Turkey markets regulator bans short selling

Turkey markets regulator bans short selling

Turkey’s Capital Markets Regulator Imposes Short-Selling Ban to Stabilize Markets

In response to heightened market volatility following the arrest of Istanbul Mayor Ekrem Imamoglu, Turkey’s Capital Markets Board (CMB) imposed a temporary ban on short selling across all stocks in March 2025. The move aimed to curb further declines in the benchmark Borsa Istanbul index, which had fallen 17% after Imamoglu’s detention sparked concerns over rule of law and political stability according to Bloomberg. The ban, initially set to last until 25 April 2025, was later extended three times, remaining in place until 29 August 2025.

The CMB’s measures also included relaxing share buyback rules, allowing companies to repurchase shares above the previous closing price, and reducing the minimum equity capital requirement from 35% to 20%. These actions were framed as efforts to foster a "reliable, transparent, and stable" capital market environment while protecting investor interests according to Securities & Financial Times.

The regulatory intervention coincided with broader monetary policy adjustments. The Turkish central bank (TCMB) raised its key interest rate to 40% in March 2025 to combat inflation, though it later resumed rate cuts in August 2025 as market conditions stabilized.

Authorities reportedly planned to let the short-selling ban expire on 29 August 2025, citing improved market performance and the need to attract foreign investors. By March 2026, the Borsa Istanbul 100 Index had reached record highs, with foreign ownership in Turkish equities reaching 40% of total holdings.

The CMB’s decision to lift the ban reflects a shift toward normalizing market conditions, though the episode underscores the interplay between political developments and financial stability in Turkey. As of March 2026, the regulator has not reinstated restrictions, signaling confidence in the market’s resilience.

(https://www.securitiesfinancetimes.com/securitieslendingnews/regulationarticle.php?article_id=227768): Securities & Financial Times
(https://www.bloomberg.com/news/articles/2025-03-23/turkey-bans-short-selling-eases-buybacks-to-stem-market-slide): Bloomberg
(https://www.securitiesfinancetimes.com/securitieslendingnews/regulationarticle.php?article_id=227768): Securities & Financial Times
(https://www.bloomberg.com/news/articles/2025-08-25/turkey-set-to-end-ban-on-investors-short-selling-stocks): Bloomberg