Turkey's Capital Markets Board announced new regulations limiting hedge funds' exposure to related parties and capping concentrated investments. The updated guidelines, published Saturday, restrict funds to holding between 2% and 8% of an issuer's free-floating shares depending on free float ratio. Funds are also prohibited from investing more than 20% of their portfolio in capital market instruments issued by affiliated entities under management control.

The move addresses concerns about abnormal returns and repeated warnings from global index providers regarding market integrity. The rules apply to hedge funds operating within the Istanbul Finance Centre framework, aiming to enhance transparency and reduce systemic risk in Turkey's capital markets.