1. Which laws and regulations govern the capital markets in your jurisdiction?
Capital markets are, first and foremost, regulated by:
- the Financial System Act (FSA), approved by Decree-Law 32/93/M; and
- the Commercial Code, approved by Decree-Law 40/99/M.
Considering that the FSA dates from 1993 and the Commercial Code from 1999, the local regulator has issued directives to keep the local market up to speed with the latest trends. These include:
- Notices 009/B/2019-DSB/AMCM and 008/B/2021-DSB/AMCM ('Bond Directives'); and
- Notice 008/B/2022-DSB/AMCM ('Guideline on Bond Registration and Settlement').
The above are the core regulations with relevance to capital markets. Currently Macau does not have a stock market and the bond market is in its early stages, despite a significant push for its development since 2019.
2 Is your jurisdiction part of a supranational, transnational or multinational framework with relevance to capital markets? If yes, how does this work?
N/A.
3. Which bodies are responsible for regulating the capital markets in your jurisdiction? What powers do they have?
Capital markets in Macau are regulated by the Monetary Authority of Macau (AMCM).
The AMCM has a wide range of powers of licensing, oversight and enforcement over all financial institutions and activities in Macau.
With particular relevance to capital markets, the FSA empowers the AMCM to set:
- the limits and terms on which debt securities, certificates of deposit and other debt instruments may be issued;
- the limits and terms on which transferable loan certificates and other instruments of a similar nature may be issued; and
- the limits in respect of the underwriting of securities for indirect subscription or for the guarantee of their placement.
4. How does enforcement work and what kinds of sanctions may be applied?
The AMCM may investigate potential infractions through:
- complaints filed by the public;
- information that it becomes generally aware of;
- inspections conducted when considered necessary; and
- infractions that it becomes aware of in the exercise of its regulatory duties (eg, upon reviewing documents submitted by entities that are subject to supervision).
The AMCM may impose a wide range of sanctions, such as:
- monetary penalties;
- loss of capital applied in the operations subject to sanction;
- publication of sanctions;
- suspension of voting rights up to a maximum of five years;
- inhibition of office;
- cancellation of licences; and
- other remedial measures deemed appropriate.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.