Macau announces MCEX exchange for institutional exposure to China’s micro and small businesses

With the Macau Monetary Authority’s blessing, Micro Connect has launched the Micro Connect Macao Financial Assets Exchange (MCEX) in Macao.

MCEX is the first licensed global exchange for Daily Revenue Obligations (DROs), which the venue says to be a new asset class that connects institutional capital around the world with China’s micro and small businesses.

DROs allow investors to tap into China’s small businesses’ daily cash flows

MCEX aims to provide China’s micro and small businesses with adequate and sustainable financing while allowing global investors to enjoy quality returns by tapping into their daily cash flows.

One issue that can’t be overlooked, however, is how transparent can these cash flows be, given the reality of parallel economies in micro and small businesses. 

The DROs can be traded by institutional investors, which provide funding for small businesses in China in exchange for part of their daily revenue.

Micro Connect Macao Financial Assets Exchange Co., Ltd., MCEX, was set up according to an Executive Order announced by the Chief Executive of the Macao SAR on December 5, 2022. The venue is expected to create an impactful financial market that supports grassroots entrepreneurship, increases job opportunities and helps achieve “common prosperity”.

With this industrial upgrade and economic diversification, Macao plans to become a multi-level financial services center and a focal point in the Greater Bay Area.

World’s first financial market dedicated to the micro economy of China

The Chief Executive of the Macao Special Administrative Region (Macao SAR), Mr. Ho Iat Seng, Chairman of the Board of the Monetary Authority of Macao, Mr. Chan Sau San, together with Micro Connect Founder and Chairman, Mr. Charles Li, and Micro Connect Founder and CEO, Mr. Gary Zhang, officiated the “Prelude” ceremony with several key government officials in Macao.

Chan Sau San, Chairman of the Board of the Macau Monetary Authority, said: “The Macau Monetary Authority is actively deploying the development of the modern financial industry, taking advantage of Macao’s highly open financial system, and introducing different types of financial institutions to settle in Macao. It is hoped that after the trial operation of MCEX, the business model will be gradually straightened out and a solid risk prevention mechanism will be established; at the same time, opportunities will be fully seized, based on the location advantage of the “intersection” of Macao’s dual circulation, and international funds will be introduced to help China’s micro and small businesses and the real economy, and contribute to Macao’s economic diversification.”

Charles Li, Co-Founder and Chairman of Micro Connect, commented: “Today, we are extremely pleased to establish our innovative platform in Macao. This is the world’s first financial market dedicated to the micro economy of China through an innovative new asset class, the DRO. By leveraging China’s leading digital economy, it will reshape the global financial landscape. New endeavors require new environments, and we look forward to Micro Connect’s contribution to connecting China’s micro and small businesses with global capital.”

Co-founder Gary Zhang pointed to several milestones for Micro Connect and MCEX: the launch of DROs, the world’s first exchange-traded revenue sharing product; the launch of the Micro Connect Leadership Fund; and the launch of the Micro Connect Daily Cash Index (MDCI) and Micro Connect Composite Index.

“The establishment of MCEX means that financing via financial exchanges is no longer exclusive to a small number of large corporates, but now a convenient choice for millions of micro and small businesses. As an important channel for these entities, Macao will rise to become a new international financial center in the digital age.

“Let us remember this very moment. This is the first batch of micro and small businesses being funded on the exchange in human history! This is a historic moment for MCEX and for Macao, but most of all, for countless of micro and small businesses! Let us all cheer for Macao and the entrepreneurs of China!”