Financial Crime World

Macau Takes Steps to Boost Financial Sector Compliance

Enhancing International Competitiveness through Regulatory Reforms

In an effort to strengthen its financial system and enhance international competitiveness, Macau’s Legislative Assembly has passed new amendments to the Financial System Act. The changes, which come into effect on November 1, aim to promote transparency, accountability, and efficiency in the sector.

Key Provisions of the Amendments

  • Simplified Licensing Process: A more flexible and simplified licensing process for banks specializing in particular areas will be introduced.
  • Minimum Registered Capital Requirements:
    • Restricted license banks: 100 million patacas ($12.4 million)
    • Unrestricted banks: 300 million patacas ($37.2 million)
  • Enhanced Supervision: The Monetary Authority of Macau (AMCM) will have more power to supervise accountants and obtain urgent information from them upon request.
  • Bond Issuance Registration: The AMCM will be responsible for registering bond issuance, enhancing transparency and accountability in the bond market.

Strengthening Governance Standards and Supervision

The amendments aim to strengthen governance standards and supervision by:

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

Implications for Financial Institutions

As the new Act takes effect, existing financial institutions may face challenges transitioning their operations and systems to comply. This may involve reviewing internal policies and procedures, assessing governance and risk management practices, and ensuring compliance with forthcoming regulatory requirements.

Conclusion

The amendments provide clearer guidance on assessing licenses, streamline administrative procedures, bolster governance standards, and align Macau with global regulatory practices. As the amendments take effect, it is expected that a broader range of financial institutions will be attracted to commence their business in Macau.