of the company;
• -          the prospectus;
• -          the agreement with the custodian.

Index funds are considered more advantageous than other types of funds, because of the lower risks they imply and because the participants to the fund can make good returns on their investments. For the managers of the funds, the costs associated to operating Turkish index funds are lower than those of other types of funds.

For information on the laws related to setting up an index fund in Turkey, please feel free to contact us. You can also rely on our company registration representatives in Turkey can assist you in setting up various types of funds.