On January 29, 2020, FRC adopted a decision to shift to DvP with T+2 finality system starting from March 31, 2020 by its Resolution No.29. 

Under this new system, investors will be able to buy securities with certain amount of margin depending on their risk exposure and transfer the remaining payment for finalising the settlement in 2 business days after the trade takes place, through a brokerage firm who is the clearing member of the Mongolian Securities Clearinghouse (MSCH). 

If an investor trades through a brokerage firm who is not a clearing member of the MSCH, he will have to prepay the fund according to the current scheme, however, the settlement will be finalised on T+2 day. 

Within the framework of the introduction of DvP with T+2 finality system, FRC has approved the relevant rules and regulations of market operating organizations, took necessary measures to establish proper risk management system to prevent financial system from possible risks, ensured that technology and systems are upgraded and emphasized to enhance the market stability and serve the best interests of investors and market participants. 

The introduction of DvP with T+2 finality arrangement will help to lower costs associated with trading, improve market liquidity as well as create better market environment to both domestic and international investors. 

Furthermore, it will be an important step to develop domestic capital market infrastructure and securities settlement operations along with international standards. 

Source: FRC