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Home  >  Fundamental analysis  >  World exchanges  >  Bermuda Stock Exchange (BSX)


Bermuda Stock Exchange (BSX)



The Bermuda Stock Exchange (BSX) was established in 1971, primarily as a domestic equities market. However as the Island's international financial sector grew so too did the Exchange and in 1992 the company was restructured into a demutalised, for -profit entity.

Today, the BSX is the world's largest offshore, fully electronic securities market offering a full range of listing and trading opportunities for international and domestic issuers of equity, debt, depository receipts, insurance securitization and derivative warrants.

The Bermuda Stock Exchange's significant growth over the last several years is due in large part to the company's innovative and flexible approach. In addition to taking a leading role in what has become a world trend towards profitability and demutalisation, the Exchange has sought to create unique products and services for its niche offshore market.

This is due in large part to the fact that the BSX restricts Mezzanine Market investment to 'Qualified Investors'. This means that access is limited to intuitional and or sophisticated investors only in this way, the BSX can rely more on full disclosure than prescriptive regulations for investor protection purposes.

In addition to the Mezzanine Market the BSX supports an active domestic market that trades daily, Monday through Friday and a robust after-hours crossing market for large institutional block trades. It is one of the world's leading listing facilities for offshore funds and alternative investment vehicles and supports niche markets for specialized insurance and debt products.

Trading on the BSX is executed through the Exchange's customized trading system, BEST (Bermuda Electronic Securities Trading), a fully automated system based on a central limit order book which allows Trading Members to trade both equity and fixed income securities on an equal, real-time 'first come, first served' basis. Once executed, trade information is disseminated electronically to key financial information providers Bloomberg and Reuters for worldwide distribution. Thus creating a transparent, liquid and global market for Bermuda.

At the close of 2001 the BSX introduced the final phase of its electronic build out with the introduction of the ' Bermuda Securities Depository' (BSD), Bermuda's national securities depository.

The move is a natural progression for the Exchange, which, as a full member of the World Federation of Exchanges, is committed to meeting and exceeding international securities market standards. Since the late 1980s 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.

Bermuda has earned a reputation as a world-class centre 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.

Bermuda's regulatory and legal systems (British Common Law) have evolved "over the years", not only facilitating business, but also allowing it to flourish. The island offers international companies a sophisticated high-tech infrastructure and is rich in intellectual capital.

The Bermuda Government works closely with Bermuda's international business community to develop laws & regulations that enhance the business environment in Bermuda. Similarly, Bermuda's telecommunications infrastructure and high technology backbone provide maximum bandwidth, with full redundancy, to the island, enabling Bermuda to accommodate rapidly growing global electronic commerce and communication services.

Bermuda is a truly offshore financial center, with a sterling reputation. Located just seven hundred miles off the US eastern seaboard and less than seven hours by air from London the Island is both geographically and legislatively independent and neutral, making it an ideal hub for international finance.

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