Well prepared for capital market expansion
Bermuda has weathered the global capital markets storm well, thanks to the vigilance of its government and regulators. Its regulatory infrastructure continues to develop in concert with international standards, making it a jurisdiction that is well prepared to withstand the difficult challenges currently being experienced around the globe as a result of this extended market dislocation.
One thing is certain: Bermuda is going to do whatever it takes to ensure to the best of its ability that the interests of businesses operating in and from its shores are protected from systemic pressures. In my mind, this is the best form of customer service a country and its regulatory framework can provide to its clients and others who depend on its services.
Historically, Bermuda was seen as a captive insurance jurisdiction. However, over the last 15 years, Bermuda has evolved to become a global leader in reinsurance and now supplies 40% of the U.S. and European market property catastrophe reinsurance coverage. Bermudan reinsurers rank 13 out of the top 40 in the Standard and Poor's rankings and 15 out of the top 35 AM Best reinsurance firm rankings. At the end of 2006 (the most recent tally available), the Bermuda Monetary Authority reported over 1,400 insurance and reinsurance companies on its register, with over USD100bn in assets. Over time, real estate firms and fund managers have joined the expanding roster of financial services companies that operate here.
The mainstays of Bermuda's strength as a leader in the offshore financial services industry can easily be traced to the jurisdiction's longevity in the business. As one of the early pioneers in the offshore financial services business, Bermuda has developed a commercially sensible level of regulation based upon years of experience, and has created products to meet the needs of its sophisticated client base. Bermuda's experience has produced a deep and knowledgeable infrastructure of service providers including global fund administrators, attorneys, banks, auditors and the Bermuda Stock Exchange. It has continued to evolve in order to meet the requirements of its sophisticated and selective client base.
Take the recent example of the 'Launch 'n' List' product, the result of collaboration between the Bermuda Monetary Authority, Bermuda International Business Association and Bermuda Stock Exchange. It was created to combat rising frustration among practitioners over the lengthy process to establish, domicile and list in Bermuda. Launch 'n' List eliminated duplication in the process, thereby reducing the amount of time required to bring a security to the market.
Such innovation has fueled the development and success of the Bermuda Stock Exchange, originally established in 1971. Its goal is to balance issuers' need for speed and investors' safeguards and timely information that will enable them to make informed investment decisions based on the value, risk and merit of the listed securities. It has over 650 listed issuers, of which over 300 are hedge funds or have hedge fund attributes, with a combined market capitalisation of nearly USD200bn. It has seen interest rising in listing of fixed income products and derivative warrants. Additionally, it trades and settles stock and cash transactions daily through its electronic trading, settlement and depository systems.
Bermuda's robust regulatory setup, coupled with its strategic geographical location and internationally recognised electronic stock exchange platform, places the Bermuda Stock Exchange in a very exciting position to take advantage of rapidly changing and expanding global capital market opportunities.
By Greg Wojciechowski, President & Chief Executive Officer, Bermuda Stock Exchange
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