On September 30, 2021, Mr. David Sol, Head of Index Policy, Managing Director of FTSE Russell Group, a world-leader in the provision of global index and analytical solutions, sent an official letter to Mr.Altai, the CEO of ‘Mongolian Stock Exchange’ JSC. In this letter, Mr. Sol officially informed and congratulated that Mongolian market was included on FTSE’s Watch list for possible promotion to Frontier market status. 

The markets are categorized into four main categories from “Frontier” to “Developed” against a range of technical criteria and taken into account the perceptions of institutional investors. It reviews the classification of countries once a year and places them on a Watch list for possible promotion to the next category or demotion from its existing category within FTSE indices. To ensure transparency and objectivity, the country classification process is supported by the FTSE Russell external advisory committees. The Country Classification Advisory Committee, which is formed of market practitioners with technical expertise in trading, custody and investment management, and the Policy Advisory Board, which represents the views of leading global investors, are included in the process. 

Mongolia was first included in this category in 2012, but was removed in 2017 due to the replacement of the T + 3 system by the prepaid system and  withdrawal of the Settlement guarantee fund which was established to cover settlement risks.

In order to be classified to this category, the MSE has been working with market regulators and infrastructure organizations since 2017 to conform the settlement system to international practice and create investors with a favorable investment environment. As a result, the domestic capital market successfully shifted to the T+2 settlement cycle based on the Delivery versus Payment settlement mechanism starting from 31 March 2020, meeting major requirements of global investors, which, in turn, helped the Mongolian market be recognized in the international arena. Furthermore, it will help attract major institutional investors, increase trading turnover, improve liquidity, and accelerate market development.

We would like to congratulate the market regulators and other participating organizations who have worked together in the past to bring the domestic stock market in line with international standards.

MONGOLIAN STOCK EXCHANGE