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09.09.2011 Development of Mongolia's capital market, London Stock Exchange Group
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Transcript of 09.09.2011 Development of Mongolia's capital market, London Stock Exchange Group
2
High level objectives for the MSE – LSE strategic partnership
• Successful development of the Mongolian capital market
• Establish Mongolian Stock Exchange as a world class exchange
operator
- with an attractive listing regime
- international standards
- liquid trading market
• Develop a long term sustainable business model for the
Mongolian Stock Exchange
3
MSE Development Plan:
3
Exploit market
potentialTo attract a flow of IPOs
and companies to the
market & create an
environment appropriate
for future privatisations
Business modelEnhancing MSE’s
business model to
generate new
revenues and develop
new products
Regulatory frameworkImplementing new rules and regulations that
meet international standards;
New technologyIntroducing MillenniumIT technology at
the trading, surveillance and post
trade levels of the exchange value
chain;
Knowledge transferTraining the market, regulators
and staff to help them achieve
better understanding of the
operations and functions of the
Mongolian capital market
4
Improved Rules and Regulations
MSE
Rules & Regulations
MSE Listing rules
Trading rules
Membership rules
National legal
framework
Securities
Law
Companies
Act
Post Trade rules
Insider
dealing and
other criminal
laws
5
Developing companiesExisting listed companies who failed to meet the
new listing standards
MSE – Enormous Potential
ExistingCurrent listed companies who meet
(or close to) the new listing
standards
New DomesticsExisting Mongolian companies
which decide to list on the
market
Appro
x.
mark
et
capit
alisa
tion $m
Repatriations Mongolia companies listed on another exchange who decide to
dual list on MSE
Approx. timing
State PrivatisationsSignificant state assets listed on MSE and LSEG for capital
raising
New LicencesSmall parcels of mining assets sold off by
Government
Foreign ListingsSiberian mining companies too small to list on
MICEX (or London) but wanting to raise further
capital. Success could establish MSE as a
regional exchange
Increasing the quality of the companies on the market is key to attracting new
investors. There are seven categories of companies that we will target
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New technology
Custodians
and
NomineesBroadcast
Market Information
Reuters, Bloomberg,
News media, etc.
MSE
Network
Trading, Clearing & Settlement
Depository / Share Registry
Surveillance
Local Broker
Remote
Broker
Foreign
Broker
Market
Surveillance
Mongolian Stock
Exchange
Settlement
Bank
7
Introducing MillenniumIT
• MillenniumIT is a premier technology solutions provider serving the
global capital markets industry
• Its products currently power exchanges, depositories, brokerages and
regulatory bodies in the United States, Europe, Africa and Asia-
Pacific
• Millennium Exchange will power MSE’s trading platform and has a
superior technical performance, ultra low-latency and enhanced
functionality
• London Stock Exchange is using the same MillenniumIT technology to
power one of its premier platforms – SETS, where FTSE100 stocks are
traded
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Knowledge Transfer
• Academy of the London Stock Exchange is conducting a
broad range of Capital Market courses both in
Ulaanbaatar and London
• MillenniumIT is training staff and brokers on how to use
the system productively
• A Mongolia Desk is being setup at LSE to give MSE
employees an indepth exposure to financial markets in
London
9
High level project milestones
Phase1
Move to T+3 and international risk
management standardsSGF and investor protection
Q1-Q2
Q2
Development of new listing rules
Market education
Corporate governance & transparency
Phase2
Go live
30 Nov
Membership rulesRemote Access for
international brokers
Timings are indicative
10
Post trade and Listing
rules in detail
July August September October November December
T+ 3 Rule development Approval
30 Oct
Develop internal ops and procedures
inc. risk management
Develop market ops and procedures
inc. risk management
T+3 Go live
30 NovStaff and market training and
education
Roundtable
20 Sept
Draft listing rulesApproval
28 Nov
Options for existing listed companies Approval
28 Oct
Presentation to
companies and
advisors
Intr
oducti
on o
f T+3
New
Lis
ting R
ule
s
Timings are indicative
Roundtable
20 Oct
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Achieving the vision
Mongolian Stock Exchange will be:
• An attractive listing venue for companies and investors
- pool of quality domestic and international listed companies
- international standards of transparency and governance;
• Operating a liquid trading market
- range of trading products
- local and international brokers;
• Leading edge technology across the entire exchange value chain
• Offering competitively priced services, attractive to domestic and
international participants
• Operating a strong and robust business model with diversified
revenue streams and sustainable growth;
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No representation or warranty, expressed or implied, is made or given by or on behalf of London Stock Exchange Group plc
(the “Company”) or any of its group undertakings or any of its or their respective directors or any other person as to the
accuracy, completeness or fairness of the information or opinions contained in this presentation and no responsibility or
liability is accepted for any such information or opinions.
The content of this presentation includes statements that are, or may deemed to be, "forward-looking statements". These
forward-looking statements can be identified by the use of forward-looking terminology, including without limitation the
terms "targets", "plans", "aims", "believes", "estimates", "anticipates", "expects", "projects", "intends", "may", "will" or "should"
and terms of similar substance or the negative thereof. Forward-looking statements include, without limitation, statements
relating to the following: (i) future capital expenditures, expenses, revenue, earnings, synergies, economic performance,
indebtedness, financial condition, dividend policy, losses and future prospects; and (ii) business management strategies and
the expansion or growth of the Company’s operations and/or that of the Mongolian Stock Exchange or any of its group
undertakings (“MSE”). By their nature, forward-looking statements involve risks and uncertainties because they relate to
events and depend on circumstances that may or may not occur in the future and may be beyond the Company’s ability to
predict, and readers are cautioned that any such forward-looking statements are not guarantees of future performance. The
Company's and/or MSE’s actual results and performance may differ materially from the impression created by the forward-
looking statements contained in this presentation. In addition, even if the results and performance of the Company and/or
MSE are consistent with the forward-looking statements contained in this presentation, such results and performance may not
be indicative of results and performance in subsequent periods. Important factors that could cause results and performance to
differ materially from those expressed or implied by forward-looking statements include, but are not limited to: changes in
economic conditions; changes in the level of capital investment; success of business and operating initiatives and
restructuring objectives; customers’ strategies and stability; changes in the regulatory environment; fluctuations in interest
and exchange rates; the outcome of litigation; changes in political and economic stability; government actions; and natural
phenomena such as floods, earthquakes and hurricanes. Other unknown or unpredictable factors could cause actual results or
performance to differ materially from those in the forward-looking statements contained in this presentation. The Company
undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new
information, future events or otherwise, except to the extent required by applicable law and regulation.
This presentation and its contents are confidential and should not be distributed, published or reproduced (in whole or in
part) or disclosed by recipients to any other person.