One of the four pillars selected by the central government for Macau’s future development and economic diversification, the so-called ‘1+4,’ is the development of modern finance through a range of financial services to be available in Macau.
The Macau Monetary Authority (AMCM) has committed to improving financial legislation and regulation, updating the financial infrastructure and deepening cross-border financial cooperation.
According to AMCM, improvements to the market environment have diversified Macau’s financial institutions and promoted new financial sectors such as the bond market, wealth management and financial leasing.
The authority’s 2022 statistics show the financial sector’s contribution to the gross value added (GVA) of economic activity was 17.2%, up 10.3% compared to 6.9% in 2019.
At the end of the third quarter (Q3), the financial sector’s total assets in Macau reached 2.69 billion patacas, an increase of 24.2% compared to the end of 2019.
The same authority also noted that this year alone, two new types of financial institution were authorized to commence operations in Macau, following the authorization of several financial institutions to start their activities last year.
Bond market as the main focus
One of the main focuses has been the acceleration of tangible and intangible bond market infrastructures.
In 2023, the Ministry of Finance of the People’s Republic of China carried out the third issuance of national bonds in Macau, as well as supporting the People’s Government of Guangdong Province in the third issuance of its bonds in Macau.
Until the end of October this year, 343 bonds were issued or listed in Macau, with an amount equivalent to 525.2 billion patacas.
The bonds include sovereign bonds, provincial government bonds, corporate bonds, green bonds, financial bonds and capital supplement bonds.
With the revision of the ‘Legal Regime of the Financial System,’ which came into force on Nov. 1, the registration regime for the public issuance of bonds in Macau has been officially implemented. AMCM has said it is now conducting an exhaustive analysis and review of the guidelines and administrative procedures related to bond activity, and has already launched the first round of consultations with the sector on Macau’s Securities Law.
Improvements are also being made to the Central Securities Depository (CSD) system to connect it with the international deposit system and attract more international investors.
The main purpose is to gradually improve the different legal regimes, system mechanisms and support measures so these can increase the confidence of participants in the Macau bond market and strengthen market competitiveness.
Wealth Management in Cooperation Zone
Another area of focus is the wealth management sector, a sector in which AMCM is said to have collaborated with the financial authorities of the In-depth Cooperation Zone for the creation of measures to facilitate the establishment of private fund management companies in Macau that are also qualified in the Cooperation Zone.
The AMCM is also reinforcing the promotion of fund management activities through a review of the Funds Law and preparing guidelines on the performance of the functions of trust fiduciaries, to complement the enforcement of trusts law. At the same time, AMCM said it is also seeking new measures to attract asset management companies to establish themselves in Macau.
Innovation and Digital Currency
Innovation and technology for financial services are also within scope, with AMCM recalling that the newly approved ‘Legal Regime for Monetary Issuance’ anticipates the possibility of digital currency as legal tender. The regime also provides for temporary licenses for financial innovation and allows qualified entities with controllable risks to carry out financial activities on an experimental basis through technological or operational innovation, to promote financial technological innovation.
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