Turkey plans to enforce stricter penalties for market manipulation.

The Turkish government has announced new plans to enforce stricter penalties for market manipulation, aiming to target individuals who benefit from fraudulent activities even if they are not directly involved in them. The proposed draft law has been revised to include penalties for those who indirectly benefit from market manipulation schemes, based on information provided by anonymous sources to Bloomberg.

In addition to cracking down on individuals who profit from market fraud without direct involvement, the revised draft law will also target people or companies under reasonable suspicion of fraudulent activities, including those related to investment funds. Reports from the Capital Markets Board, the financial regulatory body in Türkiye, will be used as the basis for identifying potential suspects engaging in fraudulent activities.

One of the key changes included in the revised draft law is an increase in fines for violators. The amount that offenders can pay to avoid prosecution has been doubled from a fixed sum of ₺500,000 ($11,403) to twice the amount gained from their illegal activities. This stricter financial penalty is aimed at deterring individuals from engaging in market manipulation by making the consequences more severe and financially impactful.

The draft law also proposes extending the prison term for market fraud from the current three-year sentence to five years, with no possibility of deferral for those convicted. These increased penalties are part of the government’s efforts to curb fraudulent activities in the financial markets and ensure a fair and transparent investment environment for all stakeholders.

The decision to revise the draft law came after concerns were raised about unusually high returns from some Turkish investment funds, prompting suspicions of market manipulation. In response to these concerns, Treasury and Finance Minister Mehmet Simsek acknowledged the presence of manipulation in certain investment funds and pledged to strengthen the regulatory framework to address these issues effectively.

Capital Markets Board Chairman Omer Gonul also emphasized the need to prevent unethical practices in the use of investment funds, signaling the regulatory agency’s commitment to addressing fraudulent activities in the financial markets. While the specifics of the revised draft law are still subject to potential changes or abandonment, it is expected to be presented to the Turkish parliament for consideration in the coming weeks.