Mongolia removed from FTSE Russell Frontier Markets Watch List www.mse.mn
The Mongolian Stock Exchange was added to the FTSE Russell Frontier Markets Watchlist in 2012 as a result of the adoption of the T+3 settlement system. However, Mongolia had never officially qualified as a Frontier market due to the shift from T+3 settlement system to prefunded system and dissolving of the settlement guarantee fund that was designed to protect the market from systemic settlement failure.
In April, the Chairman of the Board of Directors and CEO of MSE met with FTSE Russell officials to discuss the situation that Mongolia may potentially be removed from the FTSE Frontier Markets Watchlist. Following the meeting, MSE made it a priority to implement T+2 settlement system and Delivery-versus-Payment mechanism, as such we formed a working group with the Mongolian Securities Clearing House and other market participants to speed up the implementation of necessary changes in the market infrastructure and worked closely on the drafting of the rules and regulations. We have notified on several occasions to the market participants including the Securities Clearing Corporation that there is a risk of removal from the Watchlist if the shift is not immediate. Unfortunately, FTSE Russell made their decision at their September review to remove Mongolia from the Watchlist due to the delay with compliance with the requirements and upon consideration that the re-implementation of T+2 settlement system is unlikely in the near future. Although it is disappointing, there is a possibility to be re-included on the FTSE Frontier Markets Watchlist if Mongolia adopts necessary changes before their next review in March 2018. MSE encourages all market participants to treat the compliance with FTSE requirements and potential inclusion into the Watchlist as a top priority.
Published Date:2017-10-03