City’s financial assets exchange platform soft-launched

The Micro Connect Financial Assets Exchange platform (MCEX), which offers relevant services to the city, was launched over the weekend in Macau.

The Chief Executive Ho Iat Seng approved the platform on Dec. 5 last year.

Micro Connect is a company founded and chaired by former Hong Kong Stock Exchange chief executive Charles Li Xiaojia.

As per the statement on obtaining the local government’s approval, the company noted “the new Micro Connect Exchange will operate on a blockchain-enabled technology platform and is ready to deliver innovation to the capital markets in China and beyond.”

At the launch ceremony, the company said the platform aims to use digital methods to connect international capital with Chinese small and micro enterprises and to construct a more inclusive and impactful brand-new financial market.

Chan Sau San, chairman of the board of the Monetary Authority of Macao (AMCM), said in his speech, “It is hoped that after the trial operation of MCEX, the business model will be gradually straightened out and a solid risk prevention mechanism will be established.”

He added that with the aforementioned outcome accomplished, opportunities will be fully seized, based on the location advantage of the “intersection” of Macau’s dual circulation, and international funds will be introduced to help China’s micro and small businesses and the real economy, and contribute to Macau’s economic diversification.

China’s Gross Domestic Product (GDP) currently sees a 60% reliance on consumption, mostly involving small businesses. There are over 70 million small shops across China. On average, each year six million of these shops shut down, in contrast to 10 million new businesses, which equates to new capital needs ranging between RMB1.2 and 1.3 billion.

The company pledged “MCEX will bring about an unprecedented economically inclusive and socially impactful financial market that supports grassroots entrepreneurship, increases job opportunities and helps achieve ‘common prosperity’.”

Li said MCEX will help small businesses across China to finance their quick expansion, which is traditionally impossible considering the enormous costs and charges. It was suggested that if these businesses achieve financial sturdiness, China’s economy will grow stronger.

Li said the platform is the world’s first financial market dedicated to China’s micro economy through an innovative new asset class and revenue sharing product, the DRO (Daily Revenue Obligations). By leveraging China’s leading digital economy, the DRO will reshape the global financial landscape.

Micro Connect Founder and CEO Gary Zhang announced several products for Micro Connect and MCEX, namely the launch of DROs, the world’s first exchange-traded revenue sharing product; the launch of the Micro Connect Leadership Fund and the launch of the Micro Connect Daily Cash Index (MDCI) and Micro Connect Composite Index.

Giving information about the DRO and the other products to be launched, the CEO pledged that the establishment of MCEX means financing via financial exchanges is no longer exclusive to a few large corporates, but is now a convenient choice for millions of micro and small businesses.

He also pledged to turn Macau into a new international financial center in the digital age.

Through the new financial market platform, MCEX, Micro Connect hopes to provide China’s micro and small businesses with adequate and sustainable financing while allowing global investors to enjoy quality returns by tapping into their daily and transparent cash flows.

MCEX will create an ocean of opportunities for global capital while providing a significant boost to China’s grassroots economy.

MCEX will also help to form the foundations of Macau’s financial infrastructure and further develop its innovation and technology industry. With this industrial upgrade and economic diversification, Macau will become a multi-level financial services center and a focal point in the Greater Bay Area.

Although the company is an exchange platform itself, it may eventually seek public listing on stock exchanges, Li told a post-ceremony press conference.

On supervising DROs, Li said the Chinese Franchise Law has authorities. DRO is an agreement on investment of revenue sharing, he further explained, and has no public participation, meaning that it neither has debt nor stocks.

The launch ceremony also saw the listing of the first batch of Micro Connect’s DROs, which are three stores in mainland China funded by the MCEX platform, as well as a gong-striking ceremony officiated by Chief Executive Ho Iat Seng and several other guests.