Changing with the times: Macau’s progress in the financial sector
João Nuno Riquito and Kimberley Cheong of Riquito Advogados highlight Macau’s bold new proposals to overhaul its legal framework to better serve its banking industry
The Decree-Law No. 32/93/M, which regulates the financial activity of Macau, has been in force for 30 years. However, business has since evolved, and companies’ needs have changed. Since October 2022, the Legislative Assembly has been discussing the revision of Macau’s legal framework for the financial sector to adapt to the evolving needs of the community.
The proposed new legal framework is more in line with international standards, namely the Basel core principles, and the usual practice of neighbouring countries such as Hong Kong.
Some highlights of the new legal framework include:
Introducing a new type of banking licence, so that banks can provide a number of different services, instead of only issuing bank licences for universal banking activities;
Removing the approval of Macau’s chief executive, and the supporting opinion of the Monetary Authority of Macao (AMCM), when a company plans to issue bonds by the means of public subscription. The company now only needs to be registered in the AMCM before the issuance of such bonds;
Increasing the minimum capital required for establishing a bank;
Allowing academic institutions or technology companies to develop new projects related to the finance industry by issuing temporary licences;
Enforcing better governance of financial institutions by imposing strict requirements on the background of the board of directors and supervisory board; and
Supervising the accountancy work done by the AMCM, including by requiring the accounting companies to provide information regarding their work.
In addition, the government plans to reduce the annual supervisory fees collected by the AMCM, and simplify the supervision process.
In summary, this proposal is a favourable change for companies and the wider financial sector in Macau, aiming to help the economic diversification of the region.