Bermuda: Offshore Business Sectors
This page was last updated on 6 August 2019.
The Bermuda Stock Exchange (BSX) opened in 1971. It is a fully electronic open market with daily trading and centralised settlement. Since the 1970s, BSX has been owned by three Bermudian 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 the domestic securities listed on the BSX at that point were depository eligible.
The BSX has also in recent years introduced new regulations designed to make listing on the exchange easier and clearer. The exchange said 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.
Changes included a streamlining of the prospectus requirements for secondary listings of international equity securities (Section III). Under the new regulations issuers were given permission to 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.
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 (BMA), which is a full member of the International Organization of Securities Commissions. 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.
The BSX lists various types of debt security including Eurobonds, which, by their nature, are purchased and traded mainly by a limited number of institutional investors who are generally very knowledgeable in investment matters. The BSX listing regulations are streamlined and rely more on full disclosure than prescriptive regulations for investor protection purposes. This means that debt listings can be completed within a matter of days. Only new applicants to the BSX require the assistance of a BSX Trading Member or Listing Sponsor. Subsequent issues are not required to be sponsored. Debt securities must be eligible for deposit in Euroclear, Cedel, the Depository Trust Company or the BSX’s GlobalScrip system or some other settlement system acceptable to the BSX.
BSX has pages on Bloomberg and Reuters on which investment fund prices, NAVs and deals are displayed daily. BSX also offers the Offshore Funds Network through its own web server on which each fund can have its own page.