New law on National payment system dated 31 May 2017 shall become effective from 1 January 2018. This law introduces the launch of the integrated payment system between the Central Bank, commercial banks, legal entities, other financial institutions and individual customers. As a result, the Central Bank can control all payment transactions of all participants of financial market in Mongolia. It will help the Central bank to have better picture of the economy through controlling all payment system of Mongolia, protecting rights of customers, ensuring competitive market and granting new licenses for financial services including operating the system, payment service provider, payment representative, outsourcing, electronic money transfer service and issue of electronic money etc.
In accordance with this new law, the Central Bank will grant the following license to applicants. They are:
a) Payment service;
b) Activities associated with payment service;
c) Operating the system;
d) Issue payment tool;
e) Performing payment representative;
f) Providing payment service through contracted representative;
g) Outsourcing service;
h) Money transfer service;
i) Electronic money transfer;
j) Issue electronic money; and
k) Other services defined by the Central Bank.
Many of above listed service were not regulated under the law before so the law has cleared all these financial service related definitions and terms.
Central Bank will perform the following roles in security market:
· Electronic name transfer of tangible shares, change tangible shares into intangible shares and create possibility of issuing intangible shares;
· Register shares transaction;
· Shares custodian service;
· Deposit electronic shares or tangible share.
The new law has stated liabilities imposed under Law on Offence and Criminal code to a defaulted party if there is breach of the law.
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