Z.NARANTUYA: IT’S TIME TO WASH FACES AND CHANGE CLOTHES FOR JOINT STOCK COMPANIES

(24 Nov 2015)Mrs. Z.Narantuya chair of the Financial Regulatory Commission gave detailed interview in relation to current emerging market scenario, vision, challenges and trends of the market. She considers that financial market structure must be developed in balanced and sustainable manner.Trade index of Mongolian stock exchange reached its historical lowest level and as a regulator, what is your opinion on this?Listed shareholding companies trade activeness is quite low in our capital market. From this we can see that we need to improve corporate governance and its products in order to uplift above shown percentage indicator.

 First of all operations of the shareholding companies must be transparent which will increase the trust of the investors.Last year companies use to hide its internal information too much. This is one the indicators of how much corporate governance have been developed. How we can improve on this?Yes unfortunately it’s true that share holding companies use to be floppy in this regard. Investors trust reduces as far as the information being closed. Due to this issue we didn’t reached the full level of protection of investors.The interests of small shareholders still affected. We understand that Financial Regulatory Commission is the organization which will protect interest of these shareholders.Almost one year has been passed since I have been appointed as a Chair of the FRC. During this period of time, I have made some changes such as restructure of internal management. Thus in order to protect shall shareholders and other market participants we have established a separate division which stands for receive of complains and disputes. Small shareholders customer right protection is one the main function of the FRC. After analyzing of received complains we can see directly where the market violations are occurring. Mitigation of dispute and complains in short period of time has been included in the development strategy plan.Do you have any companies which approach you with issue of bonds?It’s open for the companies which have very good project proposal. From the side of the FRC and MSE are ready to provide assistance and professional advice. There were few companies which approached us in issue of asset backed bonds. Healthy competition in the market is important.There were 15 legal entities or enterprises are included in the list of privatization and reorganization. Out of this, nine companies 30 percent of total shares will be offered to the public through stock exchange. Can this kind of action boost the capital market of Mongolia?-Government decided to offer to the public 30 percent of total shares for sake of capital market activation. Privatization of some state owned enterprises through stock exchange is a visionary steps made by Government. Of course offered products must be demandable. Therefore we need take associated proper steps in order to increase the value of the share and improve the reporting and governance indicators. For increase of value we need to wash the face and dress up with new clothes.

Source: www.frc.mn