Central securities depository system likely launched next month

By Therese Tu

A Central Securities Depository (CSD) is expected to be launched next month, with most of its design, development, and testing has been mostly completed, Lau Kei Fong, director of the Financial Infrastructure and Information Department of the Monetary Authority of Macau (AMCM) indicated.

CSD is a key financial infrastructure for strengthening the integration of Macau’s financial market with overseas financial markets.

The system provides securities account opening service and centralized securities depository service, playing an important role in retaining clear records of the legal ownership of securities holders and ensuring the integrity of securities issuance.

AMCM has collaborated with the China Central Depository & Clearing Co., Ltd. (CCDC) to build the system, with support from the Chinese mainland government.

CCDC is a state-owned enterprise in mainland China with extensive experience in financial infrastructure and bond business.

The deputy general manager of CCDC, Xu Liangdui, was cited by the AMCM announcement as saying that they will put every effort to support the construction of CSD, adding that the establishment of supporting financial infrastructure is important for the development of the bond market and for the Macau government’s plan of optimization of the economic structure.

In the same announcement, Lau Hang Kun, member of the Administrative Committee of the AMCM, predicts that in the starting stage CSD will provide centralized bond registration and custody as well as related services such as clearing, settlement, and interest payment, adding that more services will be provided in the future referring to models in other mature international markets.

Meanwhile, Chan Sau San, Chairman of the Administrative Committee of AMCM, expressed his hope that CSD can promote the development of the bond market and subsequent capital market businesses to accelerate the diversification of Macau’s economy.

The AMCM aims to advance legal support and supervision for the financial market, with the aim of gradually promoting the modern financial industry to become a new growth point for Macau’s economy.

The monetary authority also wishes to attract financial institutions from mainland China, Portuguese-speaking countries, and other regions to participate in the investment and financial business in Macau, utilizing Macau’s function as a “China-Portuguese financial platform” within the construction of the Greater Bay Area.