MASD Securities Market Specialist Authorization Exam (Мэргэжилтний эрх олгох шалгалт, Mongolia)

Under Article 1 of the Law of Mongolia on the Securities Market (Үнэт цаасны зах зээлийн тухай хууль), what is the stated purpose of the law?

• ATo regulate relations connected with regulating and supervising the activities of securit…
• BTo regulate the issuance of Government debt instruments and the management of public debt
• CTo regulate the licensing, capital and supervision of commercial banks
• DTo regulate in detail the formation and legal status of investment funds

Under Article 62 of the Securities Market Law, which body carries out state regulation and supervision of Mongolia's securities market?

• AThe Financial Regulatory Commission (Санхүүгийн зохицуулах хороо, FRC)
• BThe Bank of Mongolia (Монголбанк)
• CThe Ministry of Finance
• DThe Mongolian Stock Exchange

Article 5 of the Securities Market Law lists the instruments treated as securities and those excluded. Which of the following is excluded from the law's coverage unless another law provides otherwise?

• ADebt instruments issued by the Government or by aimag and capital-city governors
• BShares or unit rights of an investment fund
• CShares of a limited liability company (ХХК)
• DDepository receipts (хадгаламжийн бичиг)

Under Article 35.1 of the Securities Market Law, where must a professional who works for a legal entity conducting regulated securities activities obtain their authorization (эрх)?

• AFrom the Mongolian Stock Exchange's listing department
• BDirectly from the Ministry of Finance after a background check
• CFrom the Bank of Mongolia's licensing department
• DFrom the professional association referred to in Article 69.2 of the law

Under MASD's current regulation on qualification selection and specialist authorization, for how long is a first-time specialist authorization granted?

• A1 year
• B3 years
• C4 years
• DIndefinitely, with no renewal

MASD runs separate authorization tracks for Specialist (мэргэжилтэн), Investment (хөрөнгө оруулалт) and Executive management (гүйцэтгэх удирдлага). A candidate will work as a securities dealer trading the firm's own capital. Which authorization should they seek?

• ASpecialist authorization, because dealers trade on the exchange
• BExecutive management authorization, because dealers commit the firm's own capital
• CInvestment authorization, which covers staff of entities conducting the activities in Art…
• DNo authorization, because dealing requires only a firm-level license

Under Articles 35.5–35.8 of the Securities Market Law, how is the Qualification Council (Мэргэшлийн зөвлөл) that runs the qualification selection composed?

• AFive members, all appointed by MASD
• BSeven members, a majority of whom must be exchange employees
• CNine members, at least one-third of whom represent the FRC
• DEleven members nominated only by universities

After signing a brokerage contract, a securities company discovers a conflict of interest in serving the client. Under Articles 36.6–36.7 of the Securities Market Law, what must it do, and who bears resulting losses?

• ANothing until the next annual report; the client bears any losses
• BEnd the contract without notice; MASD compensates the client
• CNotify only the FRC; losses are shared equally with the client
• DNotify the client immediately; if it does not, the company must compensate the client's p…

A specialist first authorized in June 2026 attends at least 5 hours of continuing training every year and passes the renewal exam before the authorization expires. Under MASD's current qualification regulation, for how long is the authorization renewed?

• A3 years
• B4 years
• C6 years
• DIndefinitely

FRC Resolution 383 of 2023 requires every regulated entity other than a custodian to set up an operational risk protection fund of at least 3% of its paid-in capital. A securities company has paid-in capital of 120,000,000 MNT. What is the minimum size of the fund?

• A2,400,000 MNT
• B3,000,000 MNT
• C3,600,000 MNT
• D4,800,000 MNT

Under FRC Resolution 383 of 2023, which additional condition must a legal entity meet before it can be licensed for securities dealing (дилерийн үйл ажиллагаа)?

• AIt must have conducted securities brokerage for one year
• BIt must first have held an underwriting license for two years
• CIt must be at least 50% owned by a commercial bank
• DIt must have listed its own shares on the Mongolian Stock Exchange

FRC Resolution 383 of 2023 sets conditions for the executives and specialists of regulated securities entities. Which of the following would breach those conditions?

• AA broker specialist holding a bachelor's degree in economics
• BA specialist who owns 6% of another regulated securities company
• CA specialist covered by professional liability insurance
• DA specialist who holds a valid Article 35 authorization matching their job

Under Article 69 of the Securities Market Law, which statement about self-regulatory organizations (өөрийгөө зохицуулах байгууллага) is correct?

• AOnly the FRC itself may act as a self-regulatory organization
• BMembership of a self-regulatory organization is voluntary for all licensed entities
• CSelf-regulatory organizations may grant special licenses for brokerage
• DA regulated entity holding a special license must be a member of a self-regulatory organi…

Under Article 30 of the Securities Market Law, which situation requires the FRC to revoke a regulated entity's special license?

• AThe entity has increased its paid-in capital
• BThe entity opened a new branch after notifying the FRC
• CThe entity has not conducted the licensed activity for one year
• DThe entity changed its external auditor

Under FRC Resolution 383 of 2023, which circumstance disqualifies a person from serving as a board member, executive or specialist of a regulated securities entity?

• AHolding a degree in law rather than finance
• BHaving borne criminal liability for a corruption or economic crime
• CHaving previously worked at the Mongolian Stock Exchange
• DOwning 2% of a listed company's shares

A securities company disagrees with an FRC decision suspending its license under Article 29 of the Securities Market Law. Under Article 34.1, where and within what period may it first file a complaint?

• AWith the Review Council (Хяналтын зөвлөл) attached to the FRC, within 14 days of the deci…
• BWith MASD's ethics committee, within 30 days
• CWith the Constitutional Court, within 60 days
• DWith the Mongolian Stock Exchange's board, within 7 days

How do Articles 36.1 and 37.1 of the Securities Market Law distinguish brokerage from dealing?

• AA broker trades in its own name with its own assets; a dealer acts only on client instruc…
• BThere is no legal difference; both terms describe the same license
• CA broker may trade only government bonds; a dealer may trade only shares
• DA broker provides contract-based intermediary services with the client's assets, on the c…

A newly incorporated company with no securities license wants to start underwriting IPOs straight away. Under Article 41.2 of the Securities Market Law and FRC Resolution 383, what is the correct assessment?

• AIt can apply at once if it employs three specialists
• BIt can qualify if it deposits a guarantee with the exchange
• CIt cannot yet qualify: an underwriting license may be issued only to a brokerage or deali…
• DIt needs only MASD membership to begin underwriting

Under Article 9.1 of the Securities Market Law, what must happen before an issuer's securities can be offered to the public in the primary market?

• AThe FRC registers the securities and grants permission to offer them in the primary market
• BThe issuer's main commercial bank approves the offering
• CMASD publishes a credit rating of the issuer
• DThe Ministry of Finance guarantees the securities

Which item must be included in a securities prospectus (үнэт цаасны танилцуулга) under Article 10.5 of the Securities Market Law?

• AA promise of a minimum annual return to investors
• BThe FRC's recommendation to buy the securities
• CThe personal tax returns of every employee
• DThe issuer's financial statements with the audit opinion, and the risks it faces with a r…

Article 41.4 of the Securities Market Law lists the forms of underwriting service. Under which form does the issuer, rather than the underwriter, keep the risk of unsold securities?

• AThe underwriter buys all the securities the issuer offers to the public
• BThe underwriter makes every necessary effort to sell the securities by presenting them to…
• CThe underwriter buys the whole unsold portion after the public offering
• DThe underwriter guarantees to buy the securities at an agreed price if investors do not

Investors lose money after buying shares in reliance on a misleading prospectus that the FRC had registered. Under Article 9 of the Securities Market Law, which statement is correct?

• AThe FRC must compensate investors because its registration approved the securities
• BNo one is liable because investors bear all risk once a prospectus is registered
• COnly the stock exchange is liable because it admitted the shares to trading
• DThe issuer and the authorized officials who made the decision are jointly liable, and tho…

During the six months after its prospectus is registered, an issuer undergoes a change that could influence investors' decisions. What does Article 10 of the Securities Market Law require?

• AThe issuer may amend the registered prospectus freely without telling anyone
• BThe issuer must cancel the offering and wait one year before reapplying
• CThe issuer must notify the FRC and add the change to the prospectus; amending registered…
• DThe issuer need only mention the change in its next annual report

A limited liability company (ХХК) wants to raise money by publicly offering its shares to hundreds of retail investors. What does the Securities Market Law say?

• AIt may do so after registering a prospectus with the FRC
• BIt may do so only through an underwriter
• CPublic offering of limited liability company shares is prohibited
• DIt may do so only on the OTC market

Under Article 62.1 of the Company Law of Mongolia (Компанийн тухай хууль), which decision can be made only by the shareholders' meeting (хувьцаа эзэмшигчдийн хурал)?

• AAppointing the company's chief accountant
• BSetting the daily trading limits of the company's treasury desk
• CApproving routine supply contracts
• DAmending the company charter and electing board members

A joint-stock company's charter provides for a nine-member board of directors (ТУЗ). Under Article 75.4 of the Company Law, what is the minimum number of independent members?

• A1
• B2
• C3
• D5

Under Article 87.1.1 of the Company Law, when is a transaction involving company property classed as a major transaction (их хэмжээний хэлцэл)?

• AWhen the property's market value exceeds 25% of total assets on the latest balance sheet…
• BWhen the transaction exceeds 1 billion MNT regardless of company size
• CWhen the counterparty is a foreign company
• DWhen the contract term exceeds one year

A joint-stock company has total assets of 40 billion MNT on its latest balance sheet. Outside its ordinary business, it plans to buy a building for 12 billion MNT. Eight of its nine directors vote in favour and one votes against. Under Articles 87–88 of the Company Law, what happens?

• AThe transaction is approved because a majority of the board voted for it
• BIt is a major transaction (30% of assets); because the board was not unanimous, it goes t…
• CIt is not a major transaction because it is below 50% of assets
• DThe chief executive may approve it alone because it involves real estate

A board member owns the supplier with which the company plans to sign a large contract. Under Articles 91–92 of the Company Law, how must the decision be made?

• AThe interested director votes like any other director
• BThe contract is automatically void and cannot be approved
• CThe interested director decides alone because they know the supplier best
• DThe interested director must disclose the interest and may not take part in the decision;…

What does the preemptive right (тэргүүн ээлжид худалдан авах эрх) in Article 38 of the Company Law give a holder of common shares?

• AThe right to buy additional common shares issued by the company, in proportion to their e…
• BThe right to force the company to buy back shares whenever the price falls
• CThe right to veto any election of board members
• DThe right to receive dividends before preferred shareholders

Under Article 53.1 of the Company Law, which shareholder may demand that the company buy back their shares?

• AA shareholder who voted against, or did not vote on, a shareholders' meeting decision app…
• BAny shareholder whose shares have fallen in value by more than 10%
• CA shareholder who missed a dividend payment date
• DA shareholder who wants to exit before a board election

Joint-stock company boards are elected by cumulative voting (Company Law Art. 77.4). A shareholder holds 10,000 voting shares, and 5 ordinary board seats are being filled. How many votes do they have, and how may they be used?

• A10,000 votes, which must be split equally among five candidates
• B50,000 votes, which may all go to one candidate or be divided among several
• C5,000 votes, because cumulative voting halves voting power
• D100,000 votes, because each share carries ten votes in board elections

An investor, together with affiliated persons, acquires one-third of a joint-stock company's common shares. What does Article 57.1 of the Company Law require?

• ANothing further, because only holdings above 50% trigger obligations
• BWithin 60 working days, an offer to buy the other shareholders' shares at no less than th…
• CA sale of the shares back to the company within 30 days
• DPrior approval of the acquisition by the Bank of Mongolia

Under Article 20.1.8 of the Securities Market Law, what must an issuer do after its shareholders' meeting adopts decisions?

• AKeep the decisions confidential until the next annual report
• BPublish the decisions only if the share price moves by more than 10%
• CSend the decisions only to MASD within 30 days
• DDisclose the decisions to the public immediately and send the related documents to the FR…

How does Article 4.1.28 of the Securities Market Law define a stock exchange (хөрөнгийн бирж)?

• AA legal entity holding a special license to conduct the securities trading activity
• BA department of the FRC that sets share prices
• CThe central depository that records share ownership
• DAny broker that matches its clients' orders internally

Under Article 48.1 of the Securities Market Law, who participates directly in the trading organized by a securities trading organization?

• AAny retail investor with a bank account
• BOnly commercial banks
• CBrokers, dealers and underwriters registered as the law requires
• DOnly the issuers of the listed securities

A client instructs a broker to buy shares with a limit order at 2,000 MNT. What does this instruction mean?

• ABuy immediately at whatever price is available
• BBuy only at 2,000 MNT or lower
• CBuy only at 2,000 MNT or higher
• DOnce the price rises above 2,000 MNT, buy at the market price

Under Article 23.2 of the Mongolian Stock Exchange Trading Rules, how are price bands applied to orders in the regular order book?

• AThere are no price bands; prices move freely
• BThe band is no more than 15% from the previous trading day's closing price, and an incomi…
• CThe band is 50% from the opening price, and orders outside it are queued for the next day
• DThe FRC sets a separate daily band for each broker

How are block trades handled under Articles 28–36 of the Mongolian Stock Exchange Trading Rules?

• AThey are negotiated off the exchange, entered by both sides with the contra firm's ID int…
• BThey must be split into single-lot orders in the regular order book
• CThey are prohibited for listed shares
• DThey are executed automatically at the day's closing price

How does Article 4.1 of the Securities Market Law distinguish the exchange market (биржийн зах зээл) from the over-the-counter market (биржийн бус зах зээл)?

• AThe exchange market covers trading of securities registered with a securities trading org…
• BThe exchange market is for bonds only and the OTC market for shares only
• CThe OTC market is an informal market outside the law
• DThe law gives no definitions, and the terms are used interchangeably

Which group is listed as professional investors (мэргэжлийн хөрөнгө оруулагч) under Article 4.1.19 of the Securities Market Law?

• AAny individual who has held a brokerage account for a year
• BEvery shareholder of a listed company
• CBanks, investment funds, pension funds, insurers, underwriters, dealers and licensed inve…
• DUniversity students studying finance

Which statement about the central securities depository (үнэт цаасны төвлөрсөн хадгаламж) is correct under Article 45 of the Securities Market Law?

• ASeveral competing companies may each hold a central depository license
• BThe law makes the depository a department of the Mongolian Stock Exchange
• CThe depository may use clients' securities to meet its own debts
• DThe license may be granted to only one legal entity, and the depository may not dispose o…

Under Article 44 of the Securities Market Law, by when must securities settlement be completed, and when does ownership pass?

• AWithin three working days after the trade; ownership passes when the securities are trans…
• BWithin ten working days; ownership passes when the broker sends a confirmation
• COn the trade date only; ownership passes when the order is entered
• DWithin 30 days; ownership passes when the issuer updates its own register

Under Article 43 of the Securities Market Law, what does a clearing organization do, and what is its settlement guarantee fund made up of?

• AIt lists securities for trading; the fund comes from issuers' listing fees
• BIt audits brokers' accounts; the fund comes from FRC fines
• CIt gives investment advice to clients; the fund comes from the state budget
• DIt performs obligations as seller to the buyer and buyer to the seller, determines obliga…

What does the delivery-versus-payment (DvP) principle reflected in Article 44.1.1 of the Securities Market Law require?

• AThe securities transfer and the money payment for a trade are carried out simultaneously
• BThe seller delivers the securities first and the buyer pays within a month
• CThe buyer pays first and receives the securities when the seller chooses
• DSecurities move between brokers free of payment

Article 36.15 of the Securities Market Law lets a broker lend to a client for buying securities under their contract. A client deposits 10,000,000 MNT and the contract sets a 50% initial margin. What is the maximum value of shares the client can buy?

• A10,000,000 MNT
• B15,000,000 MNT
• C20,000,000 MNT
• D30,000,000 MNT

A client's margin account equity falls below the maintenance margin set in the brokerage contract. What is a margin call?

• AThe broker's demand that the client deposit more cash or collateral, failing which positi…
• BAn automatic cancellation of all the client's orders on the exchange
• CA notice that the broker must pay the client compensation
• DA regulatory fine imposed on the client by the FRC