Legal regulation of the public offer and sale of securities – Securities
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The public offering and sale of securities is one of the alternative means of attracting investment and developing one’s business. In 2021, there were 314 joint-stock companies (hereafter “JSC”) registered in Mongolia, and securities worth 1.4 trillion MNT (approximately $452.09 million) were traded on the market, which is 21.6 times higher than in 2020 and increased the results by 64.3% compared to 2017. Of the total trade, 74.1% is corporate bonds, 4.0 % of investment fund shares, 0.3% of asset-backed securities and 21.6% of stocks, respectively. Further, in terms of trading level of shares, it reached a total of 304.9 billion MNT (about 98.4 million USD) in 2021, an increase of 3.9 times compared to 2017 and 5.7 times compared to the previous year. In addition, trade in corporate bonds increased by 103.2 times compared to the same period in 2017 and by 180.1 times compared to the same period in 2020, reaching 1,048.2 billion MNT (about 338 $.4 million) (Financial Regulatory Committee, 2021).
With the growth of the capital market, companies increasingly tend to use the issuance of securities to attract investment instead of high interest loans from commercial banks. In this regard, the regulations and requirements relating to the issuance of securities for raising capital are described in this legal alert.
The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.
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