The importance of resilience for businesses and communities around the world has become a primary concern during the last few years as a result of climate change and, more recently, the COVID-19 pandemic.
Celebrating 50 years of operations this year, resilience was built into the BSX platform from inception as a fully electronic exchange. As such, the pandemic had minimal impact on operations and the BSX has recently seen a number of exciting developments and record growth in core and new businesses, helped by strategic partnerships.
A significant development was Miami International Holdings, Inc. (MIH), the parent holding company of the Miami International Securities Exchange Group (MIAX), acquiring a majority ownership of the BSX in late 2019 and full ownership at the end of 2020. This acquisition has served to assist MIH in expanding its world-class technology, derivatives trading and regulatory expertise to address emerging markets, such as digital assets, and provide the BSX with additional support in the evolving global reinsurance risk market.
Since the launch of its first securities exchange in 2012, MIH has been a generator of technological innovation by creating the MIAX Exchange Group, a comprehensive exchange group that has challenged legacy trading platforms. MIH’s three options exchanges — MIAX, MIAX Pearl and MIAX Emerald - provide access to approximately 80 per cent of the overall US options market volume.
As MIH looks to establish its international presence and address emerging markets such as digital assets, the Bermuda government’s commitment to FinTech regulation with legislation such as the Digital Asset Business Act 2018, coupled with Bermuda’s established international business market, make the BSX and the country of Bermuda, as a whole, very attractive. The alignment with MIH better positions the BSX to compete and serve customers across a broad range of asset classes by uniting brands, expertise and infrastructure.
Bermuda is known as the World’s Risk Capital for good reason. For more than 70 years, Bermuda has been at the forefront of innovation in the insurance and reinsurance world thanks to collaboration between market participants and the island’s regulator, the Bermuda Monetary Authority (BMA).
Bermuda’s expertise in the (re)insurance market ensured that the BSX continues to be the global leader for the creation, support and listing of cat bonds and Insurance Linked Securities (ILS). These vehicles are the very essence of providing resilience to businesses, municipalities and countries around the world as they recover from disasters such as hurricanes and wildfires.
This maturing market, now more than a decade since Bermuda’s introduction of the special purpose insurance legislation in 2009, continues to grow in size and scope of risks covered. Bermuda’s regulatory and supervisory framework also provides for the creation of sidecars, Industry Loss Warranties (ILWs), and collateralised reinsurance vehicles.
In the first half of 2021, the BSX listed 165 new securities with total nominal value of US$12.930 billion. At the end of Q2 of this year, the Exchange had 688 ILS securities listed with a total nominal value of US$48.985 billion or 95 per cent of the global market of US$1.5 billion.
While having a history of supporting traditional capital market activity, the BSX is also forging new paths in the digital world. In September 2020 the BSX listed the Hashdex Nasdaq Crypto Index ETF, an open-ended investment fund that works as a traditional Exchange-traded Fund (ETF), with a creation and redemption mechanism involving the delivery of a basket of assets or cash by authorised participants. It tracks the Nasdaq Crypto Index to represent the institutional investable landscape of cryptocurrency assets.
The ETF listing was the first structure of its kind to list on the BSX, and dovetails with the BSX’s longer-term strategy to support and seek opportunities in the developing FinTech industry. Through its ownership interest in the BSX, MIH will provide additional support to the evolving FinTech, InsurTech and global (re)insurance market on a global scale.
More recently, in June this year, the BSX joined the Pyth Network, a decentralised financial market data distribution platform running on an Oracle network, designed to provide high fidelity financial market data to the blockchain industry using a blockchain protocol on the Solana network. The BSX has subscribed to US equity market data from the MIAX Pearl Equities exchange and expects to begin publishing this data through its independent node to the network in mid-July.
The BSX is positioned to play a unique role in the evolution of the DeFi ecosystem through leveraging capabilities in the digital asset industry and expanding the breadth of market data services offered to global capital markets.
The BSX has also embraced resilience in respect of Environmental, Social and Governance (ESG) issues and in May this year, the Exchange joined the United Nations (UN) Sustainable Stock Exchanges (SSE) initiative as a Partner Exchange. The SSE fosters peer-to-peer learning and exploring how exchanges, in collaboration with investors, regulators, and companies, can enhance corporate transparency – and ultimately performance – on ESG issues and encourage sustainable investment.
Bermuda’s insurance and reinsurance industry continues to be a global leader in climate finance and ILS which are addressing the global protection gap – those corporate entities, municipalities and countries that are uninsured or under-insured – and the BSX will continue to be a leading exchange in providing the platform for resilience and recovery in a rapidly changing physical and digital world.
For further information regarding the BSX, please visit www.bsx.com.
Gregory A. Wojciechowski
Greg Wojciechowski is President and Chief Executive Officer of the Bermuda Stock Exchange (BSX). He is also, the Chairman of the Financial Intelligence Agency in Bermuda, past-Chairman of ILS Bermuda Ltd. and sits on the Board of Directors of the World Federation of Exchanges (WFE) and the Bermuda Business Development Agency (BDA). Prior to assuming the role of President and CEO in January 2002, Greg Wojciechowski was the Exchange’s Chief Operating Officer. In this capacity, he was responsible for the development of the Exchange’s regulatory and operational infrastructure as well as the day to day running of the Exchange. Prior to joining the Bermuda Stock Exchange in 1993, Mr. Wojciechowski, over a period of several years, held management positions at three large U.S. brokerage firms. During this time his attention was focused on brokerage administration and operations in the global equity and fixed income capital markets. Mr. Wojciechowski was educated in the U.S. and received a Bachelor of Arts degree from the University of North Carolina at Charlotte. He has studied International Business at The University of Copenhagen under Denmark’s International Studies Program and has studied French and International Relations at the Universite D’Aix-Marseille (Institut Pour Etudiants Etrangers) in Aix-en-Provence France. In 1998 Mr. Wojciechowski attended and completed the Young Managers Programme at INSEAD in Fontainebleau, France.