Ulaanbaatar/MONTSAME/. On September 20, Parliament Speaker G. Zandanshatar visited the Mongolian Stock Exchange, exchanged views on the current state and future prospects of the stock market, and rang the opening bell. Chairman of Financial Regulatory Commission D. Bayarsaikhan, Vice-Chairmen of FRC T. Tserenbadral and N. Khuderchuluun, Chief Executive of FRC T. Jambaajamts, CEO of the Mongolian Stock Exchange Kh. Altai and other officials attended the bell ceremony.

In his opening speech, D. Bayarsaikhan highlighted, “The FRC has undertaken the following measures in order to develop the capital market, increase the number of new products and services, enhance securities trade and liquidity, and increase investors’ trust within the framework of ‘Developing the capital market and reducing financing costs by promoting competition’ reflected in the ‘Strategy to Reduce Loan Interest Rate’ adopted by the Parliament of Mongolia.

Pursuant to international standards, Delivery versus Payment and the T+2 Settlement System were successfully introduced in order to enhance the capital market infrastructure.

A regulatory framework for dual-listing in which companies convert securities between domestic and foreign exchanges freely was created.

Within the scope of promoting the corporate bond market and forming a new market for professional investors, the Regulations of the Over-the-counter (OTC) Market was adopted in 2020. Thus, currently, two systems including exchanges and OTC markets were formed in the capital market.

To form a regulatory environment where local entities could raise funds by issuing IPOs and corporate bonds, an existing regulation was separated into two ones: the Regulation on Securities Registration and the Regulation on Bonds Registration. As a result, issuing public offerings has become easier, faster, and more cost-effective.

The Regulation on Investment Fund and the Regulation on Investment Management Company were improved to meet the international standard, in the scope of increasing the participation of professional investors. It leads to an increase in mutual public and private investment funds and exchange-traded funds.

As a result, in 2021, market capitalization reached MNT6.0 trillion (an increase of 95.8% compared

to 2020), and constituted 15.3% of GDP. Securities trades reached MNT1.4 trillion (a 21.6-fold increase since 2020); the highest ever level in the 30-year history of the capital market in Mongolia. The country is now considered to have the fastest-growing stock market in the world.

In addition, 66 corporate bonds (with a total value of MNT1.1 trillion) of 52 enterprises were registered, and more than MNT670 billion of funds were successfully raised over the previous year. Furthermore, 44 new financial products (including mutual investment funds, asset-backed securities for commercial purposes, digital bonds, bank IPO – Bogd bank, public investment fund, and others) were issued in the capital market.”

At the end of his speech, D. Bayarsaikhan emphasized that, in cooperation with respective authorities, the FRC will continue to take further measures to reform the legal and regulatory environment of the securities market and the privatizing of state-owned companies through exchanges. This development should lead to an increase in the role of the capital market in the economy, increase the level of competitiveness in the region, reinforce previous accomplishments, intensify future activities and increase investors’ trust.

During the ceremony, B. Dulguun (Director, Securities Market Department, FRC) presented the ‘Capital Market Overview, Development Policy and Regulation.’

Source: Financial Regulatory Commission of Mongolia