Discussion held on amendments to securities market regulations

Economy
baljmaa@montsame.gov.mn
2020-08-19 15:29:49

Ulaanbaatar /MONTSAME/. The Financial Regulatory Commission (FRC) seeks to strengthen the securities market policies and regulations; in line with international standards, for investors’ and professionals’ needs, to broaden collaboration with international organizations and to develop advanced technologies and market infrastructure.


Within the framework of this work, the following regulations - approved by resolutions of the FRC - were revised in accordance with the General Administrative Law and in conformity with international standards:


1. “Procedures on registration of legal entities listed on foreign exchanges to trade securities on the Mongolian Stock Exchange and legal entities listed on the Mongolian Stock Exchange to trade securities on foreign stock exchanges.”


2. “Regulation on licensing for the conduct of regulated activities in the securities market.”


3. “Procedure for registration of depository receipts and public offerings.”


On 23 July, a discussion of the regulations took place among professional organizations participating in the securities market.


Representatives of securities firms, custodian banks, joint stock companies, (including: the Mongolian Stock Exchange, the Mongolian Central Securities Depository LLC, the Mongolian Securities Clearing Centre LLC, and the Mongolian Association of Security Dealers) participated and made specific comments on the draft regulations.


Participants welcomed the fact that the draft regulations had been drawn up in accordance with international standards and market needs. It was also appreciated that the FRC was actively cooperating with professional organizations in the development of the securities market policies and regulations.


In its Financial Market Review for the first half of 2020, introduced on August 17, the Financial Regulatory Commission (FRC) reported that the FRC has been reviewing the activities of a total of 2,854 regulated entities. 


Among them, there are; 304 joint-stock companies listed on stock markets, 222 professional participants, 143 companies and professional entities in the insurance market, 542 non-banking financial institutions, 256 credit and saving cooperatives, 103 real estate brokers and 275 dealers of precious metals and stones. As of the second quarter of this year, there are 53 brokerage companies operating with total assets of MNT 94.3 billion. 


Market capitalization of listed companies is at around MNT 2.5 trillion, with decrease of around MNT 100 billion compared to last year, mostly due to impacts of COVID-19 pandemic, explains FRC. The market capitalization percentage in the country’s GDP is calculated at around 6.8 percent. Moreover, the Mongolian Stock Exchange (MSE) TOP 20 Index was decreased by 4,577 points to 16,208. 


In the given period, total volume of sales on the stock market reached MNT 29.1 billion, 80.8 percent of which is made up of stock trading, 17.2 percent are corporate bond trading and 2 percent are government securities trading.