The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange (BISX) is heading to Brazil “to solicit recognitions” from that jurisdiction’s major regulators, after Latin America’s “doors were opened” by this nation attaining the top international securities industry ranking.

Keith Davies, BISX’s chief executive, told Tribune Business that the Bahamas obtaining ‘Category A’ status with the International Organisation of Securities Commissions (IOSCO) was “a huge win” for both the exchange and funds/capital markets industry generally.

He explained that ‘Category A’ status had been an essential “precursor” before BISX could approach Brazil and other countries for ‘recognitions’ that would allow the exchange, and its members and products, easier access to their financial markets.

Now armed with that critical designation, Mr Davies said BISX would move rapidly to capitalise on it, and use Brazil as a springboard to obtain recognitions from other Latin American countries.

“It’s a huge win for the country and, by extension, for us,” Mr Davies told Tribune Business of the IOSCO ‘Category A’ designation. “I know that we will move very quickly to capitalise on the designation, and now that we have it we will be going to Brazil to solicit recognitions by that jurisdiction.

“We were waiting for this [IOSCO] designation, and that is a precursor before approaching them, so we will be doing it imminently. It is another benefit to us, and Brazil being what it is in Latin America, is something we feel will open doors in other countries in the region and enable us to expand our area, our reach.

“We see Brazil has everything we’re looking for in terms of opportunities, access and new product development for us to go into that jurisdiction.”

IOSCO’s Category A status acts as the benchmark by which other jurisdictions provide access to a nation’s securities industry participants and products. Before the Bahamas achieved it, there was the prospect of some countries placing impediments in the way.

This, of course, acted as a potential barrier to BISX’s access to overseas markets, something that inhibited a business strategy that always viewed international expansion as key to the exchange’s success, given the relatively limited size of the Bahamian capital markets

Mr Davies told Tribune Business that BISX would analyse each jurisdiction it looked at to determine whether ‘recognitions’ would benefit it, its existing and future members. Some countries also recognised regulators, rather than exchanges.

Confirming that BISX would use Brazil, and the Bahamas’ ‘Category A’ status, to explore South American opportunities, Mr Davies said: “Definitely we will be canvassing the region to determine who we go to next.

“Now we have it [Category A], it’s up to us to capitalise on it and meet other requirements there might be for us in these jurisdictions. Before that designation, this was a non-starter for us.”

BISX has already obtained recognitions from three foreign regulators - the US Securities & Exchange Commission (SEC); the UK’s Her Majesty’s Revenue and Customs (HMRC); and IOSCO itself.

Mr Davies explained that these recognitions, particularly the one from the SEC, showed that these overseas regulators were happy with both the Bahamas and the exchange, particularly their operations and regulatory environment.

“It’s almost a stamp of approval, a certification that we’re happy you meet our criteria and we’re happy to do business with you,” Mr Davies said. “It’s really a benchmark of the jursidiction, heightens your profile, legitimises you to some extent, and enables us to access that jurisdiction.”

Financial services providers and investors in those jurisdictions that had recognised BISX were being given the message it was fine to speak to the Bahamian exchange and transact business with it.

But, with ‘Category A’ status now in the bag, Mr Davies urged the Bahamas to now do “the heavy lifting” by informing overseas jurisdictions about what it stood for and its capabilities. It also needed to make sure it provided the proper service delivery.

“We still have to prove ourselves and be excellent in everything we do,” the BISX chief executive said.

The Government announced last Thursday that IOSCO had granted the Bahamas the ‘Category A’ status it has long sought.