On the 28th of January, 2015 the deficiency of the trade volume and liquidity in the years of 2013 and 2014 have been discussed. Based on the analysis of the Working Group consisting of representations from the FRC, MSE, SCH&CD and MASD, in order to form a fundamental condition to activate the securities trading and improve securities liquidity, starting on the 16th of February, 2015, the securities settlement shall follow the T+1 procedure where the settlement shall be completed within a day since the securities are completed at the MSE.
According to the provisions of the Resolution, for the purposes of approving the settlement and prevent payment risk, the order shall be inserted into the MSE trading system only after the securities payment has been pre-located 100% at the client’s account. The Resolution also orders the brokerage and dealer’s company shall satisfy the condition to select more than one bank which completes the settlement.
As a result of this Resolution, the liquidity and trade volume of the securities market shall increase; further an independent settlement structure shall be created and custodian activities shall be introduced into the market and the settlement procedure could be extended up to T+3.
source:www.frc.mn