403
Sorry!!
Error! We're sorry, but the page you were looking for doesn't exist.
Türkiye Rejects Bailout for Failed Fund Investors
(MENAFN) Türkiye will not tap public money to cover private losses at investment funds now being wound down, Vice President Cevdet Yilmaz said Wednesday, laying out a plan to repay investors from fund assets and recovered proceeds.
Briefing the parliament on the Fund Coordination Board, which he chairs, Yilmaz said the 131 funds in liquidation make up 4.6% of all funds and 7.7% of their combined portfolio value.
“In other words, the problem has occurred in a limited segment of the fund market,” he said.
As of Oct. 5, the portfolio value of those funds equaled 2.4% of household financial assets. Yilmaz said the financial system faces no systemic risk, adding that the narrow scope of the problem does not make it any less serious.
Small investors first
Under the general legal principle governing liquidation, available resources are distributed in proportion to investors’ holdings, Yilmaz said.
For funds in extraordinary liquidation, interim principal repayments of up to 1 million Turkish liras ($20,326) are planned, with small investors and money market funds given priority.
Existing fund assets will be used first. They will be supplemented by money recovered from those who made excessive or unjust gains, along with proceeds from sales of assets removed from the system.
“Treasury resources will not be used for private losses arising during this process,” he said, adding that investment funds, particularly high-risk hedge funds, do not carry the state guarantee that applies within the banking system.
Probes and safeguards
Judicial and administrative authorities are investigating, and those responsible for unlawful gains through speculation and manipulation will be held accountable, Yilmaz said.
The State Supervisory Council has assigned 10 inspectors to examine the responsibilities of the relevant institutions and independent regulators. Authorities are also weighing administrative and legal steps to head off similar problems, he added.
The coordination board has drawn up a roadmap, with each institution acting within its mandate. Yilmaz promised a transparent, fair and swift liquidation and reaffirmed Türkiye’s commitment to expanding and deepening its capital markets.
Briefing the parliament on the Fund Coordination Board, which he chairs, Yilmaz said the 131 funds in liquidation make up 4.6% of all funds and 7.7% of their combined portfolio value.
“In other words, the problem has occurred in a limited segment of the fund market,” he said.
As of Oct. 5, the portfolio value of those funds equaled 2.4% of household financial assets. Yilmaz said the financial system faces no systemic risk, adding that the narrow scope of the problem does not make it any less serious.
Small investors first
Under the general legal principle governing liquidation, available resources are distributed in proportion to investors’ holdings, Yilmaz said.
For funds in extraordinary liquidation, interim principal repayments of up to 1 million Turkish liras ($20,326) are planned, with small investors and money market funds given priority.
Existing fund assets will be used first. They will be supplemented by money recovered from those who made excessive or unjust gains, along with proceeds from sales of assets removed from the system.
“Treasury resources will not be used for private losses arising during this process,” he said, adding that investment funds, particularly high-risk hedge funds, do not carry the state guarantee that applies within the banking system.
Probes and safeguards
Judicial and administrative authorities are investigating, and those responsible for unlawful gains through speculation and manipulation will be held accountable, Yilmaz said.
The State Supervisory Council has assigned 10 inspectors to examine the responsibilities of the relevant institutions and independent regulators. Authorities are also weighing administrative and legal steps to head off similar problems, he added.
The coordination board has drawn up a roadmap, with each institution acting within its mandate. Yilmaz promised a transparent, fair and swift liquidation and reaffirmed Türkiye’s commitment to expanding and deepening its capital markets.
Legal Disclaimer:
MENAFN provides the
information “as is” without warranty of any kind. We do not accept any
responsibility or liability for the accuracy, content, images, videos,
licenses, completeness, legality, or reliability of the information
contained in this article. If you have any complaints or copyright issues
related to this article, kindly contact the provider above.
Comments
No comment