The BSX continues to attract international recognition.
As the world's largest offshore fully electronic securities market, it offers a diverse range of listing and trading opportunities for both international and domestic issuers of equity, debt, depository receipts, insurance securitization and derivative warrants.
Internationally recognized as an appealing venue for the listing of hedge funds, fixed income structures and investment fund structures. The BSX also operates a Mezzanine Market for early stage companies. All in all, the BSX provides unique products for the offshore market, thus contributing to its growth and success.
The BSX describes itself as committed to meeting and exceeding international securities market standards. Since the late 1980's, the introduction of a central securities depository and shorter settlement cycles have been universally acknowledged as the best way to reduce risk and make securities markets more efficient.
Another contributing factor to the Exchange's success is the BSX's 'light but effective' regulatory environment which makes it conducive to new and innovative product listings, especially 'institutional only' securities. The BSX is bound neither by European Union Listings Directive, nor United States Securities Exchange Commission (SEC) regulations.
As a full member of the World Federation of Exchanges, the BSX has been acknowledged by its peers to meet the highest regulatory and operational standards. Similarly the US Securities Exchange Commission recognizes the BSX as a 'Designated Offshore Securities Exchange' (DOSM). The BSX also enjoys recognition by the Bermuda Monetary Authority, as a Recognized Investment Exchange and an Approved Stock Exchange; the London Stock Exchange, as a Registered Organisation and the IOSCO, as an Affiliate Member. BSX is also recognized as an approved Stock Exchange under Australia's Foreign Investment Funds (FIF) taxation rules, and in October, 2011, the Minister of Finance for Canada approved the addition of the Bermuda Stock Exchange to the list of designated exchanges under the Income Tax Act (Canada).
The BSX has also been approved by the UK's Financial Services Authority ("FSA") as a 'Designated Investment Exchange'. Many potential investors recognize this as a seal of approval from the FSA as to the effectiveness of the BSX's rules and its internal regulatory environment as well as the operation of the BSX, supervision, membership, price information, clearing and compliance arrangements.
As a designated investment exchange, FSA authorized firms are allowed to treat transactions on the BSX in much the same way as if they were trading on the UK's recognized investment exchanges. As a consequence, investment by an FSA firm in a BSX listed security will now incur a significantly lower position risk requirement, which in turn reduces overall transaction costs. HM Revenue & Customs also lists the BSX as a Recognized Stock Exchange.
BSX lists institutional funds under a "commercially sensible" regulatory environment that meets international standards. The BSX does not impose minimum capital requirements or investment restrictions (with the exception of disallowing a fund to take control of its underlying investments) and allows flexibility for hedge funds and the use of prime brokers.
Bermuda has earned a reputation as a world-class center of commerce, featuring a business-friendly environment, a stable and growing economy, and an unmatched collection of talent and intellectual capital in key sectors, including insurance, financial services, and more recently, electronic commerce. In particular, Bermuda is a major international market for insurance and reinsurance. As at 31 December 2011, the BSX listed over $3 Billion USD in listed catastrophe bonds ("cat bonds") and other insurance linked securities ("ILS") on the exchange.
ADVANTAGES OF LISTING ON THE BSX
The key strengths of the BSX may be summarized as follows:
efficient, time sensitive and cost effective trading;
de-materialising shares through the Bermuda Securities Depository service ("BSD") removes the need for physical settlement;
listed Bermuda exempted companies enjoy free transferability of their shares;
responsive and approachable Market Authorities;
international standards of issuer regulations;
meets highest regulatory and operational standards; and
investment funds may benefit from the "Launch and List" facility agreed between the BMA and the BSX whereby fund formation and listing approvals run concurrently.