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Capital Market

Capital, insurance and micro-finance market account minor section of the financial sector of Mongolia due to the dominance of banking industry. Developing banking industry and capital markets in balance ensures the stability of financial sector and has significant impact on the economic development.

Financial Regulatory Commission of Mongolia (“FRC”) and the Mayor of Ulaanbaatar have introduced an ambitious goal to make Ulaanbaatar the financial hub of Central Asia. At one point Mongolian Stock Exchange (“MSE”) was announced as the fastest growing stock exchange (in 2010) in the world. Additionally, the state has been implementing policy to support capital markets with pleasant legal environment. In 2013, the State Great Khural has passed the revised version of the Law on Securities Market and the first separate Law on Investment Fund. The FRC has adopted the relevant regulations accompanying these laws. These new laws and regulations have resulted in a possibility for foreign companies to issue securities in MSE, for Mongolian companies to issue securities in foreign stock exchanges and to protect the interests of investors by establishing legal environment for a wide range of professional activities, including custodian and investment management. The signing of IOSCO Multilateral MoU by the Financial Regulatory Commission has become actual opportunity for Mongolia to join international capital markets.

Only one state-owned stock exchange (MSE) has been operating since the formation of capital markets in Mongolia, and the first private Securities Exchange based on NASDAQ standards has been established in 2016. These events raise hope that there is a possibility that the capital market that has developed as a result of privatization can be developed into a modern highly-developed sector.

Our firm is registered as the first law firm that is authorised by the FRC to provide legal services in the capital markets.

Although the capital market has not been active in the recent years, we have been actively providing legal service on issuance of securities and insured bonds. We also have been selected to advise on offering of up to 30% of the shares of major SOEs in energy sector that is being conducted under the state policy on privatisation. Represented the Mongolian FinTech company for issuing the IPO in domestic market of Mongolia. We advised on due diligence, legal opinion, reviewing, collecting and preparing the submission documents for IPO to the regulatory of Mongolia. Our Capital Markets practice is led by Dugerjav Dash-Onolt. She is a lawyer qualified and experienced in IOSCO principles, legal framework of capital markets, state policy and practice in Mongolia.

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