PACKAGE REGULATION FOR PROMOTING THE PARTICIPATION OF PROFESSIONAL INVESTORS APPROVED
On 25 May 2022, the Financial Regulatory Commission (FRC) of Mongolia revised regulations (including the Regulation for Establishing, Licensing and Supervising Investment Funds, and the Regulation for Licensing Investment Management) to increase the participation of professional investors in the domestic market.
Approving the above regulations provides for simplification of the requirements and conditions for establishing private investment funds. It also improves:
- regulation in establishing mutual investment funds,
- presentation of unit trust to the public,
- fund trading in the primary and secondary markets,
- requirements for investment activities and fund assets, and
- information transparency.
The Regulation for Establishing, Licensing and Supervising Investment Funds re-defined the operational requirements; dependent upon whether the mutual fund is public or private. Within the investment policy and strategy, items including:
- regulations on requirements for investment activities and fund assets,
- ensuring prudential ratio,
- calculating the value of the fund's net assets,
- trade unit rights back to fund (as for the public mutual fund), and
- regular organization of the issuance of unit trust by funds,
were all revised, in line with IOSCO recommendations and international standards. In addition, regulation of an exchange-traded fund was initiated, and regulations on organizing the exchange of fund unit trust (by financial instruments in the primary and secondary markets) and requirements for authorized participants were also covered.
The Regulation for Licensing Investment Management improves the regulation related to:
- licenses,
-requirements,
- terms and conditions,
- ethical principles,
- information transparency, and
- duties and responsibilities.
The regulation also reflected provisions related to having a system to prevent conflicts of interest, internal risk management, and a unit in charge of AML/CFT.
Source: Financial Regulatory Commission