SPK's Fund Guide Overhaul: Tough New Levers Against Concentration and Manipulation

The Capital Markets Board (SPK) has unveiled a groundbreaking overhaul of its investment fund guide, establishing a new framework to safeguard market depth and curb excessive fund concentration.

A Bold Regulatory Shift: Redefining Market Dynamics

■A 30% cap on the aggregate exposure of funds to any single asset class will be subject to tighter scrutiny.

■5 new risk metrics added: liquidity, volatility, governance, transparency, and market impact.

■Asset managers are limited to a 10% maximum holding in any single fund, tightening concentration limits.

Sharp Boundaries on Portfolio and Management Limits

■Positions exceeding 25% of a fund’s assets will trigger automatic reporting within a 4‑week monitoring window.

■Upon detection of over‑concentration, fund managers must implement corrective actions within 30 business days.

■The revision imposes uniform standards across 10 fund types (e.g., ETFs, leveraged funds), reinforcing the principle of parity.

Anticipated Effects on Liquidity and Manipulation Risks

■Preserving market depth could lift BIST liquidity indicators by 2‑3%.

■Reducing manipulation risk may compress profit margins for short‑term high‑frequency trading strategies.

■Investor confidence is projected to rise by 5‑7% as a more transparent fund structure takes hold.

Market participants concur that the regulation may raise short‑term transaction costs but will ultimately strengthen market stability and investor trust. HFT algorithms will need to adapt to the new liquidity caps and reporting obligations, likely inducing a modest uptick in volatility during the transition. This is a necessary trade‑off for achieving the regulatory objective of market integrity. Seda Çetin, Market Pricing and Data Terminal Manager