Legal framework of bond market to be improves

Oyundelger 2018-10-03 02:10

Economy

Mongolian Stock Exchange signed a Memorandum of Understanding with the Credit Guarantee Fund of Mongolia to establish a legal framework of guaranteed bond issues and to enable an access of small and m

Mongolian Stock Exchange signed a Memorandum of Understanding with the Credit Guarantee Fund of Mongolia to establish a legal framework of guaranteed bond issues and to enable an access of small and medium enterprises to bond market. The cooperation between Mongolian Stock Exchange and the Credit Guarantee Fund will provide companies that do not meet the legal requirements, an opportunity with raising their required funds with the support of credit guarantee system. In recent years, the securities market has demonstrated increased activity with successful Initial Public Offerings and Secondary Public Offerings. It is crucial to increase bond trading as well as to improve the legal environment of bond issues for the further stable growth of the market. A bond is a mutually beneficial financial instrument for issuers - raising capital with lower interest rate and investors - receiving better returns compared to the returns given by banks. According to the Securities Market Law, the total value of debt instruments issued by a company shall not be greater than the relevant company's net asset value.