Capital markets & securities

     Although Mongolia’s capital market remains underdeveloped and the banking sector dominates in the Mongolian financial market, it is rapidly developing in the recent years. Almost half of all the public offerings on the Mongolia’s main bourse between 2005 and October 2020 occurred after 2017 (i.e., eleven out of twenty-four IPOs). The other two noteworthy milestones have been the first ever secondary listing on the Mongolian Stock Exchange by a foreign-listed company (in June 2018) and the launch of the first ever the mutual investment fund (October 2020).

     Commercial banks in Mongolia have traditionally dominated Mongolia’s financial sector – they are estimated to make up as high as 95% of the financial sector. According to the Government’s Action Program for 2020-2024 and the Strategy to reduce interest rates, both approved by the Parliament of Mongolia in August 2020, the Government is planning to implement the banking sector reform in a short period of time, increase the capital of Mongolian banks and financial institutions, support economic growth with low-cost financing and develop capital market in its efforts to reduce banks’ high interest rates from average annual 18% to 12% as maximum.

     A Draft Law on Private Pension is expected to be discussed at the Parliament of Mongolia and, if adopted, would be legal grounds for introduction of private pension system and development of private pension funds in Mongolia, which, in-turn, would be a new source of long-term investment to the capital market.


     Mongolia’s capital markets have traditionally been dominated by equity stocks. The market regulator – Financial Regulatory Commission of Mongolia – are expected to issue regulations aimed at establishing the legal, regulatory, and institutional framework of corporate bond products. Also, the Financial Regulatory Commission, working with fintech organizations and Mongolian Fintech Association, has produced a draft of guidelines of regulatory sandbox, which is being expected to be a significant support for fintech startups in Mongolia.

     Finally, in October 2020, the Mongolian lawmakers have announced their plans to pass a new law which, if and when passed, would bring further activity to the capital markets. For instance, one of the proposals is to cap a single shareholder of a bank to 20% of the total shares in that bank and to require all existing commercial banks in Mongolia to start trading their shares publicly within 2022. (Currently, all commercial banks in Mongolia are privately held; no publicly-traded commercial bank exists).

     Our lawyers have been among the first to be authorized by the Financial Regulatory Commission of Mongolia to provide professional legal services for the capital markets participants and transactions.

     Our Capital Markets Practice offers efficient and prompt legal advice based on the legal expertise of our lawyers, which covers the full range of equity and securities–related transactions, including IPOs, secondary offerings, block trades, bonds, etc.

     Our Capital Markets and Securities practice is headed by Batjargal Gombosuren.


“N.B.: The experiences above include, among others, assignments personally led and/or completed by the lawyers of KhanLex Partners LLP during its 2014-2018 merger spell with another local firm under “MDS KhanLex LLP” (now de-merged).”

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