Institutional Arrangements for Financial Consumer Protection Supervision in Mongolia
Mongolia’s institutional framework for financial consumer protection is shared among three primary institutions: the Bank of Mongolia (BoM), Financial Regulatory Commission (FRC), and Agency for Fair Competition and Consumer Rights (AFCCR). Each institution has a unique role, but their mandates and responsibilities are not clearly defined, leading to potential confusion and gaps in supervision.
Key Institutions
1. Bank of Mongolia (BoM)
The BoM is traditionally seen as the primary regulator for financial stability in Mongolia. However, there is an ongoing debate about expanding its mandate to include market conduct regulation and enforcing rules regarding banks’ business practices towards consumers.
- Traditional role: Ensuring financial stability
- Potential expanded role: Regulating market conduct and enforcing consumer protection rules
2. Financial Regulatory Commission (FRC)
The FRC is responsible for regulating and supervising the securities and insurance markets in Mongolia, with a focus on protecting investor rights and interests.
- Regulatory scope: Securities and insurance markets
- Key powers: Resolving disputes between market participants and their clients
3. Agency for Fair Competition and Consumer Rights (AFCCR)
The ACCF is empowered to protect consumer rights across various sectors, including financial services. However, its activities in this area have been limited, primarily focusing on monitoring banks’ fees and interest rates rather than addressing consumer complaints or financial product services.
- Regulatory scope: Broad consumer protection
- Key powers: Monitoring banks’ practices, resolving disputes
Challenges in Institutional Arrangements
While each institution has a critical role to play in ensuring effective supervision and protection for consumers of financial products and services, the lack of clarity regarding their division of responsibilities presents significant challenges.
- Overlapping powers: The unclear distribution of authorities among institutions can lead to confusion and duplication of efforts.
- Inadequate consumer protection: The limited focus of some institutions on specific aspects of consumer protection may leave gaps in overall supervision.