Bermuda

Canada designates BSX as Island delegation touts for business in Toronto


By added on 18/11/2011

The Canadian Finance Minister has approved the addition of the Bermuda Stock Exchange (BSX) to the list of designated exchanges under the Income Tax Act (Canada), the Royal Gazette reports.

The news comes as the BSX and Business Bermuda prepared to stage the Third Annual Bermuda Briefing in Toronto.

The significance of the designation for the BSX is that it opens the door for Canadians to invest some of their tax-deferred retirement plans and other investments in BSX-listed securities.

BSX chief executive officer Greg Wojciechowski welcomed the news, which comes on the heels of the signing of a tax information exchange agreement (TIEA) between Bermuda and Canada.

“I am confident that these important developments will deepen the long-standing cultural, commercial and capital market ties between our countries,” Mr Wojciechowski said.

“We are grateful to Canada’s Department of Finance for the guidance that has been provided to us during the designation process.”

In 2005, the Canadian Government removed the foreign content limit on tax-deferred retirement plans prompting an increasing number of Canadian investors to look to foreign securities listed on foreign exchanges to enhance their returns and diversify the investments held in their Canadian Registered Retirement Savings Plans (RRSPs) and Deferred Profit Sharing Plans (DPSPs).

The addition of the BSX to the Designated Stock Exchange list now opens up the opportunity for Canadian investors to include BSX-listed securities in the investment portfolios of their RRSPs and DPSPs.

Mr Wojciechowski said yesterday that the designation highlighted the fact that the Island had a fully deployed stock exchange more developed than those of rival offshore financial centres like the Cayman Islands and one which met international regulatory standards.

He added that the designation acknowledged the fact that BSX-listed securities trade on a well-governed, regulated and transparent market which allow them to be qualified investments for tax-deferred retirement plans in Canada.

During its 40-year history, the BSX has grown to become the world’s largest offshore, fully electronic securities exchange.

Mr Wojciechowski added that he was giving an interview with the Canadian Broadcasting Company about the agreement and today’s event, amid much media interest.

Also in Canada over the past two days was a delegation from the Bermuda Insurance Development Council, which spoke to corporate audiences in Toronto and Montreal about the advantages of setting up a captive insurance company in Bermuda. The spin-off tax benefits of the TIEA has made Bermuda more attractive as a domicile for subsidiaries of Canadian companies.

The programme for today’s event will consist of two panel briefings. The first briefing will provide detailed information on financial services cross-jurisdictional opportunities and the impact of the TIEA. The second panel will assess the mutual opportunities for Canada and Bermuda in the areas of asset management, captive insurance and Islamic Finance.

Participants include Mr Wojciechowski, Pamela Burrows, Assistant Financial Secretary (International Business), Andy Jobst, chief economist of the BMA, Brendan Caldwell, CEO of Caldwell Investment Management, and Steve Woodward, partner, enterprise for KPMG, as well as other professionals from both Canada and Bermuda.