Mongolia Securities Market Specialist Exam key terms

Mongolia’s unified financial regulator, responsible for licensing and supervising securities market participants, approving public offerings, and enforcing securities laws and investor protection rules.

Mongolian statute that sets the legal framework for issuing, offering, trading, clearing, and settling securities, and defines the powers of the Financial Regulatory Commission over market participants.

A formal disclosure document that an issuer publishes before a public offering, describing the business, risks, financial condition, use of proceeds, and terms of the securities being offered.

A sale of securities to the general public or a broad investor base that requires regulatory approval or registration and full prospectus disclosure under securities law.

A sale of securities to a limited number of selected investors, typically exempt from full public offering registration and prospectus requirements but subject to resale restrictions.

The part of the securities market where an issuer sells newly created securities to investors, raising capital that goes directly to the issuer rather than to a selling shareholder.

The marketplace where investors buy and sell securities that have already been issued, providing liquidity and price discovery without raising new capital for the issuer.

Mongolia’s licensed securities exchange, operating trading platforms for equities, bonds, and other listed instruments and setting listing, trading, and market surveillance rules.

An entity that holds securities in electronic book-entry form, maintains investor and participant accounts, and supports clearing and settlement of trades; in Mongolia this role is performed by the MSCHCD.

The conversion of physical securities certificates into electronic book-entry records held at a central depository, enabling faster transfer and reducing loss, theft, and paperwork risk.

The post-trade process of confirming trade details, netting obligations, and calculating the securities and cash amounts each participant must deliver on settlement date.

The final transfer of securities from seller to buyer and of cash from buyer to seller, completing a trade and discharging the parties’ obligations.

A settlement mechanism in which the transfer of securities occurs only if the corresponding cash payment occurs at the same time, reducing principal risk for both parties.

A clearing entity that becomes the buyer to every seller and the seller to every buyer, guaranteeing performance and managing counterparty credit risk through margin and default funds.

The safekeeping and administration of securities on behalf of clients, including holding assets, processing corporate actions, and maintaining accurate ownership records.

An order to buy or sell a security at a specified price or better, giving the investor price control but no guarantee that the order will be executed.

An order to buy or sell a security immediately at the best price currently available, prioritizing execution certainty over price certainty.

A rule that restricts how far a security’s price may rise or fall during a trading session, intended to curb excessive volatility and protect investors from sharp price swings.

A trading participant that continuously quotes bid and ask prices for designated securities, committing capital to provide liquidity and facilitate orderly trading.

Buying or selling securities while in possession of material nonpublic information, or communicating that information to others, in breach of a duty of trust or confidence.

Conduct intended to deceive investors or distort the price or volume of a security, such as false trades, spoofing, or spreading misleading information.

The duty of issuers and market participants to publish material information accurately and promptly so investors can make informed decisions and markets remain fair and transparent.

A transaction between a company and a director, senior manager, major shareholder, or close affiliate, which requires special review because of potential conflicts of interest.

The framework of rules, practices, and processes by which a company is directed and controlled, including board responsibilities, shareholder rights, and accountability to stakeholders.

The process by which a financial firm identifies and verifies its clients’ identities, understands their business, and assesses money-laundering and terrorist-financing risk before and during the relationship.

A set of laws, regulations, and procedures requiring financial institutions to detect, report, and prevent the laundering of criminal proceeds and the financing of terrorism.

The requirement that an investment recommendation or transaction be appropriate for a client’s financial situation, investment objectives, risk tolerance, and experience.

A legal obligation to act in the best interests of a client or beneficiary, placing the client’s interests ahead of the adviser’s own and avoiding undisclosed conflicts.

A situation in which a person or firm has competing professional or personal interests that could improperly influence decisions or advice given to clients.

A pooled investment vehicle that collects money from many investors and invests it in a portfolio of securities according to a defined strategy, governed by fund rules and regulators.

The process of dividing a portfolio among asset classes such as equities, bonds, and cash, based on the investor’s objectives, risk tolerance, and time horizon.

Spreading investments across different assets, sectors, or regions so that poor performance in one holding has less impact on the overall portfolio.

An investor’s willingness and financial ability to accept investment losses or volatility in pursuit of return, a key input for portfolio construction and suitability assessments.

The annualized return an investor would earn by buying a bond at its current price and holding it to maturity, assuming all coupons are reinvested at the same rate.

A measure of a bond’s sensitivity to interest-rate changes, approximately the weighted average time until its cash flows are received; longer duration means greater price volatility.

An independent opinion about an issuer’s or debt security’s ability to meet financial obligations, expressed on a letter scale and used by investors to assess default risk.

A valuation method that estimates an asset’s worth by projecting future cash flows and discounting them to present value using a rate reflecting risk and time value.

A valuation multiple calculated as a company’s share price divided by its earnings per share, showing how much investors pay for each unit of current earnings.

The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.

International Financial Reporting Standards, a globally used set of accounting rules that prescribe how transactions and balances are recognized, measured, and disclosed in financial statements.