Newsletter-21

238 NEWSLETTER 2016 Financial Reporting Principles of Mutual Funds* Att. Selen Ozturk Introduction The financial reporting principles of mutual funds are regulated under the Communique on the Financial Reporting Principles of Mu- tual Funds (II-14.2) (“Communique”) 1 . The Communique determines the principles, procedures and basis regarding the preparation of fi- nancial reports. While the Communique sets forth the requirements that mutual funds have to abide by, it does not cover foreign mutual funds and, thus, foreign mutual funds are not obliged to abide by any principle pursuant to the Communique. The financial reporting obliga- tions of foreign mutual funds are limited to the country legislation under which the mutual funds are bound. This month’s newsletter article examines the financial reporting principles as specified under the Communique. This newsletter article will not examine the distinct principles regarding umbrella funds and real estate mutual funds. Financial Reports Mutual funds are obliged to prepare various reports and tables in order to fulfill their financial reporting obligations. Accordingly, mutual fund obligations also include the preparation of financial ta- bles, value reports and asset allocation tables. Besides, venture capital mutual funds and real estate mutual funds are also obliged to have consolidated financial tables prepared. Such funds must also have unconsolidated, individual financial tables prepared, along with con- solidated tables within such financial table preparation period. * Article of December 2016 1 Published in the Official Gazette dated 30 December 2013 and numbered 28867 (Reiterated).