95 CAPITAL MARKETS LAW Portfolio Management Companies 101* Yağmur Zeytinkaya The portfolio management companies (“PMC”) that are defined under Article 55 (Portfolio Management Companies) of Capital Market Law numbered 6362 (“CML”) are joint stock companies whose main activity is the establishment and management of investment funds. Portfolio management can be defined as “managing portfolios consisting of capital market instruments (...) and other assets and transactions approved by the Capital Markets Board (“Board”) acting in the capacity of a proxy within the framework of the portfolio management agreement to be entered into with customers in line with the risk-return preferences to be determined by the investor or the portfolio manager”.1 As the capital markets in our country and in the world reach a certain level of development, the investors tend to seek professional support for the management of their assets and, therefore, apply to PMCs. This Newsletter reviews the basic legislation on PMCs, portfolio management agreements and liability of the damages arising from the portfolio management. Legislation on PMCs; Establishment and Activities of PMCs Article 55 (Portfolio Management Companies) of the CML regulates the fundamental matters on PMCs. Moreover, Communiqué on Principles Regarding Portfolio Management Companies and Activities of Such Companies numbered III-55.1 (“Communiqué numbered III55.1”) and Communiqué on Principles Regarding Investment Services, Activities and Ancillary Services numbered III-37.1 (“Communiqué numbered III-37.1”) are also significant in relation to this matter. The first remarkable subject under Article 55 of the CML is the requirement to obtain permission from the Board for the establishment and operation of PMCs. Pursuant to Article 43 (Establishment * Article of February, 2021 1 https://spk.gov.tr/Sayfa/AltSayfa/447 (Access date: 23.01.2022)
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