| ISTANBUL, June 25
ISTANBUL, June 25 Turkey's Capital Markets Board
has launched a detailed investigation into financial orders at
brokerages, with a focus on foreign transactions, during a
period of high market volatility in recent weeks.
In a confidential document seen by Reuters on Tuesday, the
regulator requested information on brokerages' personnel, copies
of research reports, logs of communications with customers and
more for the period of May 20 to June 19 in what sources close
to the matter described as unprecedented in scope.
An official at the Capital Markets Board told Reuters the
watchdog had sent brokerages the document in its investigation
into recent volatility in financial markets.
"This is a decision for a limited probe in connection with
the period of high volatility in the market that began with the
Federal Reserve's statement," the official said on condition of
anonymity. "If you look at the date, you can see that it
coincides with May 20, when the Fed began its statements."
The market volatility also coincided with three weeks of
anti-government protests during which Prime Minister Tayyip
Erdogan repeatedly accused market speculators of seeking to
destabilise the Turkish economy.
The protests began on May 28 against government plans to
develop an Istanbul park but quickly mushroomed into riots in
which some 5,000 people were injured and four killed.
Erdogan has accused domestic and foreign speculators and
what he calls an "interest-rate lobby" of fomenting unrest to
undermine Turkey's increasing affluence after inflation and
interest rates have fallen to record lows during his decade in
"This is the most wide-reaching information request that
I've ever seen," a broker with knowledge of the request said.
The focus "on foreign transactions appears to try to identify
the so-called interest-rate lobby."
Among the list of information sought by a June 27 deadline,
the document said: "A need has arisen for information ... in the
form of telephone records, written instructions, orders sent
over the Internet and all chat logs related to the instructions
sent to your institution by foreign clients between May 20 and
June 19 (and) information on how orders from your foreign
customers were received and how and through which channels these
orders were delivered to the bourse."
Turkey's stock market has plunged 21 percent since May 20
and its lira has lost 5 percent of its value against the dollar,
in part because of the protests but mainly on worries the U.S.
Federal Reserve could taper its bond-buying programme which was
aimed at stimulating the world's largest economy and has spurred
investment in higher-yielding emerging markets like Turkey.
Fed Chairman Ben Bernanke said on May 22 that the U.S.
central bank could slow down its bond buying, and on June 19 he
said tapering of the programme could come by year end.
Traders have said that concerns about political stability
stemming from the anti-government protests saw Turkish assets
suffer steeper losses than other emerging markets.
Tens of thousands of people have staged protests in
Istanbul, Ankara, Izmir and other major cities, with a diverse
list of grievances against the government, including
infrastructure development, Erdogan's perceived authoritarianism
and signs of society's conservative tilt under his
Islamist-rooted party's rule.