A. BACKGROUND

Mongolia has received credit from the International Development Association (IDA) for the implementation of the Strengthening Fiscal and Financial Stability (SFFS) project. The Financial Regulatory Commission (FRC) is a beneficiary of the Project and is implementing activities under sub-component #C4. The main objective of the Sub-component is to strengthen the institutional capacity of the FRC. 

Although over 30 years have passed since the establishment of the capital market in Mongolia, its level of development is weak; akin to a ‘frontier market’ compared to regional financial markets.  This undermines intermediation in the financial sector and hampers the development of opportunities to attract funding for long-term projects and programs, through the capital market. All of which adversely affect the scope for increasing economic growth.

Mongolia's economic growth reached 17.5% in 2011 due mainly to the mining sector; regionally and globally. Mining companies listed on the Mongolian Stock Exchange (which make up the TOP-20 index) have risen sharply. As a result, the number of foreign and domestic investors, and professional brokers investing in the Mongolian stock market, has increased significantly.  

However, since 2012, the country’s capital market value and liquidity ratios have been declining; due to: falls in commodity prices internationally, decreased foreign direct investment, and a general slowdown in economic growth.

The legal environment of the stock market a basic condition for its development has been improved, and effective supervisory (and regulatory) systems created. But, a number of issues adversely affect the development of the capital market, including:

• weak development of stock market infrastructure (such as insufficient cooperation  between the payment, settlement and trading systems, and professional intermediaries), 
  
• lack of risk-based supervision and regulation mechanisms, and 
• insufficient professional investors etc. 

Therefore, there is a need to develop policy and regulatory recommendations to increase the participation of institutional investors. This to be based on the results of a study of constraints affecting the base of institutional investors in the capital market. With the objectives to increase market demand, support the supply of goods and services, and to increase access to products and services within the stock market. 

Based on the above, the Commission is seeking to hire an experienced national consultant to provide support to improve the regulatory environment associated with introducing exchange-traded funds (ETFs), mutual funds and equity crowdfunding. The work will also involve attention to increasing the number of mutual funds, and propose relevant policy recommendations and measures.

B. OBJECTIVE OF THE ASSIGNMENT

The main objective of the assignment is to improve the regulatory environment associated with introducing ETFs, mutual funds and equity crowdfunding; increasing the number of mutual funds and proposing relevant policy recommendations and measures. Prior to drafting recommendation, the Consultant will analyze capital market legislation and regulations related to the above-mentioned financial instruments (based on international best practices). 

C. SCOPE OF THE WORK

The tasks of the Consultant include, but are not limited to:

Task 1: Pre-draft work (off-site mission at Commission, 21 working days) 

1. Inception report along with a Contract implementation plan;
2. Review current laws and regulation regulating the market, i.e., Securities Market Law, Investment Fund Law and the Commission’s regulation regulating the capital market;  
3. Complete a comparative review of laws and regulations - related to exchange-traded funds, mutual funds and equity crowdfunding - in at least two other countries (to be selected in consultation with the Client);
4. Develop recommendations on developing exchange-traded funds, mutual funds and equity crowdfunding;

Task 2: Finalizing recommendation (on-site mission at Commission, 7 days)

1. Hold meetings with stakeholders, including governmental and non-governmental organizations, to present findings and outcomes;
2. Complete final report, based on comments received from the Commission on the first draft;  
3. Perform other related duties as assigned.

D. DELIVERABLES 

The Consultant shall perform the following activities as set forth in the Terms of Reference and submit the relevant studies, draft laws, and work reports to the International Cooperation Department in paper and electronic forms. 

1. Contract implementation plan; 
2. Base research on the current situation of exchange-traded funds, mutual funds and equity crowdfunding;
3. Comparative review of at least two countries, of the laws and regulations related to exchange-traded funds, mutual funds and equity crowdfunding;
4. Draft recommendations on developing exchange-traded funds, mutual funds and equity crowdfunding (Mongolian and English);
5. Proposals on related laws, regulations, amendments, and repeals (in connection with improving relevant laws and regulations related to the relevant financial instruments);
6. Final report.

E. CONSULTANT’S QUALIFICATIONS AND/OR SELECTION CRITERIA

The Consultant shall satisfy the following requirements and skills:

Education: The Consultant should have a master's degree or preferably higher/PhD in Finance, Economics; specialized in corporate finance, investment management and financial instruments (equity/debt financing). 

Experience: The Consultant should have at least eight years’ work experience; with knowledge of methods and techniques required for drafting policy documents and legislation; with a track record of working in similar projects for improving capital market regulations. Candidates specialized in legislation related to the Securities market, Investment fund, and complex financial instruments are highly preferable. 

Language skills: The Consultant shall be fluent in English.

Other skills: 

• Extensive knowledge of mutual funds, exchange-traded fund and equity crowdfunding (sufficient knowledge in regulation of formal financial market will be an asset); 
• Ability to draft laws, regulations, reports, and and legislative documents; 
• Advanced analytical skill and research ability;
• Well-organized and able to work independently; 
• Ability to advise others, and work collaboratively within a team environment.

F. SUPERVISION AND REPORTING

The Consultant will report directly to the Director of the International Cooperation Department of the Commission; and work under direct day-to-day supervision of the Director of the Commission’s Securities Market Department. A contract implementation plan including a concise description of activities, timelines shall be prepared by the Consultant within three working days after commencement of the consultancy service. 

The Securities Market Department and PIU (SFFS) shall evaluate the consultant’s performance on an output basis and approve of invoices for delivered outputs. All reports shall be prepared in both English and Mongolian, in electronic and hard format, which shall be submitted to the Commission and the PIU (SFFS).

G. CONTRACT DURATION

The duration of the consultancy is 28 working days, and will start in June 2022. Upon signing the contract, the selected consultant will start the provision of services and will complete their duties within the period specified in the contract. In accordance with the agreement between the parties, the work specified in the terms of reference shall be completed and presented to the Client. 

Payments will be released upon satisfactory completion of all deliverables according to the following schedule: 

Deliverables 1-3: 50% of total contract amount; 

Deliverables 4-6: 50% of total contract amount; 

H. INSTITUTIONAL ARRANGEMENTS

The Commission will provide office space (work desk, meeting room, etc.) and assign a coordinator to work with the Consultant to facilitate the consultant's work at the Commission (meetings, visits, and other communications with government agencies, officials, and market players, etc.). The Commission's Securities Market Department will provide management and organizational support for the day-to-day work of the Consultant. 

If you possess the above qualifications, please submit the following documents via email to procurement_sgm@sffs.mn. 

    1. Cover letter indicating why she/he considers her/himself suitable for the position;

    2. Detailed CV highlighting relevant skills/experience;

    3. Copy of diplomas or certificates; and,

    4. Two (2) reference letters from previous last two employers.

The consultant will be selected in accordance with the World Bank’s Procurement Regulations for IPF Borrowers (July 2016).

Expressions of Interest must be delivered in a written form to the address below by e-mail before 15:00 pm on May 31, 2022 (local time, Ulan-Bator, Mongolia). 

Further information can be obtained at the address below during office hours: 8:30 to 17:30 hours (local Ulaanbaatar time) or procurement_sgm@sffs.mn.

70120582