The public disclosure obligations relating to investment funds aim not only to ensure that investors are informed about a fund’s investment strategy, risks, expenses and the terms governing the purchase and sale of its units, but also to keep that information up to date throughout the fund’s operations. However, the public disclosure obligations relating to an investment fund must be distinguished from the notification and disclosure obligations of the portfolio management company that establishes the fund (the “PMC”) concerning its own ownership and operational structure.
This distinction has become particularly important following the amendments to investment fund regulations in 2026 and the decisions to restrict the transactions of certain funds and to liquidate them. Developments concerning various investment funds, including Tera Portföy Para Piyasası (TL) Fonu (TP2), Tera Portföy Hisse Senedi (TL) Fonu (Hisse Senedi Yoğun Fon) (THF), Pusula Portföy Para Piyasası (TL) Fonu, Pusula Portföy İkinci Para Piyasası (TL) Fonu and Pusula Portföy Para Piyasası Katılım (TL) Fonu, have brought obligations to inform investors accurately and promptly back into focus, alongside the portfolio composition and liquidity of these funds. The decisions set out in Bulletins No. 2026/60 and No. 2026/61 of the Capital Markets Board (the “Board” or “CMB”), dated 17 September 2026, introduced specific principles concerning restrictions on fund transactions, the status of pending redemption requests and the determination of investors’ rights during liquidation1. In addition, amendments made to the Guidelines on Investment Funds on 28 August 2026 introduced new public disclosure obligations for certain funds2.
This briefing examines separately the public disclosure regime applicable to investment funds and the obligations arising from PMCs’ own operational and ownership structures. It also addresses the impact of developments in portfolio composition and liquidity on public disclosure, information obligations during transaction restrictions and liquidation, and the civil liability that may arise from false, misleading or incomplete disclosures.
I. Scope of the public disclosure obligation and information documents
The scope of the public disclosure obligation for investment funds must first be determined under Capital Markets Law No. 6362 (the “CML”), Communiqué No. III-52.1 on Principles Regarding Investment Funds (the “Fund Communiqué”) and the relevant secondary legislation. For the PMC that establishes the fund, the obligations laid down in Communiqué No. III-55.1 on Portfolio Management Companies and the Principles Regarding Their Activities must also be taken into account. The applicability of Communiqué No. II-15.1 on Material Events must be assessed separately by reference to the legal status of the person required to make the disclosure and the nature of the information to be disclosed.
The Fund Communiqué designates the umbrella fund rules, the fund prospectus and the key investor information document as “information documents”. Although these documents perform different legal functions, they complement one another in enabling investors to obtain information about the fund’s principal features and investment terms. Financial reports, portfolio distribution reports and other disclosures required by law to be made on the Public Disclosure Platform (“KAP”) are subject to different legal bases and disclosure procedures. Accordingly, when assessing whether a public disclosure obligation has been breached, it is first necessary to identify the document or disclosure in which the information alleged to require disclosure should have appeared.
The fund prospectus is one of the principal public disclosure documents containing information that enables investors to make an informed assessment of the fund’s characteristics and the associated rights and risks. The Board’s approval of a prospectus does not, however, mean that the Board guarantees the accuracy of its contents or the value of the investment.
The key investor information document is intended to enable investors to assess the fund’s structure, investment strategy, risk and return profile, expenses and the terms governing the purchase and sale of its units. The founder is responsible for ensuring that this document is consistent with the prospectus and the fund rules, that its contents are accurate and that it is kept up to date. It is therefore insufficient for the document merely to reflect the information available when the fund was established. Changes requiring an update under the applicable legislation must be reflected in the document.
For the purposes of the public disclosure obligation, the mere fact that a disclosure has been made is not sufficient. The disclosure must enable investors to assess the matter concerned. General and abstract statements of risk cannot replace disclosure of specific risks arising from the fund’s investment strategy or portfolio composition that are material to an investment decision. Similarly, inconsistent statements on the same matter in different public disclosure documents must be assessed separately in determining the adequacy of the information provided.
II. Disclosure of portfolio composition, investment strategy and liquidity
The actual management of a fund’s portfolio must be consistent with the investment strategy disclosed to investors. This consistency cannot, however, be assessed solely by considering whether the assets held in the portfolio fall within the investment instruments specified in the prospectus. Where material to the fund’s disclosed strategy and risk profile, consideration must also be given to issuer or sector concentration, the liquidity of the markets on which the assets are traded, obligations arising from borrowing and derivative transactions, and the sufficiency of liquid assets to meet unit redemption requests.
Nevertheless, not every transaction carried out within a fund’s portfolio automatically requires an amendment to the prospectus or a separate KAP disclosure. For public disclosure purposes, the decisive questions are whether the portfolio change affects the investment strategy, risk-return profile or other essential information disclosed to investors to such an extent that it becomes outdated, and whether the applicable regulation imposes a specific disclosure obligation in that situation.
Compliance of a portfolio transaction with the legislation or fund documents must therefore be distinguished from compliance with the public disclosure obligation. Investment in an instrument not permitted by the fund’s prospectus primarily raises a legal issue as to whether portfolio management complies with the fund documents and investment restrictions and, consequently, whether the fund is managed in a manner that safeguards unitholders’ rights. Conversely, even where investments remain within the instruments specified in the prospectus, it must be examined separately for public disclosure purposes whether the actual portfolio composition renders the risk disclosures in the documents unrepresentative of the facts.
For example, where over-the-counter reverse repo transactions are included in the fund portfolio but are not mentioned in the prospectus, or where the prospectus disclosures do not accurately reflect the nature of the transaction, counterparty risk, pricing and valuation principles, the prospectus may be found inconsistent with the fund’s actual investment activities. Similarly, even if the prospectus permits reverse repo transactions, it may be argued that the investment strategy and risk disclosures presented to investors are incomplete or misleading where those transactions are not conducted on objective and fair pricing terms or cannot be valued at fair value using a reliable and verifiable method. In such a case, the legal issue lies not only in the transaction’s compliance with legislation, but also in the prospectus’s failure to reflect the fund’s actual investment composition and associated risks accurately and adequately.
A similar distinction must be drawn in relation to liquidity risk. A high total fund value does not demonstrate that portfolio assets can be converted into cash promptly and without a significant loss of value. Particularly where assets with limited market depth are concentrated in the portfolio, substantial redemption requests may require the fund to realise its assets at prices differing from those prevailing under ordinary market conditions. This may affect the fund’s capacity to meet its unit redemption obligations.
Concentration of portfolio assets must also be distinguished from concentration of fund units in the hands of particular investors. Portfolio concentration may increase the sensitivity of the fund’s value to price movements in particular assets or issuers. Concentration of unit ownership, on the other hand, may increase the impact on the fund’s liquidity needs of a redemption request from an investor holding a large proportion of units. The version of the Guidelines on Investment Funds incorporating the amendments of 28 August 2026 contains specific provisions on public disclosure by unrestricted funds and on disclosures required when certain unit ownership thresholds are reached in funds traded on the Turkish Electronic Fund Trading Platform (“TEFAS”)3.
Accordingly, the public disclosure implications of a development in portfolio composition must be determined by considering together the type of fund, its investment strategy, the contents of the information documents in force and the disclosure obligations imposed by the relevant regulation.
III. Disclosure of developments concerning the portfolio management company
A fund’s public disclosure obligation and the notification and disclosure obligations of its founding PMC concerning its own legal entity are not subject to the same legal regime. A disclosure concerning the PMC does not replace the obligation to update the fund’s information documents; nor does a fund-level disclosure discharge the PMC’s obligations arising from its own operational and ownership structure.
This distinction is particularly important in negotiations for a share transfer or strategic partnership involving a change in the PMC’s ownership structure. The commencement of share transfer negotiations, agreement by the parties on certain terms, execution of a binding contract, receipt of the necessary Board approval and completion of the share transfer are distinct legal stages. The disclosure or notification obligation at each stage must be determined by reference to its own legal basis.
It is therefore inappropriate to classify negotiations concerning a transfer of shares in a PMC as “inside information” under Communiqué No. II-15.1 on Material Events solely on the basis of the company’s status as a PMC. The first question is whether that Communiqué applies to the PMC concerned. Where the material event disclosure regime is applicable, the sufficiently precise nature of the information to be disclosed, its potential impact on investment decisions and the conditions for delaying disclosure must be assessed separately4.
In transactions involving several stages, each stage must be assessed in its own circumstances. Presenting negotiations whose substance and likelihood of completion are not yet sufficiently clear as a concluded transaction may mislead investors. Equally, failure to disclose a development that has become sufficiently concrete to affect an investment decision may have legal consequences under the applicable regulations5.
Nor should a change in the PMC’s ownership or management structure be assumed to confer a direct right to payment or a guarantee on fund investors. A change in the PMC’s ownership structure is separate from the assets of the funds it manages. Accordingly, a disclosure concerning a share transfer or the admission of a new shareholder should not be interpreted as meaning that the fund’s liquidity problem has been resolved, that a liquidation shortfall has been covered or that investors’ redemption proceeds have been guaranteed. The contents of disclosures should be sufficiently clear and comprehensive to avoid creating such an impression among investors.
IV. Public disclosure during transaction restrictions and liquidation
Where restrictions are imposed on fund transactions or a decision is made to liquidate a fund, the subject matter of public disclosure differs from that during the fund’s ordinary operations. At this stage, the central issues for investors are the legal status of their existing units and redemption instructions already submitted, and the basis on which payments will be made.
Board Bulletin No. 2026/61 of 17 September 2026 lays down liquidation procedures and principles for certain funds. The decision provides for reconciliation of entitlements and orders, realisation of fund assets, payments to investors, and the recording as liabilities in the fund’s accounts of amounts arising from certain unexecuted TEFAS redemption instructions, to be satisfied with priority from the cash realised6.
This arrangement does not mean that all investors are in the same legal position. In assessing an investor’s entitlement, the timing and execution status of the redemption instruction and the number of units covered by it must be taken into account. A claim arising from an unexecuted redemption instruction that satisfies the conditions set out in the Board’s decision does not have the same legal character as units still held by an investor that will participate in the liquidation balance.
Disclosures to investors during liquidation must also reflect this distinction. They must not create a misleading impression of the stage reached in the liquidation, the entitlements on which periodic payments are based, or the status of the investor’s remaining units. The amount ultimately realised on liquidation must also be distinguished from the fund’s previously calculated total value or unit value.
Bulletin No. 2026/61 provides that the Board may extend the maximum period prescribed for liquidation. That period does not constitute a guarantee that the investor’s entire original investment will be repaid by a particular date. Nor does it follow that all investors will be paid only at the end of that period and in a single payment. Amounts realised from the conversion of fund assets into cash during liquidation are distributed to investors in accordance with the principles set out in the Board’s decision.
Accordingly, assessment of the public disclosure obligation during transaction restrictions and liquidation must focus on information directly affecting investors’ entitlements and payment terms, rather than on general statements.
V. Civil liability arising from false, misleading or incomplete disclosures
Civil liability for breach of the public disclosure obligation is not governed by a single regime for all disclosures. It is first necessary to identify the document or disclosure containing the information alleged to be false, misleading or incomplete. The persons liable and the extent of liability in relation to a prospectus, key investor information document, financial report or other public disclosure document may be assessed under different provisions.
Article 10 of the CML establishes a specific liability regime for losses arising from false, misleading or incomplete information in a prospectus. That article primarily provides for the issuer’s liability. Where compensation cannot be recovered from the issuer, or it is clear that it cannot be recovered, the other persons listed in the article may be liable to the extent warranted by their fault and the circumstances7. It should therefore not be assumed that all persons and entities concerned are liable on the same legal basis and to the same extent for a loss associated with a prospectus.
Article 32 of the CML contains specific provisions governing other public disclosure documents. Where documents falling within its scope contain false, misleading or incomplete information, liability may arise for the signatories and for legal entities on whose behalf the documents were signed. The obligations under Article 14 of the CML must also be taken into account in relation to financial statements and reports8.
Liability cannot be determined solely by examining the signature on a document. The type of public disclosure document, the person or entity responsible for preparing and publishing it, and the nature of the alleged breach giving rise to the loss must be considered together. The liability of the founder, portfolio manager, distributor or portfolio custodian must likewise be determined by reference to each entity’s own duties and obligations.
The mere involvement of an entity with a fund does not give rise to liability for every loss suffered by the fund or alleged by investors. A founder’s failure to keep fund documents up to date, a portfolio manager’s transactions in breach of investment restrictions and a portfolio custodian’s breach of its own oversight obligations constitute different grounds of liability. Where several breaches contribute to the same loss, the impact of each act or omission on that loss must be examined separately.
The liability of entities subsequently appointed for liquidation purposes must also be assessed within this framework. The appointment of a bank to conduct the liquidation does not mean that it assumes liability for all transactions and breaches during the fund’s previous operations. Any liability arising from that entity’s breach of its own obligations in carrying out its liquidation duties is, however, assessed separately.
VI. Determination of loss and causation
For liability in damages arising from false, misleading or incomplete public disclosures, identifying the defect in the disclosure is not sufficient. The investor’s loss and the causal link between that loss and the defect must also be established.
The date on which the investor made the investment decision and the information on which it was based are material to this assessment. The claims available to an investor who purchased units after a false or incomplete disclosure may not rest on the same legal basis as those of an investor who submitted a redemption order before that disclosure. Accordingly, even where a breach of the public disclosure obligation is established, not all investor losses can be attributed to the same disclosure.
Article 32(4) of the CML provides that, where certain transactional and timing conditions are met, a causal link between the defect in the public disclosure document and the investor’s loss is deemed established9. This presumption does not, however, remove the need to establish separately the existence and amount of the loss.
In calculating loss, losses resulting from the fund’s ordinary investment risk or general market conditions must be distinguished from loss attributable to false or incomplete information. A decline in the value of portfolio assets does not, in itself, establish that a loss has arisen from a breach of the public disclosure obligation.
The connection between the impact of false, misleading or incomplete information in a public disclosure document on the investment decision and the financial loss alleged by the investor must be established by reference to the circumstances of the particular case. Even where the presumption in Article 32(4) of the CML does not apply, causation may be established under other legal grounds and the general rules of evidence.
VII. Limitation periods
Article 32(6) of the CML provides for a special limitation period for claims for damages arising from public disclosure documents. Accordingly, a limitation period of 6 (six) months applies from the date on which the loss within the scope of Article 32(4) occurs10.
This special period should not be assumed to apply to all investor claims. Claims based on non-payment of unit redemption proceeds, breach of contractual obligations, an independent breach of duty relating to fund management or another legal ground may be subject to different limitation provisions.
The applicable limitation period must therefore be determined by reference to the underlying facts and legal relationship, rather than the label attached to the claim. Where a breach of the public disclosure obligation and a separate breach of another obligation are alleged in connection with the same event, the limitation period applicable to each claim must be assessed separately11.
Nor does the fact that the fund’s liquidation is continuing, or that an investor has not yet disposed of their units, mean that the limitation period under Article 32(6) of the CML will not begin to run for any of the claims. The commencement of the period must be determined by reference to the legal basis of the claim and the date on which the loss occurred.
VIII. Conclusion
Assessing the public disclosure obligation in investment funds is not merely a matter of determining whether information has been provided to investors. It is first necessary to identify the legal regulation governing the information alleged to require disclosure. It must then be determined through which document or platform the disclosure must be made, who is required to make it and when it must be made.
The fund’s information documents and disclosures concerning its activities must therefore be distinguished from the founding PMC’s obligations concerning its own ownership and operational structure. A disclosure about the PMC does not mean that the fund’s own public disclosure obligations have been fulfilled, just as keeping the fund’s information documents up to date does not discharge the PMC’s own notification obligations.
Similarly, compliance of portfolio management with the fund’s investment strategy or the legislation, and the accuracy and adequacy of disclosures made to investors, are separate legal issues. Although the same event may result in a breach of both obligations, their legal bases and liability consequences must be determined separately.
It is particularly important during periods of liquidity difficulties, transaction restrictions or liquidation that information on the status of investors’ redemption rights and payment terms is clear and up to date. However, the commencement of liquidation or a decline in fund value does not, in itself, demonstrate a breach of earlier public disclosure obligations. The legal assessment must consider together the fund’s information documents, KAP disclosures, portfolio composition, investor orders, relevant Board decisions and the timing of disclosures.
As regards liability arising from false, misleading or incomplete information, it is necessary to establish specifically which disclosure was unlawful, against which person or entity liability should be asserted, the investor’s loss and the causal link. This approach distinguishes a breach of the public disclosure obligation from a general assessment of investment losses and enables the legal basis of liability to be correctly identified.
For further information and assistance, please contact us at info@mapartners.com.tr.
Alican Tokmak
Partner
M&A Partners
Law and Consultancy
Legal Notice
This briefing has been prepared solely for general legal information purposes and does not constitute a legal opinion, legal advice, investment advisory services, investment advice or guidance concerning any person, institution, company, fund or specific dispute. The statements and assessments contained herein must not be interpreted as a conclusion that any particular transaction is lawful or unlawful, that any person or entity is liable, or that a particular investor has a right to compensation or any other claim.
Legal assessments concerning capital market transactions and investment funds must be made by examining together the circumstances of the particular case, the relevant fund and company documents, public disclosures, investor transaction and order records, contracts, portfolio and valuation data, applicable legislation and decisions of the competent authorities.
The statements in this briefing do not constitute a recommendation or advice to buy, sell or hold any capital market instrument and must not be used as a basis for investment decisions. As legislation and administrative practice may change over time, separate legal and, where necessary, financial advice under the current regulations is recommended for any specific transaction or dispute.
- Capital Markets Board; Bulletin No. 2026/60 and Bulletin No. 2026/61, dated 17 September 2026. ↩
- Capital Markets Board, Guidelines on Investment Funds, version incorporating the amendments of 28 August 2026, sections 9.5 and 9.8. ↩
- Capital Markets Board, Guidelines on Investment Funds, version incorporating the amendments of 28 August 2026, sections 9.5 and 9.8. ↩
- Capital Markets Board, Guidelines on Material Events, sections 2.1 and 2.4; Gürler, Esma Hazal; Hukuki Açıdan Sermaye Piyasasında Özel Durum Açıklamaları, Master’s thesis, Ankara University, 2023, pp. 74–76; Capital Markets Board, Communiqué No. II-15.1 on Material Events, Articles 5–6; Guidelines on Material Events, section 2.1. ↩
- Ibid., pp. 74–76. ↩
- Capital Markets Board, Bulletin No. 2026/61, 17 September 2026. ↩
- Capital Markets Law No. 6362, Official Gazette: 30 December 2012, No. 28513, Article 10. ↩
- Capital Markets Law No. 6362, Articles 14 and 32; Gözüyeşil, Fevzi Fırat; Sermaye Piyasası Hukukunda İzahnameden Doğan Sorumluluk, doctoral thesis, Ankara Hacı Bayram Veli University, 2019, pp. 171–173; Aydoğan, Gökhan; Anonim Şirketlerde Kamuyu Aydınlatma Belgelerinden Doğan Hukuki Sorumluluk, doctoral thesis, Ankara University, 2020, p. 439. ↩
- Capital Markets Law No. 6362, Article 32(4)–(5); Akyürek, Koray; Kurumsal Yönetim İlkeleri Işığında Halka Açık Anonim Şirketlerin Kamuyu Aydınlatma Yükümlülüğü ve Kamuyu Aydınlatma Platformu (KAP), Master’s thesis, Yeditepe University, 2020, pp. 100–105. ↩
- Capital Markets Law No. 6362, Article 32(6); Aydoğan, pp. 477–479. ↩
- On this not affecting investors’ claims and rights arising under the general provisions, see: Aydoğan, p. 479. ↩