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Mongolia Regulatory Compliance for FinTech Companies Takes a Step Forward

Introduction

The Mongolian government has made significant strides in supporting the growth of FinTech companies by introducing a regulatory sandbox. The Financial Stability Council, comprising key government officials and financial regulators, approved the “Regulation for Regulatory Sandbox” on March 1st.

What is the Regulatory Sandbox?

This new regulation allows FinTech startups to test their innovative products and services in a controlled environment under relaxed regulatory requirements for a period of up to two years. The sandbox aims to facilitate financial innovation while ensuring consumer protection and maintaining financial stability.

Key Aspects of the Regulation

• Participant Requirements: Must be registered in Mongolia, have no outstanding debts, and meet anti-money laundering requirements.
• Product and Service Requirements: Must be novel, well-defined, and ready for testing with adequate technological development.
• Risk Management Controls: Essential for participants, including customer protection plans.
• Exit Strategies: Required for participants, including transition plans to enter the market after successful implementation.

Implementation Details

The sandbox period can last up to two years, with a possibility of extension for another year upon request. The Financial Regulators will work closely with government agencies to create a favorable legal framework for introducing successful products and services to the market.

Conclusion

The introduction of the regulatory sandbox in Mongolia offers a promising opportunity for FinTech companies to innovate and grow while ensuring regulatory compliance. As the country continues to develop its financial ecosystem, it is likely to become an attractive destination for investors and businesses seeking to tap into the potential of the Asian market.