Macau (MNA) – The law amendment regulating local financial leasing companies needs to be more specific as there is already less supervision on controlling leasing companies in the city after the law was amended, the chairman of the 2nd standing committee of the Legislative Assembly (AL), Chan Chak Mo, told media on Thursday.
After the amendment of the regime of local financial leasing companies was passed at the AL last month, financial leasing companies will stand in for financial bodies that are directly under the supervision of the Monetary Authority of Macao (AMCM).
About the new set of rules regulating financial leasing companies discussed by the committee today, Chan said that “our legal consultant has raised a call for greater clarity in some of the articles of this proposal.”
According to article 3, financial leasing companies will be able to conduct leasing activities under six situations, although the proposal did not specify the types of legal leasing activities in the city.
“In our understanding, a finance lease only comes into effect when the duration of the lease reaches a minimum of one year, and the amendment should clarify if both the legal owner of the asset and the lessee will sign a contract on whether the lessee has control over the asset once the leasing period is over,” said Chan.
The committee chairman said further that the government should provide a more clear distinction between articles 4 and 5 regarding the parties entitled to the right of operating a financial leasing company.
“In article 4, ‘any entity is prohibited from adding terms to its company’s title for implication without the approval by Monetary Authority,’ and article 5 states clearly that ‘anybody or entity are prohibited from running financial leasing companies without an approval’, what are the differences between anybody and entity? Why one article include anybody and one does not?” questioned Mr. Chan.
The proposal also suggested that the operation of a financial leasing company will be terminated under a “serious” situation.
“The committee wants the government to provide a more specific rule on the situations being described as ‘serious’,” added the legislator.
Financial leasing companies will be entitled to less supervision compare to that over credit organisations, and the proposal suggests that minimum capital requirements will be lowered to MOP10 million and does not necessarily need to be established as a company limited by shares.
The law amendment aims at attracting more investors to open financial leasing companies in Macau as there are currently only two financial leasing companies established in the city.