Lionel Leong (center) yesterday at the AL. Suspended lawmaker Sulu Sou watches from the audience seats
The amendment of the regime of Macau’s financial leasing companies was passed by the Legislative Assembly (AL) yesterday. With the new law, financial leasing companies will not be defined as credit organizations.
Financial leasing companies will stand in for financial bodies which are operating leasing activities, with their activities remaining under the supervision of the Monetary Authority of Macao (AMCM). However, there will be less supervision compared to that over credit organizations.
Minimum capital requirements for financial leasing companies will also be reduced from MOP30 million to MOP10 million.
Further, financial leasing companies will not be required to be established as a Company Limited by Shares.
Both Company Limited by Shares and Limited Company are modes allowed in the establishment of a financial leasing company.
The concept of Special Purpose Vehicles (SPV) has also been added into the regime.
Authorized banks in Macau and financial leasing companies can establish SPVs in Macau, with these banks and companies not needing to apply for a new concession for their SPVs. They only need to notify the monetary authority in advance, after which they may open SPVs.
The lawmakers were mainly concerned about the supervision of such companies, as well as their business operation range.
Lionel Leong, the Secretary for Economy and Finance, in reply to the lawmakers, emphasized that this regime’s amendment aims to improve Macau’s competence in the global competition.
“Financial leasing has been very popular recently around the world, including [in] mainland China, which is doing very [well],” said Leong.
Leong noted that Macau’s regulations stopped many investors from opening financial leasing companies in Macau. Due to this, only two financial leasing companies were established in Macau.
“In the past, a financial leasing company was a credit organization, and its supervision was strict,” said Leong, adding that once this law amendment comes into effect, “[financial leasing companies] will no longer take deposits because it is not a credit body,” said Leong.
The Secretary also noted that many other laws would be amended in order to better implement the financial leasing company regime.
Leong remarked that the local government has spoken with China’s related authorities concerning Macau’s financial leasing development and regulations.
Representatives from the Legal Affairs Bureau (DSAJ), when giving an explanation to lawmakers, noted that the “capital of financial leasing companies does not come from taking deposits. “[Financial] risks [of financial leasing companies] do not come from their debt-paying ability. Therefore, regulations for the credit organization will not be useful [to financial leasing companies].”
Regarding the financial guarantee functions of financial leasing companies, the same DSAJ representative said they “do not have a financial guarantee function like a credit organization does.”
However, according to the DSAJ representative, financial leasing companies can guarantee their own SPVs financially, and may possibly also receive lower loan interest rates from banks.
In addition, she explained that local banks, whose parent companies are not from Macau, can also open SPVs.
Concerning the transfer of capital belonging to financial leasing companies, details should be referred to each contract between the companies and other business operations involved between parties.
Financial leasing companies can loan, and the government will not be subject to loan limitation restrictions.
Furthermore, the same DSAJ representative noted that all of Macau’s financial regulations, which are applied to all financial organizations, would also be applicable to financial leasing companies.
Currently, the city’s relevant authority has already prepared a law relating to ferry registration, and it is planned for the legislation to be introduced later this year.
Moreover, during yesterday’s AL, another law suggesting tax benefits for financial leasing companies was passed, legislating property stamp tax and revenue tax benefits in order to attract investors to Macau in order to establish financial leasing companies.
What is financial leasing?
FINANCIAL LEASING is an alternative way of financing whereby a licensed leasing company purchases an asset on behalf of its customer in return for a contractually agreed series of payments which usually include an element of interest.
On the lawmakers’ agenda
PEARL HORIZON Six lawmakers have expressed their concerns over the Pearl Horizon issue: Ng Kuok Cheong, Si Ka Lon, Au Kam Sam, Lei Cheng I, Mak Soi Kun and Zheng Anting. The lawmakers suggested that the Pearl Horizon developers assume responsibility for returning the buyers’ pre-payments. Zheng suggested that the government amend the city’s land law. Au criticized the government for having offered an unfair proposal to buyers as public houses are not private property projects. Both Au and Kam called for the government to place the Pearl Horizon land on open public tender.
GAMING CONCESSIONS Pereira Coutinho has called on the government to announce the results of its study concerning gaming concessions. The lawmaker criticized the local government for the lack of transparency in the gaming sector, as the public is still not aware of the conditions and requirements pertaining to gaming concessions. Coutinho believes that gaming operators’ social responsibilities should be increased. In his opinion, gaming concessions cannot ensure residents’ interests concerning housing and social security, and cannot improve the living quality of gaming employees and their facilities. “Why does the government conduct an open tender for the six gaming concessions but […] not require the gaming operators to undertake new social responsibilities? Or is there a tender to increase the gaming concessions to seven or eight?” asked Coutinho.
SCHOOL BULLY Agnes Lam has said that the Programme for International Student Assessment (PISA) results indicate that “bullying in Macau’s schools is more serious than in other regions across Asia.” Nearly 30 percent of the students think that different kinds of bullying behavior exist in schools. “Whether bullying exists in each one of the cases, it still needs to be analyzed until a final judgement is done. However, these numbers at least tell us that students feel the existence of danger,” said Lam.
No Comments