On February 22, 2019, Mr. Nikhil Rathi, CEO of London Stock Exchange plc, Ms.Ayuna Nechaeva, Head of Europe, Primary Markets of London Stock Exchange Group and Mr. Philip Malone, British Ambassador of the UK visited the Mongolian Stock Exchange and rang the bell to open the 5,916th securities trading session.
During the meeting, representatives noted that the partnership of two exchanges has been fruitful for the past 8 years and reached numerous significant milestones. The parties expressed their willingness to continue their cooperation in the areas of developing new products, facilitating dual listings, promoting Mongolian capital market in the London based investors and strenghtening local market capacity.
In 2011, the Master Services Agreement was signed by the Mongolian Stock Exchange and the London Stock Exchange in order to modernize the stock exchange and develop the market in line with international standards. The objectives of the Master Service Agreement is establishing an appropriate regulatory framework, implementing new technology, developing a sustainable business model for the exchange as well to train market participants and exchange employees and Mongolian market has adopted significant changes during the years of partnership.
For instance, MSE played a significant role in cooperation with the LSE to align local market legislaton to international standards by drafting Mongolian Securities Markets Law and Investment Funds Law. The revised Securities Market Law laid the foundation for major developments in the market such as introduction of custodian services, nominee account ownership, T+3 settlement cycle, delivery versus payment mechanism, securities cross-listing, depository receipts, just to name a few. All the operational rules and regulations for the stock exchange as well as the securities clearing house and central depository were revised, in harmony with the new Securities Markets Law.
In 2012, MSE launched the integrated Millennium IT technology developed by LSEG subsidiary Millennium IT company. Millennium IT technology is used by approximately 30 stock exchanges and financial institutions in about 20 countries, including the London stock exchange itself. The introduction of Millennium IT technology has brought with it a number of advances such as better reliability and efficiency of trading, real-time monitoring and information of the trades and most importantly an opportunity for remote trading by the brokers as well as the end-investors. Advanced types of orders, pre-opening auctions, market stabilizing circuit breakers and re-opening auctions were introduced, making the trading practices in line with international standard.
The London Stock Exchange Academy has provided professional training for nearly 120 professionals including the staff of the stock exchange, clearing house, central securities depository as well as the securities companies. During the partnership, Mongolian stock exchange had senior officers appointed from the London stock exchange group as well as many other specialists working together with Mongolian professionals, facilitating the necessary knowledge transfer for the local staff, who can now carry on the market development activities to this day.
Both parties emphasized that the further expansion of collaboration will be crucial for the new product development, facilitating dual listing between the Exchanges, promotion of Mongolian capital market in the London based investors and capacity building of local professionals.
MONGOLIAN STOCK EXCHANGE