​CROSS LISTINGS NOW POSSIBLE UNDER NEW FRC REGULATIONS

The revised Law of Mongolia on Securities Market was adopted in 2013 (the “Securities Law”), introducing new concepts for the Mongolian securities market and opening more opportunities for Mongolian companies to raise capital. One of those new concepts is “cross listing” (also known as inter-listing or dual listing) that is the listing of securities of joint-stock companies (the “JSC”) on more than one exchange. This allows JSCs listed on a foreign exchange to be listed on the Mongolian Stock Exchange and JSCs listed on the Mongolian Stock Exchange to be listed on a foreign exchange. As of May 2016, there are 31 JSCs that have operations in Mongolia but are listed on foreign exchanges such as in New York, London, Hong Kong, Singapore, and Toronto.

According to the Securities Law, the Financial Regulatory Commission (the “FRC”) is to adopt rules on cross listing and to register those JSCs with dual listing.

Following the regular meeting of the FRC held on 24 November 2017, the FRC has adopted the “Temporary rule on registering JSCs listed on a foreign exchange being listed on Mongolia Stock Exchange and JSCs listed on the Mongolian Stock Exchange being listed on a foreign exchange” (the “Rule”). Also the “Temporary list of foreign exchanges where JSCs are able to cross list their securities on the Mongolian Stock Exchange” (the “List”) was adopted by the FRC on 20 July 2017 listing the most popular 26 exchanges around the world. (Please find the List below)

As for JSCs listed on the foreign exchanges in the List, the Rule is intended to lower requirements of the Mongolian Stock Exchange, to allow JSCs to follow the legislation of where the listed exchange is located or where incorporated, to ratify an audit report or legal opinion executed by international companies with the same effect as if it was executed by local companies’ report or opinion, and to reduce registration burdens on the cross listed JSCs.

However, this Rule will not apply to JSCs that are not listed on any other foreign or local exchanges, are listing their shares on an exchange for the first time, or are cross listing their shares on the foreign and local exchanges at the same time for the first time.


Temporary list of foreign exchanges where JSCs are able to cross list their securities on the Mongolian Stock Exchange


BATTUSHIG.B, Partner (battushig@gtsadvocates.mn, tel+976 331020)

SUVD.T, Paralegal (suvd@gtsadvocates.mn, tel+976 331020)