Turkey Raised the Qualified Investor Threshold Fivefold After Fund Collapse

The Capital Markets Board of Turkey (SPK) has increased the threshold for qualified investors fivefold, from 10 million to 50 million lira (approximately $1 million) in financial assets. The required transaction volume has risen from 5 million to 25 million lira, according to a statement from the regulator on Monday. Investors who cannot meet the new threshold will only be allowed to place sell orders for instruments reserved for qualified investors.

The increase followed a scandal involving funds: last month, several well-known companies failed to fulfill redemption requests, causing panic in the market. The yields of some funds seemed implausibly high, yet they attracted small investors affected by high inflation: most of the half a million clients impacted by the crisis are small investors.

"This is very positive," said Haydar Acun, managing director of Istanbul-based asset management company Marmara Portfoy. "Before the threshold increase last year, anyone with even modest capital could attain qualified investor status and participate in the so-called crazy hype around Turkish hedge funds."

The previous threshold increase occurred in December 2025, from 1 million lira; at that time, previous professional investors retained their status. Over the past month, authorities have tightened measures against what the justice minister called a "scheme resembling a financial pyramid": the SPK has moved to liquidate 131 funds managed by seven companies. Investment firms showing suspiciously high returns by concentrating bets in illiquid stocks with low free-float are under investigation; dozens of financial executives have been arrested pending trial.

Last week, Finance Minister Mehmet Simsek met with dozens of asset managers, and President Tayyip Erdogan removed SPK Chairman Mahmut Sütcü. In August, the regulator had already tightened rules, limiting hedge funds' exposure to related parties and setting a cap on concentrated investments. The ensuing turmoil is partly attributed to both measures.

On Monday, the SPK extended the deadline for compliance with the new requirements until the end of January. The regulator also revoked the exemption for government securities from fund limits and the exemption from thresholds for qualified investors in real estate and venture capital funds.