BSX Granted Designation As A Recognised Stock Exchange By The United Kingdom's HM Revenue And Customs

Hamilton, Bermuda, December 6, 2007 - The Bermuda Stock Exchange (BSX) is pleased to announce that with effect from 4 December 2007, the Board of the United Kingdom's HM Revenue and Customs have designated the Bermuda Stock Exchange as a "recognised stock exchange" under section 1005 (1) (a) and (1) (b) Income Tax Act 2007 as amended by Schedule 26 to the Finance Act 2007.  The designation extends to the entire Bermuda Stock Exchange and as such securities listed will meet the HMRC interpretation of "listed" as set out in Section 1005 (3) (a) and (3) (b) Income Act 2007 as amended by Schedule 26 to the Finance Act 2007.

Designation by the UK's Revenue and Customs is a significant development for the BSX that expands the services provided by an offshore stock exchange to unprecedented levels. 

In making the announcement, BSX Chairman David Brown stated:  "The BSX embarked on a path in the 1990's to create a fully operational, modern stock exchange platform in the offshore region which is well regulated and globally recognised.  Today's announcement is further evidence of the BSX commitment to fulfill this goal."

He went on to note:  "Designation not only required due diligence and detailed analysis of the BSX by HM Revenue and Customs during the application process, but also the involvement and support of Bermuda's Minister of Finance, her Financial Secretary and the Ministry for which the Council and staff of the BSX is grateful.  I must also congratulate the BSX team who have diligently and professionally pursued this important designation for several years."

Greg Wojciechowski, President & Chief Executive Officer explained:  "The BSX is delighted to have achieved and been granted this very important designation by HM Revenue and Customs.  BSX clients have asked for the Exchange to seek this designation as they have indicated an interest in having their investment universe of "qualifying investments" expanded or in other instances to have an alternative to the current listing venues for the listing of their Eurobond or debt products.  We are proud to have been able to deliver on both counts and look forward to further growing the international business of the Exchange."

Editors Notes:

Recognised Stock Exchange:

1. The term "recognised stock exchange" occurs throughout the Taxes Acts and in various tax regulations. For example it is used in the definition of a close company in section 415 Income and Corporation Taxes Act (ICTA) 1988, and in the definition of investments which may be held in PEPs and ISAs.

2. The term is often used in the phrase "listed on a recognised stock exchange" or in similar or related expressions. For all designations following the enactment of Finance Act 2007 on 19 July 2007 we will publish which markets meet the HMRC definition of €˜listed' as set out in paragraph 3 below'. For designations prior to 19 July 2007, please contact HMRC at the number below if there is doubt about whether a particular market of a recognised stock exchange would meet the HMRC definition of €˜listed'.

3. The phrase "listed on a recognised stock exchange" in respect of shares and securities is now defined at section 1005(4) Income Tax Act (ITA) 2007 and means shares and securities which are admitted to trading on that exchange and included in the official UK list maintained by the Financial Services Authority as the UK Listing Authority or are officially listed in a qualifying country outside the UK in accordance with provisions corresponding to those generally applicable in EEA states.
4. The definition of a recognised stock exchange is given in section 1005(1) ITA. It includes any market of a recognised investment exchange designated as a recognised stock exchange by an order made by the Commissioner for HMRC and any market outside the UK designated in such an order.
5. Recognition under section 1005 ITA is for tax purposes only and confers no other status on the exchange concerned: it does not constitute any form of recognition or approval for regulatory or other purposes nor does it provide any form of approval or recommendation of any of the investments which are listed or traded on that exchange.
6. The approach to the recognition of stock exchanges overseas announced in the policy statement published at PBR on 27 November 2002 has not changed. HMRC will consider recognition on receipt of a request made by an overseas stock exchange so, the fact that a particular exchange is not recognised may simply mean that recognition has not been requested.
7. Section 48A(3) Finance Act (FA) 2005 requires €˜alternative finance investment bonds' (Shari'a-compliant financial instruments commonly known as €˜sukuk') to be listed on a recognised stock exchange. An alternative finance investment bond listed on an exchange recognised under section 1005 ITA will meet this requirement. In addition, certain other exchanges are designated only for the purposes of section 48A FA 2005. An alternative finance investment bond listed on such an exchange will meet the listing requirement in section 48A(3) FA 2005, but the exchange is not a recognised stock exchange for any other purpose. Designation has effect from 1 April 2007. Please see the table Recognised Stock Exchanges solely for the Purposes of section 48a(3)