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New Era in Hedge Funds: All Eyes on the Public Disclosure Platform!

Berk Cin

Cenk Civan

The Communiqué on Principles on Investment Funds (III-52.1) ("Communiqué") is amended by Capital Market Board of Türkiye (“CMB”) through the Official Gazette dated March 1, 2024, regarding the issuance of participation shares of hedge funds ("Hedge Funds").

New Practices in Hedge Funds

  • Certain sections that must be included in funds’ prospectus are exempted for Hedge Funds. Accordingly, Hedge Funds’ prospectus must only include the following sections set forth in under Annex-2 of the Communiqué: the fund’s title, the fund’s type, the fund’s duration, the information of the founder, manager and portfolio custodian, and the expenditures that will be paid from the fund’s assets.

  • The exempted sections set forth in Annex-2 of the Communiqué, the fund’s benchmark or the principles for calculating thresholds, and the fund’s management fee must be published on the Public Disclosure Platform (“PDP”). If Hedge Funds intends to amend their investment strategy, benchmark or principles of calculating threshold, investment objective, investment limitations, fund’s risks, trading of participation shares and conditions for making capital commitments to fund, fund management fee and increasing in risk limits, such Hedge Funds must make a new announcement on the PDP at least 30 days prior to the effective date of the new amendment.

  • The investments to be made by Hedge Funds in accordance with their investment strategies and limits, without being subject to limitations regarding the portfolio and transaction set forth in the Communiqué, will be published on their PDP instead of Hedge Funds’ investor information documentation.

  • Prior to the amendment of the Communiqué, the information regarding the origin of foreign funds whose shares will be acquired by Hedge Funds must have been included in the Hedge Funds’ prospectus and investor information documentation. Now, this information will be published on the PDP, as part of the fund’s investment strategy.

  • The limits concerning the risks arising from futures and options contracts and swap contracts in the portfolios of Hedge Funds will be published on the PDP page rather than in the fund’s prospectus and investor information documentation. In addition, the obligation to notify the participation shares’ holders via the most appropriate communication means in case of exceeding the fund’s limits was abolished, and if the limit is exceeded, Hedge Funds must publish this information on the PDP.

  • Hedge Funds must publish amendments regarding the funds’ prospectus that could affect investors’ investment decisions and require the investors’ prior knowledge on the PDP at least 30 days prior to the effective date of the published amendments.

These amendments became effective as of March 1, 2024. Hedge Funds whose prospectuses were approved before March 1, 2024, however, are not required to comply with the new prospectus standards. Accordingly, those Hedge Funds will be able to make the necessary amendments without seeking the CMB's approval to align their prospectuses in accordance with the prospectuses standard. Additionally, these Hedge Funds must publish these amendments on their PDP and on the official website of the founder and must inform the CMB regarding the amendments to their prospectus.


In its press release dated March 1, 2024, the CMB explained the rationale behind these amendments as follows: (i) Hedge Funds’ participation shares can only be sold to qualified investors, and (ii) Hedge Funds can be managed without being subject to the concentration rules and risk limits set forth in the CMB’s regulations. Additionally, the CMB emphasizes that these amendments aim to simplify the application processes of Hedge Funds and to ensure that they are carried out more efficiently, as they differ from conventional funds whose participation shares are sold to retail investors. We believe that facilitating the incorporation and operation of Hedge Funds will help to increase the market's interest in Hedge Funds.


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