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Five compliant brokers including frontier have participated in milestone soft launch of MSE's new trading, clearing settlement, depository and surveillance system

According to Mongolian Stock Exchange on July 2,2012 (http://www.mse.mn/), “MSE CARRIES OUT A SOFT LAUNCH OF ITS NEW SYSTEM

“A significant milestone was reached today under the strategic partnership between the London Stock Exchange, the State Property Committee and the Mongolian Stock Exchange. The MSE carried out a soft launch of its new Trading, Clearing Settlement and Depository and Surveillance systems.

The new market regulations which are aligned to international standards require stringent requirements to be met by market participants. We are pleased to announce that five Brokers were able to comply with the new requirements and were present on the Trading Floor today to participate in the launch. Brokers continue to work with their clearing Banks to satisfy the requirements. The soft launch is intended to give Broker Dealers some time to adjust to the new market regulations and to meet the new requirements. We are confident that more and more participants will be added on in the next few days.”

According to leading Mongolian internet portal gogo.mn on July 2,2012 (http://economics.gogo.mn/news/107696) , “the five brokers who have participated in trading by new market regulations were BD Sec, TDB Capital, Golomt Securities, Tenger Capital and Frontier Securities. However, the remaining 73 brokers could not participate in trading, the main reason being that they are not satisfying some requirements of the exchange. Also the brokers must establish agreements and clearing banking service introduced.”

“CEO of MSE Kh.Altai has clarified that brokers should deposit collateral and have payment guarantee fund. Only brokers that complied have participated in today’s trading. Previously we reminded constantly to brokers therefore perhaps soon they will deposit and participate in trading. I also heard that they are doing agreements with clearing banks.”

According to calculations done by Frontier Securities’ Chief Investment Strategist Dale Choi, compound rate of growth of MSE Top20 Index(geometric mean return) in 2001-2012 was 35.97%.

Please click on following for PDF version of analysis of MSE annual returns distributions -https://dl.dropbox.com/u/42174832/MSE%20annual%20returns%20distributions.pdf