1. What kind of market infrastructure does your jurisdiction provide for?

Currently, the main capital markets infrastructure in Macau comprises:

  • Chongwa (Macao) Financial Asset Exchange Co, Ltd (MOX) – a platform for listing bonds and other securities in Macau; and
  • Macao Central Securities Depository and Clearing Limited (MCSD), which mainly provides securities registration, clearing, settlement, depository and related services.

2. What are the rules governing liquidity flows across execution venues (eg, use of systematic internalisers, trading obligations)?

N/A.

3. Are there rules on light and dark markets and how do these apply?

N/A.

4. Are market participants subject to best execution requirements?

N/A.

5. Does your jurisdiction apply a target market concept?

There are three main target markets defined in applicable regulations pertaining to the issuance and distribution of securities:

  • professional investors;
  • the general public; and
  • for certain matters, persons aged 65 or over.

In summary, distribution of securities to the general public is subject to stricter requirements (eg, a favourable opinion of the Monetary Authority of Macau and authorisation of the chief executive in the case of bonds); whereas for professional investors, the requirements are less strict and are mainly aimed at ensuring fair treatment and sufficient information disclosure.

'Professional investors' are:

  • individuals or institutions with a portfolio of at least MOP 8 million; or
  • institutions with total assets of not less than MOP 400 million.

Finally, additional information duties and duties of care are imposed on financial institutions when distributing financial products to persons aged 65 or over.

6. How does securities settlement work in your jurisdiction?

Settlement of bonds issued in Macau must be made through the MCSD. Participants will register with the MCSD and appoint one of the designated settlement institutions (currently Bank of China Limited Macau Branch and Industrial and Commercial Bank of China (Macau) Limited).

All funds shall be settled through clearing accounts opened with these settlement institutions.

As for other securities sold or distributed in Macau through financial institutions, typically such financial institutions will settle the securities in the client's bank account in accordance with the agreements entered into with the clients.

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.