Established in 1971, the Bermuda Stock Exchange (BSX) is the world's preeminent, fully electronic, offshore securities exchange, offering domestic and international issuers an affordable and well-regulated listing venue. The BSX has over 1,400 securities listed and has a growing position in international debt listings.
The total number of securities listed on the BSX at year-end was 1,407, a record number for the Exchange. The BSX grew its international debt listings in 2023 with 269 debt securities listed at year-end, a nearly 7% increase from 2022.
The BSX is a full member of the World Federation of Exchanges (WFE) and currently holds a seat on the WFE's Board of Directors. The Exchange hosted the WFE's 62nd General Assembly and Annual General Meeting in September 2023, an event which brought 230 participants to Bermuda from 45 countries for three days of discussion on issues affecting global exchanges.
The Exchange is also a member of America's Central Securities Depository Association (ACSDA) and an affiliate member of the International Organization of Securities Commissions (IOSCO). The BSX is globally recognised and respected for its commercially sensible listing requirements.
As on offshore exchange the BSX is not bound by, or subject to, any EU directives or regulations, including the EU Market Abuse Regime. The BSX has recognised stock exchange status with Revenue Irish Tax and Customs and the UK HM Revenue and Customs (HMRC). The BSX's Irish Revenue and HMRC designations enable issuers to take advantage of the 'quoted Eurobond exemption', allowing issuers to pay interest without deduction of withholding tax.
In addition to recognition by Irish and UK tax authorities, the BSX is a designated offshore securities market by the SEC, a designated stock exchange under the Canadian Income Tax Act and an approved stock exchange under the Australian Foreign Investment Funds Taxation Rules.
The BSX's location, one hour ahead of New York and four hours behind London, provides further support for onshore teams in those important financial centres. A legal team working to close a transaction late in the evening in London or in Europe can still reach Bermuda counsel and the BSX's listing team, should any urgent questions arise.
Insurance-Linked Securities
The BSX is the established global leader in the insurance-linked securities (ILS) market. Insurance-linked securities are investment assets which have less correlation with the general financial market as their performance is related directly to insurance risks, such as life and health insurance risks, natural disasters and cyber risk.
Insurance-linked securities are typically invested in by institutional investors. As securities, some insurance-linked securities − mainly the sub-class of catastrophe bonds − are able to be traded on the secondary-market and allow insurers and reinsurers to use these markets to share risk and raise capital.
In January 2024 the BSX announced 195 new ILS listings in 2023 with a nominal value of $59.15 billion, increasing the total to 849 insurance-linked securities on the Exchange, representing 91% of global ILS listings.
Listing Process
After appointing a listing sponsor, issuers and their advisers need to compile and submit the key listing documents: such as an application letter, offering/prospectus document and BSX wrapper (if applicable), constitutional documents, audited accounts (if available) and directors' KYC. The documents may be submitted in draft form. Following BSX review of the application, the Exchange will provide an approval in principle or preliminary approval.
Further listing documents include the following: material contracts referenced in the offering document and undertakings from the directors, issuer and listing sponsor undertaking – but these are typically not required to obtain the Exchange's approval in principle.
Once the Exchange's preliminary approval is obtained, all that remains is to provide final forms of the application and offering document, together with any outstanding listing documents, in order to obtain the Exchange's final approval and admission to listing of the issuer's securities.
As we look ahead to the BSX continuing to cement its position as a key provider of international debt listings in the coming year, we also look forward to seeing further cooperation and mutual support between Bermuda's legal community, listing sponsors and the Exchange.
This article was originally written for Bermuda Business Review 2024-2025.
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