"Hedge funds" are among the foreign institutions investing in Turkey, and with the amendments made in the "Communiqué on Principles Regarding Mutual Funds" of the Board Serial: VII, No: 10 to enable the establishment of such funds in Turkey,
In the EU accession process, the fund's quality and diversity of the service industry,
Expansion of the investor base parallel to the increase in the quality of services and the emergence of investment instruments suitable for investors' risk return expectations,
He was swamped.
The basic arrangements for the mentioned mutual funds called "Hedge Funds", which have the possibility to freely determine the investment strategy and limits in their bylaws and which can only be sold to qualified investors, are as follows:
Use of the name "Hedge Funds" as a counterpart to the "Hedge Fund" These funds are defined as mutual funds established for the sale of qualified investors only.
Hedge Funds have been preferred to be sold only to qualified investors and there has been no limitation on the minimum investment amount or maximum number of investors for fund investors.
According to the Communiqué,
Domestic and foreign mutual funds,
Portfolio management companies,
Mortgage funding agencies,
Retirement and aid funds,
Funds established pursuant to provisional Article 20 of the Social Insurance Law No. 506,
Useful associations to the public
Other investors to be determined by the Board, whose qualities are similar to these institutions
Funds are real persons and legal entities holding a Turkish and / or foreign currency and capital market instrument amounting to at least 1 million TL as of the public offering date of their participation shares.
Unlike other mutual funds, free mutual funds implement investment strategies aimed at providing absolute returns, without using any benchmarking criteria and independent of market introduction, and accordingly use various investment instruments, mainly derivatives.
For this reason,
Free Mutual Funds are exempted from the by-law limits applicable to other mutual funds,
It is foreseen that the investment strategy and limits will be freely determined within the fund's internal rules.
More sophisticated portfolio management techniques such as open selling, credit securities, leverage and derivative use are allowed to be used within the framework of the strategies and limits to be included in the bylaws.
There is no difference between the mutual funds in terms of the assets that can be acquired in the mutual fund portfolio except for the swap contracts and the off-the-shelf option contracts.
Nevertheless, free-standing mutual funds, unlike securities mutual funds, may conduct open sales and creditable securities transactions.
It is also possible that the amount of open position to be exposed due to derivative instruments, the total amount of open positions and the limits of borrowing may be determined in the bylaws of the Fund without being subject to the restrictions set forth in the Communiqué.
The management of the portfolio of the Private Mutual Funds, whose shares are restricted to qualified investors only, shall be managed by at least one of the directors of the managing company and the members of the fund board,
In addition, all of the portfolio managers should have the necessary knowledge and experience in the capital market activities and the license documents of derivative instruments,
It is also obligatory for the founder and the managing company to establish an internal control system that includes risk management systems for managing these funds.
The risk management system should include the development of a risk measurement mechanism that will enable identification of key risks that the fund may encounter, periodic review of risk definitions and updating in parallel with major developments, and comparison of the various dimensions of the risky total portfolio and specific instruments for consistent assessment of exposed risks .
Applications for the registration of funds and fund shares are concluded separately by the Board.Organization Types
By allowing hedge funds to freely determine investment restrictions in the internal rules,
As a high-risk mutual fund consisting of a single portfolio or
Portfolio can be established as a fund basket composed of hedge funds
If the value of the participation shares of the hedge funds included in the fund basket exceed 10% of the total value of the funds, these fund baskets are subject to the provisions determined for the hedge funds in the Communiqué. Such qualifying fund baskets are not subject to general investment restrictions for fund baskets in the CommuniquéApplication for Registration of Fund Shares
Before the application for registration of the mutual funds,
The funder needs to be allocated by the Founder in the amount specified in the internal regulation, the fund portfolio must be established and the portfolio should be managed within the framework of the strategies specified in the Rules of Procedure.
The risk measurement program needs to have backtesting of past retrospective portfolio management period.
It is possible to develop the market risk measurement program in-house or to purchase it from the outside.
The portfolios of hedge funds are valued according to the principles stated in the Communiqué and the share price is calculated. In the Communiqué, valuation principles of capital market instruments, especially valuation non-exchange derivative instruments and swap contracts, for which valuation principles are not included, are determined by the decision of the fund board.
The share prices of free mutual funds must be calculated at least once a month and reported to fund investors. In the bylaws of these funds, the share prices may be determined to be different and longer than the announcement period of the share prices for the participation fees. For example, while it is possible to purchase fund shares at monthly periods, fund shares may only be available at intervals of 3 months.
A limit has not been set in the legislation for the purchase and sale of participation shares of hedge funds. However, it is possible to determine the minimum fund share purchase number in the fund bylaws.
However, if the total amount of the fund's total sales order amount to which the shareholders have subscribed has exceeded a certain percentage of the total value of the introductory provisions, the coverage rate of the relevant instructions can be differentiated. In other words, it is possible to partially meet the order, depending on the decision of the builder / manager to return the fund shares to the fund.
It is foreseen that the institutions that can be intermediated in the sale of the participation shares of the mutual funds are to employ sales personnel with sufficient knowledge and experience in this regard and that the sale of funds will be realized by these sales personnel.
In addition, the authorities authorized to purchase and sell the shares of these funds are obliged to provide and keep regularly the information and documents that they have the qualified investor qualifications determined in the draft Communiqué.
They can not advertise and advertise public offerings and sales of hedge funds. However, promotional activities aimed at qualified investors may be conducted provided that they are not included in the scope of the public offering.
Inheritance and explanatory standards have not been established for the Private Mutual Funds, specific to other mutual funds. Rather, it has been adopted that hedge funds should be included in portfolio and risk limits in their bylaws. The regulations and explanations of the hedge fund and the related amendments are announced in the Turkish Trade Registry Gazette.
Free Mutual Funds are allowed to make a price announcement once a month by exemption from the obligation to calculate the daily fund price.
Unlike other mutual funds, the Mutual Funds are exempted from the independent audit obligation for interim financial statements.
Hedge Funds prepare monthly reports as they are in other funds. The monthly reports are prepared to include the movements of securities and participation shares within the month and information on fund performance. Monthly report copies to be submitted to the investor for details of the relevant month's trading details may not be included. In addition, it is mandatory to include information on the borrowing, receiving, futures, forward, option buying transactions and correlation coefficients calculated for the index funds in the last one and three month periods in the monthly reports. Monthly reports are announced at KAP. These reports are also available for investors' review at the founder's headquarters and where the participation shares are sold.
Hedge funds are notified by registered mail to registered shareholders if they are exposed to market risks and the methods to be used in calculating the counterparty risk and limits related to the risks they will be exposed to due to derivative instruments in their portfolios.
In practice, free-standing mutual funds prepare a web-based continuous information form accessible to investors by means of a password and provide periodic reports, intellectual-rights and other fund documents in this form.
In other types of mutual funds performance-based remuneration is compulsory to be based on benchmarking and performance benchmarking is not possible where benchmarking can not be determined in accordance with the principles in the Communiqué.
In hedge funds, performance-based compensation can be made without the benchmark provided that detailed information on the subject is provided in the bylaws of the fund. Free mutual funds are exemptions for the performance-based wage calculation granted to the management of portfolios of qualified investors. In this context, the comparison criterion fund based on performance pricing may differ from the actual portfolio component. For example, if you have a share of shares and VOB transactions
The property of an investment fund can not be used for any purpose other than to fulfill its obligations arising from the builder's Code, the Communiqué, and the fund's internal rules, and to fulfill its responsibilities. Fund property can not be pledged, collateral can not be displayed and can not be seized by third parties.
It is not responsible for liabilities arising from the actions of the founders and / or portfolio managers in their accounts, except for transactions carried out by the mutual fund founders and / or portfolio managers in this framework directly and / or as a proxy to the fund account. However, to be in the fund account and provided that there is a provision in the Internal Ordinance, the funds used by the fund and the financial futures contracts that are party and the assets belonging to the fictitious transactions carried out in the name of the fund can be shown as collateral.