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ABSTRACT

THIS RESEARCH IS TO ASSESS THE CURRENT STATUS QUO, STRENGTHS, AND WEAKNESSES OF FINANCIAL CONSUMER PROTECTION MECHANISMS IN MACAO. ACCORDING TO THE WORLD BANK, FINANCIAL CONSUMER PROTECTION CAN BRING POSITIVE IMPACT ON THE DEVELOPMENT OF FINANCIAL SECTOR, BROADENING FINANCIAL INCLUSION AND FOSTERING ECONOMIC GROWTH. IN 2022, UNDER THE BACKDROP OF COVID-19 AND DOWNTURN IN ECONOMY, MACAO GOVERNMENT ANNOUNCED ITS AMBITION TO RECOVER AND DIVERSIFY THE ECONOMY OF MACAO BY LEVERAGING “1+4” DIVERSIFIED DEVELOPMENT STRATEGY, IN WHICH DEVELOPING MODERN FINANCE IS ONE OF THE MAIN PRIORITIES. THE NEW FINANCIAL SYSTEM ACT TOOK INTO EFFECT ON 1ST NOVEMBER 2023 AND THIS ACT WILL ENABLE NON-FINANCIAL INSTITUTIONS TO APPLY FOR TEMPORARY LICENSES ON FIN-TECH INNOVATIONS WITHIN A CONTROLLABLE RISK AREA. IN THE LOCAL CONTEXT, DOES MACAO HAVE A STRONG FINANCIAL CONSUMER PROTECTION MECHANISM IN PLACE TO GOAL FOR DEVELOPING MODERN FINANCE AND FACE CHALLENGES BROUGHT BY FIN-TECH? IN THIS RESEARCH, A MIXED METHOD CONSISTING OF DOCTRINAL LEGAL RESEARCH METHOD AND COMPARATIVE LEGAL RESEARCH METHOD IS ADOPTED. 10 JURISDICTIONS (IRELAND, SINGAPORE, AUSTRALIA, UNITED KINGDOM, MALAYSIA, HONG KONG, CHINA, EUROPEAN UNION, CANADA, AND UNITED STATES) WERE SELECTED IN COMPARISON OF RIGHTS FOR FINANCIAL CONSUMER PROTECTION BASED ON THE G20/OECD HIGH-LEVEL PRINCIPLES ON FINANCIAL CONSUMER PROTECTION AND THE RESULTS OF WHICH WERE THEN COMPARED TO THE RIGHTS FOR FINANCIAL CONSUMER PROTECTION IN MACAO. THE FINDINGS OF THIS STUDY SHOW THAT THE MAIN STRENGTH OF FINANCIAL CONSUMER PROTECTION MECHANISMS IN MACAO LIES ON THE SUPERVISION OF THE MONETARY AUTHORITY OF MACAO (AMCM) ON THE BANKING SECTOR AND INSURANCE SECTOR, OTHER FINANCIAL INSTITUTIONS ACCORDING TO INTERNATIONAL PRINCIPLES; HOWEVER, THE IN-DEPTHNESS OF WORK DONE BY MACAO IN FINANCIAL CONSUMER PROTECTION IS NOT AS MUCH AS THOSE DONE BY OTHER JURISDICTIONS: IN MACAO, THERE IS NO POLICYHOLDER PROTECTION SCHEME IN THE EVENT OF FAILURE OF INSURANCE COMPANIES; NO MYSTERY SHOPPING AND CONSUMER SURVEY DONE BY OVERSIGHT BODIES; NARROW RANGE OF DEFINITION OF VULNERABLE CONSUMERS; NO FINANCIAL LITERACY SURVEY; NO IN-DEPTH COMPETITION LAW; NO IN-DEPTH GUIDELINES TO MONITOR ADVERTISING MATERIALS FOR FINANCIAL PRODUCTS; NO DATABASE FOR CONSUMERS TO SEARCH FOR UNREGULATED FIRMS AND SCAMMERS; NO IN-DEPTH FINANCIAL EDUCATIONAL MATERIALS ABOUT THE RIGHTS OF FINANCIAL CONSUMERS. IT IS RECOMMENDED THAT MACAO GOVERNMENT CAN LEARN FROM UNITED KINGDOM, CANADA AND EUROPEAN UNION TO ADOPT BEHAVIOURAL INSIGHTS IN DEVELOPING FINANCIAL CONSUMER PROTECTION POLICY TO PROTECT FINANCIAL CONSUMERS FROM BEING EXPLOITED BY THE FINANCIAL SERVICE PROVIDERS BASED ON THE CONSUMERS’ BEHAVIOURAL BIASES. SOME LITERATURE SUGGESTED THAT CONSUMERS ARE VULNERABLE IN DIGITAL LANDSCAPE. THEREFORE, IT IS STRONGLY RECOMMENDED THAT MACAO GOVERNMENT SHALL TAKE PROACTIVE ACTIONS TO STRENGTHEN THE CURRENT FINANCIAL CONSUMER PROTECTION MECHANISM BY ADHERING TO THE G20/OECD HIGH-LEVEL PRINCIPLES ON FINANCIAL CONSUMER PROTECTION, IN ORDER TO DEVELOP MODERN FINANCE AND PROTECT CONSUMERS FROM THE RISKS POSED BY FIN-TECH