Treasury and Finance Minister Mehmet Şimşek said Thursday authorities had moved quickly to contain problems in the investment fund market and prevent them from developing into a systemic crisis, adding that further regulatory measures would be needed.
Speaking online at an S&P Global conference, Şimşek said authorities had "quarantined" troubled portfolio management companies and related funds and had begun the liquidation and resolution process.
The problem in the fund market has been prevented from turning into a systemic crisis, he said, according to a Turkish transcript of his remarks reported by Anadolu Agency (AA). But he noted additional regulations would be needed.
The fund turmoil erupted earlier this month after suspected price manipulation in a number of thinly traded stocks triggered heavy losses and redemption pressures at investment funds.
Almost half a million investors hold stakes in more than 100 Turkish investment funds with combined assets of $20 billion that authorities ordered to be liquidated this month.
Şimşek said the aim was to stop contagion from spreading to the rest of the system, stressing that authorities "have largely succeeded."
He acknowledged what he said was a "limited" impact, but said "we are not talking about a systemic problem. We will continue to deepen capital markets."
Türkiye on Tuesday established a fund coordination council chaired by the vice president to oversee the rapid liquidation of the funds. The State Supervisory Council (DDK) has also been tasked with examining the crisis.
The coordination board is due to meet Friday.
Earlier Thursday, Şimşek said authorities were taking steps to ensure investors in troubled funds receive payments as quickly as possible.
The remarks came after the Capital Markets Board (SPK) said it would begin making interim payments to investors in the funds that were ordered to shut down.
Investors in asset managers Tera Portföy, Pusula Portföy, Atlas Portföy and Hedef Portföy will receive their full net investment amount if it is below TL 1 million ($20,404). Investors whose net investment amount is TL 1 million or above will receive TL 1 million as an interim payment.
The procedure will start with money market funds, the SPK said.
In a separate statement, the SPK said the Savings Deposit Insurance Fund (TMSF) opened up "voluntary refund accounts" for those who want to voluntarily return "excessive gains" made as a result of fund sales carried out before liquidation of the funds.
Under Turkish legislation, financial manipulation offenses can be pardoned, or sentences can be reduced if a person "shows remorse" by paying to the Treasury twice the amount of the benefit they obtained.
Speaking separately on Thursday, President Recep Tayyip Erdoğan said developments in the fund market would not pose a threat to the economy.
"We are successfully overcoming the problem that emerged in a certain part of the fund market," Erdoğan said. "Within the framework of capital market rules, we are resolving this matter quickly, with fairness and justice in mind and without allowing anyone's rights to be taken away."
He said authorities would not allow the issue to become a threat to Türkiye's economic security or social stability.
Authorities are investigating the asset managers for alleged stock manipulation and have arrested 61 people, including top financial executives, as of Thursday.
