Mongolia Securities Market Specialist Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Financial Regulatory Commission

Mongolia's integrated financial regulator, licensing and supervising securities firms, exchanges, central depository and investment funds, with investor-protection, market-integrity and disclosure objectives.

Prospectus

Disclosure document giving investors the information needed for an informed investment decision; a public offer requires regulatory registration or approval before the document is distributed.

Insider dealing

Trading on material non-public information about an issuer or its securities, or tipping others who trade; prohibited as market abuse and subject to civil and criminal sanctions.

Licensed securities intermediary

A firm authorised by the regulator to deal, broker, underwrite or advise in securities; it must meet minimum capital, conduct-of-business and reporting requirements.

Initial public offering

First sale of shares to the public, typically combining due diligence, a prospectus, regulatory approval, exchange listing and bookbuilding or auction before trading begins.

Preference shares

Equity claims that usually rank before ordinary shares for dividends and liquidation proceeds but normally carry limited or no voting rights; terms are set in the charter.

Corporate bond

Debt obligation of a company paying coupons and principal; a public issuance usually requires a prospectus, regulatory registration and exchange listing for trading.

Rights issue

Offer of new shares to existing holders, normally pro rata and often at a discount, with subscription rights that may be tradable and that protect holders against dilution.

Price-time priority

Matching rule that fills the best-priced order first and, where prices are equal, fills the order that arrived earliest on the order book.

Bid-ask spread

Difference between the highest bid and lowest ask; a transaction-cost and liquidity measure quoted in absolute terms or as a percentage of the midpoint.

Market order

Instruction to trade immediately at the best available price; execution is assured but price is not, so thin order books create slippage risk.

Trading halt

Temporary suspension of trading in a security or the whole market, triggered by pending news, order imbalance or unusual price movements, to preserve fair and orderly markets.

Central counterparty

Entity that interposes itself between trade counterparties by novation, becoming buyer to every seller and seller to every buyer, and collecting margin to cover exposure.

Delivery versus payment

Settlement mechanism linking securities transfer and cash payment so that delivery happens only if payment happens, removing principal risk from the transaction.

Dematerialisation

Replacement of physical certificates with electronic book-entry records at a central depository, enabling faster transfer and reducing loss, theft and forgery risk.

Settlement cycle

Period between trade date and settlement date; Mongolian equity trades typically settle on a T+2 cycle through the central depository, with fails subject to buy-in rules.

Discounted cash flow

Valuation method that discounts projected free cash flows at an appropriate rate, adds a terminal value, and estimates the present value of the asset.

Weighted average cost of capital

Blended required return on a firm's debt and equity, weighted by market values, with interest adjusted for tax; used to discount unlevered free cash flows.

Gordon growth model

Values a share as next year's dividend divided by the required return minus constant growth; it assumes growth stays below the required return.

Duration

Weighted average time to receive a bond's cash flows and a first-order measure of price sensitivity to yield; modified duration approximates percentage price change per yield change.

Efficient frontier

Set of portfolios offering the highest expected return for each level of risk; portfolios below the frontier are dominated in mean-variance terms.

Sharpe ratio

Excess return over the risk-free rate divided by standard deviation; it measures total risk-adjusted performance and suits fully diversified portfolios.

Strategic asset allocation

Long-term target mix of asset classes set from objectives, liabilities, risk tolerance and capital market assumptions, implemented with ranges and rebalancing rules.

Rebalancing

Restoring portfolio weights to their targets, either on a calendar schedule or when weights breach pre-set thresholds; it controls risk drift at the cost of trading.

Value at Risk

Estimate of the maximum loss over a defined horizon at a given confidence level; it says nothing about the size of losses beyond that threshold.

Expected shortfall

Average loss in the worst outcomes beyond the VaR threshold; a coherent, tail-sensitive risk measure that captures tail risk better than VaR.

Suspicious transaction report

Filing by a regulated institution to the financial intelligence unit when transactions appear linked to money laundering or terrorist financing; tipping off the client is prohibited.

Material non-public information

Information that could affect security prices and has not been made public; trading on it or tipping others breaches fair-dealing and insider-trading rules.

Conflicts of interest

Situations where personal or firm interests could bias advice or dealing; they must be identified, avoided where possible, or disclosed and managed under policy.

Fiduciary duty

Obligation to act in the client's best interest with loyalty, care and prudence, placing client interests ahead of the firm's own interests.

IFRS 9 expected credit loss

Impairment model recognising expected credit losses from probability of default, loss given default and exposure, using forward-looking information rather than waiting for incurred losses.

Control model IFRS 10

Consolidation is required when the investor has power over the investee, exposure to variable returns, and the ability to use that power to affect returns.