The initial public offering or the practice of market capitalization for the first time regulated is that the “IPO issue” process is based on the Securities Market Law, Company Law, and the Securities Regulations Procedure approved by the Financial Regulatory Commission’s Resolution No. 408 of 2015.
Эhe development of capital markets in Mongolia has been known since the early 1990s, but IPO is fully launched in 2005. During this period, 22 companies successfully launched an IPO and attracted 98.5 billion MNT to 16 companies.Four IPOs were unsuccessful or did not attract investment, the two companies refused to register the shares by FRC decition.
As of today, one company has been requesting to issue securities through “Mongolian Stock Exchange” and another on company is through “Mongolian Securities Exchange”.
In the “Securities Listing Regulation”, the company shall submit the prospectus and related documents to the trading organization and the FRC simultaneously, and the FRC shall record the securities on the basis of the conclusions and opinions of the trading organization.
When the FRC is concerned with determining the legal justification of documents, the stock exchange is primarily concerns probability and effectiveness in business operations, asset valuations and prospects of that particular issuer.
It requires the capital market international organizations to oversee the control of the state regulatory agency for primary and secondary markets responsibility, which is valid. Therefore, the oversight of the FRC is important to protect the investors from risks and to increase the quality of new types of products and services.
The documents must submitted by the IPO issuer and must reviewed by the FRC by the relevant laws and FRC can require additional material if necessary.
It is becoming common that companies are incomplete for provide basic and additional documentation and misrepresents information in the securities prospectus. FRC is notifying for firms preparing IPO submission to make it accurate and complete with required documentation to eliminate such violations. If violation appears, both sides writes formal letter to contact and it could be not efficient for time being.
Source: www.frc.mn