The revised Securities Markets Law (2013) served as a gateway to new opportunities for the Mongolian capital markets. One such opportunity was the possibility of dual listing, which would enable foreign public companies to be listed on the Mongolia Stock Exchange (MSE) and domestic companies to be listed on foreign exchanges.

Although the legal framework for dual-listing was established in 2013,  companies operating in Mongolia but listed on foreign stock exchanges were not able to list their shares on the MSE due to the absence of a dual-listing regulation.

Therefore, the MSE and the Financial Regulatory Commission (FRC) formed a working group to develop the “Provisional Regulation on Registering the Shares of Foreign-Listed Companies and the Shares of Domestic Listed Companies Dual-listing Overseas”, which was approved by the FRC Meeting on November 24, 2017.

Companies looking for a secondary listing are usually incorporated overseas and have their primary listing on their home exchange. Due to the fact that they follow their home laws and regulations, the secondary exchange normally provides initial and ongoing exemptions as per common international practice. Therefore, the highlight of this regulation is the enabling of the foreign-listed issuers that are being dual-listed in Mongolia to follow the laws and rules of their home exchange and for their reporting purposes, professional opinion such as those by international audit and legal firms are to be equally accepted as if they are provided by domestic professional companies.   

Accordingly, the most important requirement for foreign-listed companies looking to be dual-listed on the MSE is to have their primary listing on one of the 26 stock exchanges approved by the FRC. Given the company satisfies this requirement, the remaining procedures are designed to be simple and straightforward.

The approval of this regulation is a significant development milestone for Mongolian capital markets in that it will enable approximately 30 foreign-listed mining companies operating in Mongolia to be listed on the MSE, giving the Mongolian public the opportunity to share the rewards and risks of their businesses. 

MONGOLIAN STOCK EXCHANGE