Mongolia to Overhaul Regulatory Framework for Financial Institutions

In a significant move aimed at modernizing the country’s financial landscape, Mongolia’s regulatory body for non-banking financial institutions (NBFIs) has released a draft law intended to replace the existing regulatory framework.

Background

The Financial Regulatory Commission of Mongolia (FRC), responsible for overseeing NBFIs in the country, published the proposed Law on Non-Banking Financial Activities in July 2018. The draft law, dated June 13, 2018, is now available on the FRC’s website for public review and comment.

Key Changes

The new legislation will introduce significant changes to the existing regulatory framework, which has been in place since 2002. If adopted, the Law on Non-Banking Financial Activities will be replaced by a more comprehensive and modern set of rules governing NBFIs in Mongolia.

Main Provisions

• The draft law aims to provide a clearer definition of non-banking financial activities and establish a more robust regulatory framework for NBFIs.
• It introduces new requirements for licensing, registration, and supervision of NBFIs.
• The law also seeks to enhance consumer protection by introducing stricter standards for marketing and advertising practices.

Next Steps

The draft law is currently open for public review and comment. Once the feedback period closes, the FRC will consider the suggestions and finalize the legislation. If adopted, the new Law on Non-Banking Financial Activities will be implemented in phases to minimize disruptions to the financial sector.

This development marks a significant step towards modernizing Mongolia’s regulatory framework for NBFIs, aiming to enhance transparency, stability, and consumer protection in the country’s financial landscape.