(2022.10.10-ны өдрийн хянасан орчуулга)                         Unofficial translation

LAW OF MONGOLIA

November 17, 2005                                                                                  Ulaanbaatar city

ON THE LEGAL STATUS OF FINANCIAL REGULATORY COMMISSION

CHAPTER ONE

GENERAL PROVISION

Article 1.Purpose of this law

1.1.The purpose of this law is to define the structure of the Financial Regulatory Commission, legal grounds of its activities, and govern relations arising from regulation and monitoring financial services other than banking activities.

Article 2.Legislation on the Legal Status of the Financial Regulatory Commission

2.1.Legislation on the Legal Status of the Financial Regulatory Commission is comprised of the Constitution of Mongolia, the Civil Code, the Law on Non-bank Financial Activities, Law on Securities, Law on Insurance, Law on Professional Insurance Intermediaries, Law on Cooperatives, this law, and other relevant legislative acts issued in conformity with these laws.

/This paragraph was amended according to the law as of October 27, 2011/

2.2.If an international treaty to which Mongolia is a party is inconsistent with this law, then the provisions of the international treaty shall prevail.

Article 3.Scope of this law

3.1.The financial services stated in this law shall include the following:

3.1.1.the activities of non-bank financial institutions stated in the Law on Non-bank Financial Activities;

3.1.2.the activities of professionals participating in the securities market stated in the Law on Securities;

/This sub-paragraph was amended according to the law as of May 24, 2013/

 3.1.3.the activities of insurers stated in the Law on Insurance;

3.1.4.the activities of insurance intermediaries, insurance brokers, and assessors evaluating damages and losses stated in the Law on Professional Insurance Intermediaries;

3.1.5.the activities of deposits and loan cooperatives stated in the Law on Cooperatives;

/This sub-paragraph was amended according to the law as of October 27, 2011/

3.1.6.the activities of asset-backed securities stated in the Law on Securities;

/This sub-paragraph was amended according to the law as of April 23, 2010/

 3.1.7.the activities stated in the Law on Loan Guarantee Fund;

/This sub-paragraph was added according to the law as of February 10, 2012/

3.1.8.the activities of insurance stated in the Law on Index-based Livestock Insurance;

/This sub-paragraph was added according to the law as of June 13, 2014/

3.1.9.the activities of dealers in precious metals and stones, or goods made with them;

/This sub-paragraph was added according to the law as of October 10, 2019/

 3.1.10.the activities of real estate agents;

/This sub-paragraph was added according to the law as of October 10, 2019/

3.1.11.the activities of virtual asset service providers stated in the Law on Virtual Asset Service Providers.

/This sub-paragraph was added according to the law as of December 17, 2021/

3.1.12.other financial activities stated in the law.

/The number of this sub-paragraph was amended according to the law as of December 17, 2021/

/The number of this sub-paragraph was amended according to the law as of April 23, 2010/

/This sub-paragraph was amended according to the law as of February 10, 2012/

/The number of this sub-paragraph was amended according to the law as of June 13, 2014/

/The number of this sub-paragraph was amended according to the law as of October 10, 2019/

3.2.The relevant relations related to banking activities shall be regulated by the legislation on banking.

CHAPTER TWO

THE FINANCIAL REGULATORY COMMISSION, ITS POWERS AND RELATIONS TO OTHER ORGANIZATIONS

Article 4.Financial Regulatory Commission

4.1.The Financial Regulatory Commission (hereinafter referred as the 'Commission') is the state authority to ensure the stability of the financial market, regulate financial services, monitor implementation of relevant legislation, and protect the rights of investors and clients of the financial market.

4.2.The charter of the Commission shall be approved by the State Great Khural.

4.3.The Commission may have its own symbol representing the characteristics of the activities it is responsible for and shall use the seal, stamp, and official letterhead.

Article 5.Principles of the Commission's activities

5.1.The Commission's activities shall be based on the principles of independence, transparency, and impartiality, preserving the stability of the financial market, and protection of public rights and legal interests. 

Article 6.Powers of the Commission

6.1.The Commission shall exercise the following powers:

6.1.1.organize and undertake activities to promote compliance with legislation related to financial services;

6.1.2.approve rules, procedures, and guidance within its authority, monitor their implementation, and define necessary criteria and other standards to support the stability of the financial market;

6.1.3.grant, suspend, revoke, restore permits (hereinafter referred as a 'permit') for carrying out financial services, and monitor the implementation of the permit's requirements;

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

6.1.4.monitor the activities of permit holders;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

6.1.5.set the fees for regulatory services to be imposed on permit holders and/or registered persons;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

6.1.6.solve disputes among the permit holders and/or between a permit holder and client within its powers;

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

6.1.7.approve the ethical rules of the Commission's employees and monitor their compliance;

6.1.8.set the minimum capital of insurance permit holders and the requirements of the capital of insurance permit holders;

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

6.1.9.monitor whether a permit holder or a registered person is implementing the Law on Anti-Money Laundering and Countering the Financing of Terrorism;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

/This sub-paragraph was added according to the law as of January 17, 2020/

6.1.10.monitor whether a permit holder or a registered person is implementing the Law on Proliferation of Weapons of Mass Destruction and Combating Terrorism;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

/This sub-paragraph was added according to the law as of January 17, 2020/

6.1.11.approve the regulation related to the requirements for significant shareholders, sources of share capital, executive management, employees and agents who are influential to the person stated in sub-paragraphs 4.1.2, 4.1.3, 4.1.4, 4.1.5, 4.1.6, 4.1.7, 4.1.8 and 4.1.10 of the Law on Anti-Money Laundering and Countering the Financing of Terrorism.

/This sub-paragraph was amended according to the law as of December 17, 2021/

6.1.12.co-approve, implement and monitor rules for the Regulatory Sandbox which regulate relations connected to creating regulatory sandbox environment for testing and introducing technology-based new financial products, services, and business models in a limited scope, and establishing related organizational units and councils in cooperation with the member of the Government in charge of financial and budgetary matters and the President of the Mongolbank.

/This sub-paragraph was added according to the law as of December 17, 2021/

/This sub-paragraph was added according to the law as of January 17, 2020/

6.2.In addition to the common powers stated in paragraph 6.1 of this law, the Commission shall exercise additional powers stipulated in the laws below:

6.2.1.in the field of non-banking financial activities provided by the Law on Non-Banking Financial Activities;

6.2.2.in the field of securities market participant's activities provided by the Law on Securities Market;

6.2.3.in the field of insurance activities provided by the Law on Insurance;

6.2.4.in the field of activities of the professionals in insurance provided by the Law on Professional Insurance Intermediaries; on activities related to the professionals in insurance defined in the Law on Professional Insurance Intermediaries;

6.2.5.in the field of deposits and loan activities defined in the Law on Cooperatives;

/This sub-paragraph was amended according to the law as of October 27, 2011/

6.2.6.in the field of issuance of asset-backed securities activities defined in the Law on Asset-backed Securities;

/This sub-paragraph was added according to the law as of April 23, 2010/

6.2.7.in the field of livestock insurance activities defined in the Law on Index-based Livestock Insurance;

/This sub-paragraph was added according to the law as of June 13, 2014/

6.2.8.in the field of activities of a virtual asset provider specified in the Law on Virtual Asset Service Providers.

/This sub-paragraph added according to the law as of December 17, 2021/

6.3.The Commission shall approve the following regulations, and instructions on regulation and supervision of activities, specified in sub-paragraphs 3.1.9. and 3.1.10. of this law:

/This paragraph was added according to the law as of January 17, 2020/

6.3.1.procedure for defining the conditions and requirements for granting permits and rights;

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

6.3.2.procedure for the registering a branch, representative, or representative office;

6.3.3.procedure for determining the amount of share capital;

6.3.4.procedure for on-site and off-site inspection;

6.3.5.procedure for determining the amount of regulatory service fees;

6.3.6.procedures and instructions for keeping accounting, and account registration forms;

6.3.7.procedure for defining the requirements for professional associations;

6.3.8.procedure for registration of legal counseling and audit services, at the Financial Regulatory Commission.

Article 7.The Commission's Meetings

7.1.The principal form of work of the Commission shall be its meetings.

7.2.The meetings of the Commission shall be convened at least once a month and the Commission shall define procedures of the meetings.

7.3.The Chairman of the Commission may call extraordinary meetings upon the written request of not less than two members of the Commission.

7.4.A meeting shall be considered as effective when a majority of the members are present.

7.5.The meetings of the Commission may be attended by professionals, or experts, by invitation.

7.6.The meetings of the Commission shall be evidenced by the minutes which shall be taken and signed by the all members present at the meeting.

7.7.If a family member or relative of a Commission member works for the legal entity whose issue is being discussed at the meeting of the Commission, the Commission member shall inform the other members about the situation prior to the meeting, and exclude him/herself from discussion and decision making process.

Article 8.Decisions of the Commission

8.1.The Commission shall pass decisions by a majority of the votes cast and the decision shall be signed by the Chairman of the Commission.

8.2.Within its powers, the Commission's decision shall be in the form of a resolution.

8.3.In the case of a tied vote, the Chairman shall make the final decision.

8.4.In issuing a publicly enforceable decision, the Commission may place the draft of the decision on its website or publish it in daily papers, and provide explanations to (and receive opinions about) it.

Article 9.Relations of the Commission with the State Great Khural

9.1.The Commission shall report to the State Great Khural on the implementation of this law, including the financial and organizational activities.

9.2.The State Great Khural shall monitor through relevant organizations whether the activities of the Commission are consistent with legislation.

Article 10.Relations of the Commission with the Mongolbank and the Government

10.1.The Commission shall conclude a trilateral memorandum of understanding (hereinafter referred to as the 'memorandum') with the Mongolbank and the state central administrative body in charge of financial matters in order to undertake effective collaborative activities toward ensuring the stability of the financial market, developing, regulating, and monitoring the financial market.

10.2.The memorandum shall state obligations of the Mongolbank, the state central administrative body in charge of financial matters, and the Commission to ensure the stability of financial market, information exchange, and other issues related to it.

10.3.Relations of the Commission with the Mongolbank and the state central administrative body in charge of financial matters shall be regulated in accordance with the provisions of the memorandum stipulated in paragraph 10.1 of this law.

10.4.The Chairman of the Commission may participate in an advisory capacity at the Cabinet's meetings on issues related to financial services.

10.5.The Commission shall submit its annual activity report to the Government and the Mongolbank respectively.

CHAPTER THREE

COMPOSITION OF THE COMMISSION AND ITS OFFICE

Article 11.Appointment of the Chairman and Members of the Commission

11.1.The Commission shall be comprised of a Chairman and six members.

11.2.The Chairman of the Commission shall be nominated by the Speaker of the State Great Khural, and two members shall be nominated by the Standing Committee on Economics of the State Great Khural, one member each shall be nominated by the Standing Committee on Justice and Budgetary matters, a member of the Government in charge of financial matters, and the President of the Mongolbank. The Chairman and six members of the Commission shall be appointed by the State Great Khural.

11.3.The Chairman and members proposed by the Standing Committees on Economics and Justice shall be full time members; and the remaining four members shall be part time members of the Commission.

11.4.A candidate proposed by the Standing Committee may be a representative of the private sector.

11.5.The following officials shall not be proposed as candidates:

11.5.1.a state political official;

11.5.2.a political party senior official;

11.5.3.a member of the Constitutional Court of Mongolia, judge and prosecutor of any instance;

11.5.4.an individual currently employed in a legal entity that renders financial services;

11.5.5.a holder of a controlling block of common shares in a legal entity that provides financial services.

11.6.The Chairman and members of the Commission shall be citizens of Mongolia, with higher education in economics, banking, finance, securities, or in law, with experience of not less than five years, and with no criminal record.

11.7.If the State Great Khural denies to appoint a candidate to the Commission, the authorized person stipulated in paragraph 11.2 shall propose another candidate within 14 working days.

11.8.The Chairman and members of the Commission shall be special category public servants. 

Article 12.Term of mandate of Chairman and Members of the Commission

12.1.The term of office for the Chairman and members of the Commission shall be five years and may be extended for one period only.

Article 13.Release of the Chairman and Members of the Commission

13.1.The State Great Khural shall release the Chairman and any member under the following circumstances:

13.1.1.termination of the term of office;

13.1.2.inability to perform his/her official duties due to health or other serious reasons;

13.1.3.at his/her own request for resigning;

13.1.4.if he/she is appointed or elected to positions stipulated in paragraph 11.5 of this law.

13.2.The Chairman and/or members of the Commission shall be released from their positions under the circumstances specified in paragraph 13.1 upon the proposal of the person or entity originally nominating that member.

Article 14.Grounds for removal of the Chairman or Members

14.1.The Chairman and/or member of the Commission shall be removed under the following circumstances:

14.1.1.in case of non-performance or unsatisfactory performance of duty, serious or repeated violation of duty;

14.1.2.if an authorized organization has suspended or revoked the right of rendering professional activities;

14.1.3.if he/she is convicted of a criminal offence by a court and the judgment has come into effect;

14.1.4.if violation of paragraph 11.5 of this law was discovered after his/her appointment.

14.2.The State Great Khural shall remove the Chairman or member upon the proposal of the person or entity that nominated that member for the reasons specified in sub-paragraph 14.4.1 of this law and on decisions of organizations stipulated in sub-paragraphs 14.1.2 and 14.1.3.

Article 15.Appointment to unexpired terms of the Chairman and Members of the Commission

15.1.In case the term of the Chairman or member has been terminated before the legally established period, the authorized authority specified in paragraph 11.2 shall nominate another candidate to the State Great Khural.

15.2.The term of office for the newly appointed member appointed according to paragraph 15.1 of this law shall be equal to the remaining term of the previous member. 

Article 16.Powers of the Chairman of the Commission

16.1.The Chairman of the Commission shall exercise the following powers:

16.1.1.represent the Commission in domestic and external relations;

16.1.2.represent the position of the Commission within its authority at the State Great Khural, the Government, and other relevant organizations with whom it has relations, and at the general session of the State Great Khural, the Standing Committees, and at meetings of the Government;

16.1.3.convene, preside over the Commission's meetings, and define the agenda of the meetings;

16.1.4.assign duties and responsibilities to members of the Commission and monitor their performance;

16.1.5.and other powers specified in this law.

16.2.During temporary absence of the Chairman of the Commission, the member appointed by the Chairman shall have the full authority of the Chairman.

16.3.In case of death, removal, or release of the Chairman according to Articles 13 and 14 of this law, his/her duty shall be performed by the full-time member who has the longest period of professional experience in the financial sector. 

Article 17.Guarantees for the Chairman and Members

17.1.It is prohibited to remove, or release the Chairman or member of the Commission except under the circumstances stipulated in Articles 13 and 14 of this law.

17.2.The State Great Khural shall determine the salary of the Chairman and the members. The procedure for determining remuneration for the non-staff members shall be regulated by the charter of the Commission.

Article 18.The Commission Secretariat

18.1.The Commission shall have its secretariat to assist the members to perform their duties, provide conditions for carrying out routine operations of the Commission, and to inform clients with relevant information.

18.2.The activities of the Secretariat shall be regulated by the rules of the Commission.

18.3.The Chief Executive of the Secretariat shall be the Commission's general manager with the duty to manage the daily activities of the Secretariat and ensure the fulfillment of the duties given by the Commission.

18.4.The governing and executive officers' positions of the Commission Secretariat shall belong to the category of public administrative officials. 

Article 19.Confidentiality of internal information

19.1.It is prohibited for the members and Secretariat's staff to distribute, share with others, or use for their own purpose information that is defined by the Commission as for internal use only, except as described in paragraph 19.3 of this law.

19.2.The Commission members and its Secretariat's staff may provide internal information to others as defined in paragraph 19.1 according to the Commission's procedures in the following cases:

19.2.1.if this law, other relevant legislation, or international treaty to which Mongolia is a party allows supply of confidential information;

19.2.2.if the Mongolbank requests;

19.2.3.if the state central administrative body in charge of financial matters requests;

19.2.4.if the court, prosecutor's office, police department, or the court decision enforcement agency requests the information in writing due to their work requirements.

CHAPTER FOUR

FINANCING AND ACCOUNTING OF THE COMMISSION

Article 20.Financing the Commission

20.1.The Commission's finance sources shall be the following:

20.1.1.assets allocated from the state budget;

20.1.2.regulatory service fees generated from the permit holders; and

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

 20.1.3.other income from activities carried out in compliance with this law.

Article 21.Accounting and auditing

21.1.The Commission shall maintain accounting records, and prepare financial reports, and the year-end report shall be certified by an auditor according to the relevant laws.

CHAPTER FIVE

THE PERMIT OF RENDERING FINANCIAL SERVICES

 /The word "license" stated in the title of this chapter was changed to "permit" according to the law as of june 17, 2022, and this change shall enter into force from the date of January 1, 2023./

Article 22.Granting a permit

/The word "license" stated in the title of this article was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

22.1.The Commission shall issue a permit for rendering the financial services stipulated in paragraph 3.1 of this law.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023./

22.2.In issuing a permit to a subsidiary of a company that has under its structure a bank, the opinion of the Mongolbank shall be considered.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

/This paragraph was amended according to the law as of January 18, 2018/

22.3.If a permit was issued to a legal entity stipulated in paragraph 22.2 of this law, the monitoring of the activities shall be conducted in cooperation with the Mongolbank.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

22.4.The Commission may require and study the charter, financial and activity reports of the headquarter company of an entity that is applying for a permit.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

22.5.The procedures for issuing permits to conduct financial services that are not regulated by this law shall be governed by the Law on Permits, Articles 8 and 9 of the Law on Non-bank Financial Activities, Articles 14, 15, and 52 of the Law on Savings and Credit Cooperatives, Article 20 of the Law on the Securities, Articles 18, 19, 20, 69, and 70 of the Law on Insurance, and Articles 8, 9, 10, 11, 12, 38, and 39 of the Law on Professional Insurance Intermediaries.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

/The words "on Licensing" specified in this paragraph was changed to "on Permits" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

Article 23.Records

23.1.The Commission shall keep a record of permits and authorizations issued by the Commission.

23.2.The Commission shall endorse a procedure for keeping the records stipulated in paragraph 23.1 of this law.

23.3.A permit holder shall notify the Commission in writing about ceasing to perform activities within five working days.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

CHAPTER SIX

MONITORING ACTIVITIES OF THE COMMISSION

 Article 24.Monitoring the activities of permit holders and registered persons

/The title of this article was amended according to the law as of December 17, 2021/

/The word "license" stated in the title of this article was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

24.1.The Commission shall monitor and control permit holders' and registered persons' activities to ensure compliance with this law, relevant legislation, rules, and procedures issued in conformity therewith.

/Addendum was made to this paragraph according to the law December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

24.2.The monitoring and control defined in paragraph 24.1 shall be conducted by an inspector appointed by the Chairman of the Commission.

24.3.The Commission inspector shall have the right of a state inspector.

24.4.If the Commission believes that a permit holder or a registered person is violating this law, or relevant legislation, rules and procedures that are in conformity with them, the inspection may be conducted at any time.

/Addendum was made to this paragraph according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

24.5.The Commission inspector shall exercise control within his/her power stipulated in this law, in paragraphs 19.1, 19.2 and 19.3 of the Law on Non-bank Financial Activities, in paragraphs 37.1 and 37.2 of the Law on Securities' Market, in provisions of Articles 61, 62, 63, 64, and 65 of the Law on Insurance, and in the provisions of Articles 30, 31, 32, 33, and 34 of the Law on Professional Insurance Intermediaries. 

Article 25.Powers of the Inspector

25.1.An inspector shall exercise the following powers:

25.1.1.enter an office or any premises where the permit holder or the registered person conducts his/her activities during working time;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

25.1.2.obtain information, explanations, specifications and other documents necessary for the examination free of charge from relevant authorities and officials;

25.1.3.review relevant documents and have copies;

25.1.4.question any matter related to the inspection and get answers on it

25.1.5.impose duties to eliminate violations found during the inspection and to ensure their fulfillment;

25.1.6.suspend activities of the permit holder or the registered person, in whole or part, in accordance with the procedure stated in the Law on Violations Examination and Resolution Proceedings;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

/Addendum was made to this sub-paragraph according to the law as of May 18, 2017/

25.1.7.impose administrative sanctions in compliance with the relevant legislation;

25.1.8.submit a proposal to the Commission to revoke a permit if the permit holder has seriously and/or repeatedly violated the legislation;

/This sub-paragraph was revised according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

25.1.9.transfer the relevant documents to authorities if violations that were revealed during inspection are criminal offences;

25.1.10.and other powers stipulated in the legislation.

25.2.An inspector shall conduct the inspection based on the Commission's directions, and shall inform the permit holder about it prior to conducting the inspection.

/This paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

25.3.The inspection shall be conducted within the period of time stated by the Commission in a way that does not hinder the daily activities of the related person.

Article 26.Inspection report

26.1.Report of inspection shall include the following:

26.1.1.a conclusion on the permit holder's or registered person's management, organization, and monitoring of activities, and other issues deemed necessary;

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

26.1.2.demanding a response from the permit holder or registered person in connection with the report, and highlighted issues if no response is requested.

/This sub-paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this sub-paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

26.2.The Commission shall deliver the results of the inspection to the permit holder or the registered person within 45 working days after completion of the inspection.

/This paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

26.3.If a permit holder or a registered person has to respond to the report of the inspection, he/she is obliged to respond to it within 14 working days from receipt of the report, or within the time defined by the Commission.

/Addendum was made to this paragraph according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023./

Article 27.The Commission's power to request information

27.1.The Commission or authorized person of the Commission may request in writing certain or specific types of information, financial and other documents from a permit holder or a registered person.

/This paragraph was amended according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

27.2.If a permit holder or a registered person is a member of any business corporation, the Commission may require the financial report of the corporation, or any other entity that is under the corporation.

/Addendum was made to this paragraph according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

27.3.A permit holder or a registered person shall provide requested information from the Commission within a period that in compliance with paragraphs 27.1 and 27.2 of this law.

/Addendum was made to this paragraph according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

CHAPTER SEVEN

SUPERVISING BOARD

Article 28.Supervising Board

28.1.The Supervising Board is a part time body of the Commission (hereinafter referred to as the 'Supervising Board') that shall monitor the activities of the Commission, and shall respond to any complaints about the decisions made by the Commission.

28.2.The procedures of the Supervising Board shall be endorsed by the State Great Khural.

28.3.The Supervising Board shall report its activities to the State Great Khural within the first quarter of the next year.

Article 29.Members of the Supervising Board

29.1.The Supervising Board shall consist of the Chairman and four members.

29.2.The Chairman and members of the Supervising Board shall be appointed for the term of three years by the State Great Khural, and they shall be released by a decision of the State Great Khural.

29.3.The Chairman shall be nominated at the proposal of the Standing Committee on Economics of the State Great Khural. The Standing Committee on Economics and Justice of the State Great Khural each shall nominate two candidates for membership of the Supervising Board.

29.4.A citizen of Mongolia with higher education and experience in economics, banking, finance, securities and law may be appointed as the Chairman or a member of the Supervising Board.

29.5.It is prohibited for political officials, political party's senior officers, members of the Constitutional Court of Mongolia, judges and prosecutors in all instances, chairman of the Commission, its member, or governing and executive officers to be appointed as the Chairman and/or member of the Supervising Board.

29.6.The Chairman of the Supervising Board and members shall be released prior to expiry of the term of office in the following circumstances:

29.6.1.inability to perform official duty due to health and other good cause, or at his/her own request;

29.6.2.unsatisfactory performance of official duty;

29.6.3.the court has determined that he/she has committed a crime, and the court's sentencing decision has entered into force;

29.6.4.issues of conflicts of interest.

29.7. It is prohibited to release the Chairman and/or member of the Supervising Board prior to term of office except as provided in paragraph 29.6 of this law.

Article 30.Office of the Supervising Board

30.1.The office of the Supervising Board shall be responsible for ensuring the preparation of the Commission's meeting, assisting members to perform their official duties, and ensuring enforcement of decisions issued in meetings.

Article 31.Remuneration of the Chairman and Members of the Supervising Board

31.1.The remuneration of the Chairman and members shall be regulated by the procedure stipulated in paragraph 28.2 of this law.

Article 32.Decisions of Supervising Board

32.1.Until the decision of the Supervising Board is issued, the enforcement of the Commission decision may be suspended.

32.2.The Commission is obliged to follow decisions of the Supervising Board that are in conformity with this law.

32.3.Decisions of the Supervising Board shall be in the form of a resolution.

32.4.If a person does not agree with a decision made by the Supervising Board within its powers, he/she may submit an appeal to the court.

CHAPTER EIGHT

DISPUTE RESOLUTION

Article 33.Dispute Resolution

33.1.Within the scope of its powers, the Commission shall preliminarily decide disputes between permit holders or between a permit holder and a client.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

33.2.If a permit holder or a client disagrees with the decision of the Commission, he/she may submit an appeal to the court.

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

CHAPTER NINE

MISCELLANEOUS

Article 34.Report suspicious transactions

34.1.Financial service providers shall immediately report to the Commission any transactions that they believe it may be related to money laundering or terrorist financing.

34.2.The Commission shall review the information submitted in accordance with paragraph 34.1 of this Law and, if deemed necessary, shall take measures to be investigated by an authorized body.

/Article 34 was invalidated according to the law as of July 8, 2006/ 

Article 35.Taking measures against money laundering and terrorist financing

35.1.The Commission may issue regulations defining requirements and prohibitions regarding policies and measures against money laundering and terrorist financing.

/Article 35 was invalidated according to the law as of July 8, 2006/

Article 36.Implement the Law on Anti-Money Laundering and Countering the Financing of Terrorism

36.1.The permit holder of special financial services shall be obliged to adhere to the Law on Anti-Money Laundering and Countering Financing of Terrorism.

/Addendum was made to this paragraph according to the law as of December 17, 2021/

/The word "license" stated in this paragraph was changed to "permit" according to the law as of June 17, 2022, and this change shall enter into force from the date of January 1, 2023/

/This article was amended according to the law as of July 8, 2006/

Article 37.Liability for Breach of the Law on the Legal Status of the Financial Regulatory Commission

37.1.Any person who breaches the Law on the Legal Status of the Financial Regulatory Commission shall be liable to sanctions stipulated in respective legislations.

CHAIRMAN OF THE STATE GREAT KHURAL OF MONGOLIA TS.NYAMDORJ