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Approval of new regulation on the changes to the share capital and shareholding structure of banks after IPO www.melvilledalai.com
On 28 January 2021, the Parliament of Mongolia adopted the
Law of Mongolia on Amendments to the Banking Law (the
“Banking Law Amendments”) which, among other things,
required systemically important banks to become open joint
stock companies (i.e. a publicly listed company) by 30 June
2022, and other banks to become open or closed joint stock
companies. For more information, please refer to our previous
note on the Banking Law Amendments here.
The Banking Law Amendments was adopted within the framework of banking sector reform and a number of related developments. Some of these developments, including the approval of plans of five systemic banks on how they intend to meet the new requirements by the Bank of Mongolia (the “BoM”)
and the Financial Regulatory Commission of Mongolia (the “FRC”), have occurred since the adoption of the Banking Law Amendments; and one non-systemic bank has become a publicly listed company.
Article 36.6 of the Banking Law, enacted on 28 January 2010 (the “Banking Law”), revised as per the Banking Law Amendments, provides that the BoM is to make a decision on whether to provide its approval in respect of changes to the amount and structure of shares of an influential shareholder1 and issuance of shares and other securities classified as shares.
In light of the above, on 5 October 2021, the Governor of the BoM and the Chairperson of the FRC adopted a Joint Order No.A-262/ 262 approving the Regulation on the Approval of Changes to the
Share Capital and Shareholding Structure of a Bank in the form of a Joint Stock Company (the “New Regulation”).
The New Regulation is silent as to when it will become effective. However, it is likely that it will apply after banks are registered as joint stock companies.
Please review full article on the link https://www.melvilledalai.com/publications
Published Date:2022-02-23
