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Turkey tightens hedge fund rules to limit concentrated stock bets
The Capital Markets Board set issuer-level caps of 2% to 8% of free-floating shares for hedge funds, with compliance staggered through late 2026.
Turkey has tightened its hedge fund rules, aiming to curb suspected market manipulation tied to concentrated positions and unusually strong gains in some stocks and funds, according to reporting cited by Hedgeweek. The changes come as scrutiny of Turkey’s equity market intensifies and index providers raise additional concerns around free-float levels and market accessibility.
The Capital Markets Board amended fund guidelines to impose issuer-level limits based on a company’s free-float ratio. Under the new framework, hedge funds will be restricted to holding between 2% and 8% of an issuer’s free-floating shares, depending on the size of its freely traded stock.
The regulator also added limits tied to related-party exposure, restricting holdings in securities issued by affiliated companies under the management’s control. Such investments cannot exceed 20% of a fund’s portfolio, with an additional concentration cap for any single position that represents more than 5% of a fund’s assets, and a collective cap that likewise keeps these holdings to no more than 20% of the portfolio.
Funds with positions above the new thresholds have until the end of 2026 to comply. Excess holdings must be reduced by at least one-third by October 31, by two-thirds by November 30, and meet full compliance requirements by December 31, Hedgeweek reported. The new rules are also described as significant because earlier concentration restrictions applied to equity-heavy funds but did not cover hedge funds in the same way.