This means that effective immediately, anyone holding Bank of Bermuda shares may enter their share holdings into the BSD through a BSD participant. BSD participants include, BSX Trading Members, banks, custodians and other providers of nominee account services.
As of Monday, 18th March 2002, only Bank of Bermuda shares that have been entered into the BSD system will be available for trading on the BSX. This means that anyone wishing to sell bank of Bermuda shares on or after this date will be required to enter those shares into the BSD before initiating a sell order.
The introduction of the BSD, which began 30th November 2001, is being phased over several months. Bank of Bermuda is the third security to be declared depository eligible, following Bank of Butterfield and LOM.
The BSX anticipates all Main Board and Small Cap companies will have become depository eligible by Fall 2002. In the meantime, all non-BSD eligible securities will continue to trade and settle as per current market practice.
The BSX likens the new system which €˜de-materialises' (replaces) share certificates, to electronic banking; in much the same way that electronic banking reduces the need for physical currency, the BSD automates settlement and de-materialises share ownership replacing physical share certificates with electronic, book entry records held in investor accounts within the BSD.
In short, the BSD makes it safer, quicker, easier and cheaper for shareholders to trade and monitor their investments.
De-materialising share certificates is a simple process, shareholders need only present their physical share certificates to a BSD participant, who in turn will arrange for them to be entered in a BSD account in either their name or that of a nominee. Once the position has been entered into
the BSD the physical share certificates will be cancelled and replaced by book entry records that will be reflected in regular account statements from the broker.
The BSX advises that shareholders who do not plan to sell in the near term may continue to hold their physical share certificates for as long as they wish, however the BSX stressed that going
forward, anyone wishing to sell Bank of Bermuda, Bank of Butterfield or LOM shares by way of the Exchange will be required to de-materialise their stock before any sell can be initiated.
The Exchange urges anyone with questions regarding BSD to contact the broker of their choice, or other financial institution, to discuss the matter further.