Macau Seeks to Strengthen Financial Regulations with New Amendments

In a bid to bolster its financial credentials, Macau’s Legislative Assembly has passed new amendments to the Financial System Act. The amendments aim to future-proof Macau’s financial system and align it with international standards.

Key Changes to the Financial System Act

Licensing Process for Banks

Introduced a more flexible and simplified licensing process for banks specialising in particular areas
Reduced the minimum registered capital required for “restricted license banks” from 100 million patacas ($12.4 million) to 300 million patacas ($37.2 million)

Introduced a temporary licensing system for non-financial institutions engaging in fintech-related activities
Encourages innovations in financial products and services

Governance Standards

Raised the minimum number of directors for credit institutions in Macau from three to five
Mandated the establishment of a supervisory board with enhanced suitability requirements

Impact on Financial Institutions

“The inclusion of licensing procedures in the amendments is crucial as it ensures that financial institutions operating in Macau meet certain standards and requirements. This helps to safeguard the interests of consumers and maintain the integrity of the financial system,” said Pedro Cortes, managing partner at Macau-based law firm Rato, Ling, Lei & Cortés.

The Monetary Authority of Macau (AMCM) has been given more power to supervise accountants and obtain urgent information from them upon request. Additionally, the AMCM has become the body responsible for registering bond issuance, aiming to enhance transparency and accountability in the bond market.

Benefits of the Amendments

Provide clearer guidance on assessing licenses
Streamline administrative procedures
Bolster governance standards
Align Macau with global regulatory practices

However, Cortes warned that it would be challenging for existing financial institutions to transition their operations and systems to comply with the new Act. “Following the enactment of the Act, additional regulations, as well as instructions and guidelines issued by the AMCM to enable the implementation of the legislation, are likely to be published,” he said.

A Major Step Towards Developing Macau’s Financial Industry

The amendments are seen as a major step towards developing Macau’s financial industry and making it an international financial hub. As the territory continues to push for this goal, it is expected that a broader range of financial institutions will be attracted to commence their business in Macau.