Capital Markets Board of Türkiye clarifies proposed liquidation treatment of unsettled fund redemption orders

The Capital Markets Board of Türkiye has clarified that a bill under consideration in Parliament would bring fund redemption orders whose settlement remains incomplete into the liquidation process, without affecting completed transactions. Investors with such orders would receive payments based on liquidation proceeds on equal terms with other unit holders. The clarification addresses uncertainty over settlement finality and unit blocking in the ongoing fund liquidations, following earlier explanations of how canceled and unexecuted orders would be treated. Article 79 of the Capital Markets Law prevents the revocation or cancellation of settlement instructions, settlement transactions and payments even when the relevant institutions suspend operations or enter liquidation. However, this does not mean that every order submitted through the Turkish Electronic Fund Trading Platform (TEFAS) constitutes a completed settlement regardless of its processing stage. TEFAS enables investors to buy units from, and redeem them with, the fund founder. A redemption order or system record alone does not establish that settlement has begun, including for investors with units in a unit blocking subaccount (PBLK). Settlement is completed when cash is credited to the investor’s account and the unit ownership record is removed. Investors with blocked units are already included among the 455,758 affected fund unit holders, rather than constituting an additional group. Under the bill, orders awaiting completed settlement would be included in liquidation to support equal treatment in the distribution of fund assets.