Bermuda
Local And International Equities
The
Bermuda Stock Exchange (BSX) opened in 1971.
It is a fully electronic open market with daily
trading and centralised settlement. The BSX
has traditionally been owned by three Bermuda
banking institutions, and in 1992 was formed
into a limited liability company. Trading memberships
on the exchange are freely available to international
brokers who meet BSX requirements.
The
Exchange’s fully electronic clearing,
settlement and depository service was installed
in 2001. By the end of 2002 all of the domestic
securities then listed on the BSX were depository
eligible.
The
BSX also introduced new regulations to make
listing on the Bermuda Stock Exchange easier
and clearer. The new regulations updated exchange
rules for its members and standardised the wording
of listings.
According
to the exchange, the most significant change
was the introduction of a new section, Section
VI, in the International Regulations, which
was designed to attract the listing of derivative
warrants, a new market niche for the BSX.
BSX
listings and compliance manager James McKirdy
said: "The changes reflect input provided
by members of the exchange and listed issuers
over an extended consultancy period and experience
garnered by the listings and compliance department
during the last several years.'
Changes
included a streamlining of the prospectus requirements
for secondary listings of International Equity
Securities (Section III). Under the new regulations
issuers may submit their latest audited financial
statements in lieu of a prospectus.
The
exchange also formalised the waiver for disclosure
requirements, as previously granted by the listings
committee on an ad hoc basis, for restricted
market collective investment vehicles, as defined
in Section IV, in respect to the disclosure
of investments and shareholder holdings.
The
Bermuda Stock Exchange (BSX) is a Recognized
Investment Exchange under the Investment Business
Act 2003, and operates as a Self Regulatory
Organization subject to regulation by the Bermuda
Monetary Authority. The BMA is a full member
of IOSCO. The BSX was the first offshore exchange
(in 1996) to receive Designated Status from
the US SEC. The BSX has issued regulations for
Trading Membership, Domestic and International
Listing.
In
July 2004 Bermuda passed the Criminal Code Amendment
Act 2004, which makes market manipulation and
insider trading criminal offenses for the first
time in the jurisdiction. The legislation imposes
fines of up to BMD100,000 and a five year jail
sentence for market manipulation, and a seven
year custodial sentence and BMD175,000 fine
for those found guilty of insider trading.
The
government explained that the new laws were
put in place following reviews of the financial
services sector conducted by the International
Monetary Fund (IMF) and the UK government.
In
August, 2005, BSX was granted Designated Investment
Exchange (DIE) status by the UK Financial Services
Authority (FSA). Designation as a Recognised
Stock Exchange by HM Revenue & Customs (HMRC)
was also awarded in December 2007. This will
give any Eurobond listed on the BSX the same
exemption from withholding on interest payments
that currently exists at EU exchanges.
It
emerged in January 2007 that business on the
Bermuda Stock Exchange had been given a considerable
boost in 2006 after official recognition was
granted by onshore authorities.
In
the second half of 2005, the BSX was granted
both Approved Stock Exchange status by the Australian
tax authority, in addition to the aforementioned
designation by the UK’s Financial Services
Authority.
The
two designations, coupled with the strong international
BSX brand and the recent consolidation activity
in the global stock exchange industry, resulted
in a heightened level of interest in BSX products
and the Exchange itself, the BSX said.
The
BSX/Royal Gazette Composite Index ended the
year at 4,860.32, up 25.1% compared with 2005.
Domestic trading volumes increased from 2.9
million shares to 3.9 million shares with a
corresponding value of over BMD120 million,
one of the highest value turnover levels in
the Exchange’s history.
The
total market capitalization of the BSX as at
31 December 2005 (excluding fund listings) stood
at over BMD350 billion of which approximately
BMD2.6 billion represented the domestic market.
As
at 31 December 2006, 428 issuers were listed
on the BSX. Included in new listings were Jupiter
Adria Limited, an international equity issue
and 3 international derivative warrant issues.
There were also 22 new collective investment
vehicles listed and 49 subsequent issues processed
during the year, including the local BAS and
BF&M Rights issues.
In
making the year-end announcement, BSX President
and Chief Executive Officer Greg Wojciechowski
noted:
“2006
has been a very exciting year for the BSX in
terms of its strategic development. The receipt
of the recognitions noted above has generated
interest in the Exchange and further punctuated
its role as the premier, fully operational offshore
stock exchange. The BSX’s longevity in
this business, its electronic infrastructure,
its prudent regulatory approach and strong brand
will position it well to take advantage of the
exciting opportunities that are now presenting
themselves in the quickly changing global stock
exchange industry.”
The
BSX also reported that 2007 was a significant
year both for the Exchange and the continued
development of the domestic capital market.
Highlights
of the year, according to the Exchange, included
an increasing number of international issuers
and companies listing their securities on the
BSX, record domestic trading volume and the
designation of the BSX by HMRC as a Recognised
Stock Exchange.
The
BSX/RG Composite Index ended the year at 4,969.92,
up slightly from the previous year’s close.
Domestic trading volumes increased from 3.9
million shares to 5.3 million, with a corresponding
value of over BMD165 million, the second highest
value turnover level in the Exchange’s
history.
The
total market capitalization of the BSX as at
31 December 2007 (excluding fund listings) stood
at over BMD350 billion, of which approximately
BMD2.7 billion represented the domestic market.
By
the end of 2009, there were 13,539 external
companies, 1,250 exempted parternships, 588
overseas companies, 68 overseas partnerships,
15 non-resident insurance companies and 3,166
local companies on the register.
As
at 31 December 2010, 807 issuers were listed
on the BSX. Included in the new listings in
2010 was the Variable Note program of Lodestone
Re. The Exchange also listed 124 international
derivative warrants. There were also 55 new
collective investment vehicles listed, and 7
subsequent issues processed during the year.
The
BSX was not immune to the general problems of
stock exchanges in 2008. The Bermuda market
followed the trend by falling 30% in value as
reflected by the BSX/RG Composite Index, which
ended the year at 3417.00, a change of 1,553
points in total. Offsetting this decline was
a market dividend yield of over 5%, which resulted
in a net return of negative 25%. Domestic trading
volumes increased from 5.3 million shares to
6.8 million with a corresponding value of over
BMD99m.
The
total market capitalization of the BSX on December
31, 2008 (excluding fund listings) stood at
over USD226bn of which approximately USD1.9bn
represented the domestic market.
By
the end of December, 2010, total market capitalization
of the BSX (excluding fund listings) stood at
over USD319bn of which approximately USD1.4bn
represented the domestic market. Total trading
volume for the year was 64m shares with a corresponding
value of US$112m.
Designations,
recognitions and affiliations received to date
by the BSX include:
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