The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange (BISX) wants to obtain a share in each of its listed companies so it can determine if they are meeting their disclosure obligations.

The proposal is among a slew of changes to the exchange’s trading, listing and issuer obligation rules that have been released for a 30-day feedback period, with BISX aiming to make its interactions with the market “faster, cheaper and more digital”.

Keith Davies, BISX’s chief executive, told Tribune Business the proposals were “the first tranche” of changes designed to shake-up and modernise the exchange’s rules that will be rolled-out on “an ongoing basis”.

Among the proposed changes are requirements for BISX’s publicly traded companies to file interim financial statements within 45 days of quarter end, rather than the current 90 days, to bring the exchange’s rules in line with the Securities Industries Regulations 2012.

It is also proposing that companies issue their annual reports and audited accounts “not less than 21 days” before an annual general meeting (AGM), with these details prepared within 120 days of the financial year-end. This, again, is to bring BISX’s rules in line with the Securities Industry Act.

Mr Davies confirmed the changes were intended to eliminate any “inconsistencies” between the law and BISX. “We want to make sure we align ourselves with what the law requires,” he told this newspaper.

“The way the rules are written they’re designed to recognise the Act is paramount. We’re making that simple change.” BISX is also seeking to centralise the distribution of information by its listed companies by proposing that they publish their financial results, material changes and other disclosures via its website “news wire”, eliminating the need to use the newspapers.

“The thinking is to make it easier for people to meet their requirements,” Mr Davies added. “We’re trying to make things faster, cheaper and more digital.”

He told Tribune Business that the requirement for BISX to be provided with a share in each of its listed issuers was something other exchanges had done to ensure they could monitor the timeliness and content of disclosures to investors and the wider capital markets.

“We’ve seen in some jurisdictions that they hold a share in the companies,” Mr Davies said. “It puts the exchange in the flow of information that a company puts out. The company sometimes tells us what it’s going to do, but we’re not part of the sending and delivering process.”

BISX, explaining the rationale behind the proposal, said: “BISX needs to be able to more effectively monitor company communications with their shareholders to ensure that companies meet their regulatory responsibilities.

“The best way to accomplish this is to put the exchange in the same position as any other shareholder through the exchange becoming a shareholder and receiving all shareholder communications under the same terms as other shareholders. Such shareholding would be de minimis and the share will not be voted by the exchange at any general meetings of shareholders.”

The changes also expand the penalties available to BISX should any exchange users break market rules. It said: “The current penalty options limit the avenues that the exchange can take with regards to regulatory actions in response to contraventions of the BISX Rules.”

“Given that we’re regulators for the market and the first line that interacts and deals with companies, the intent is that we have adequate remedies to deal with certain infractions of the rules,” Mr Davies explained.