The Bermuda Stock Exchange (BSX) was established in 1971, primarily as a domestic equities market. As the Island's international financial sector grew so too did the Exchange and in 1992 the company was restructured into a demutalised, for -profit entity.

Today, the BSX is the world's largest offshore, fully electronic securities market offering a full range of listing and trading opportunities for international and domestic issuers of equity, debt, depository receipts, insurance securitization and derivative warrants.

The Bermuda Stock Exchange's significant growth over the last several years is due in large part to the company's innovative and flexible approach in the creation of unique products and services for its niche offshore market.

A case in point is the Exchange's "Mezzanine Market" (www.mezzmarket.com), a unique pre-IPO listing for start-up, high growth-potential companies.

The success of the Mezzanine Market is due in large part to the fact that the BSX restricts listing on this board to 'Qualified Investors'. This means that access is limited to institutional and or sophisticated investors only. In this way, the BSX can rely more on full disclosure than prescriptive regulations for investor protection purposes.

In addition to the Mezzanine Market the BSX supports an active domestic market that trades daily, Monday through Friday and a robust after-hours crossing market for large institutional block trades. It is one of the world's leading listing facilities for offshore funds and alternative investment vehicles and supports niche markets for specialized insurance and debt products.

Trading on the BSX is executed through the Exchange's customized trading system, BEST (Bermuda Electronic Securities Trading), a fully automated system based on a central limit order book model. Once executed, trade information is disseminated electronically to key financial information providers Bloomberg and Reuters for worldwide distribution. Thus creating a transparent, liquid and global market for Bermuda.

At the close of 2001 the BSX introduced the final phase of its electronic build out with the introduction of the ' Bermuda Securities Depository' (BSD), Bermuda's national securities depository.

The introduction of the BSD is a natural progression for the Exchange, which, as a full member of the World Federation of Exchanges, is committed to meeting and exceeding international securities market standards.

Another contributing factor to the Exchange's success is the BSX's 'light but effective' regulatory environment which makes it conducive to new and innovative product listings, especially 'institutional only' securities.

As a full member of the World Federation of Exchanges (formally the FIBV) the BSX has been acknowledged by its peers in meeting industry accepted regulatory and operational standards. Similarly the US Securities Exchange Commission recognises the BSX as a 'Designated Offshore Securities Exchange' (DOSM).

While all these initiatives, products and recognitions help to explain the Exchange's steady growth, they do not tell the whole story. Location, a world-class reputation and the flexibility to move rapidly with the times have also contributed significantly to the Exchange's success to date.

Bermuda has earned a reputation as a world-class centre of commerce, featuring a business-friendly environment, a stable and growing economy, and an unmatched collection of talent and intellectual capital in key sectors, including insurance, financial services, and, more recently, electronic commerce.

Bermuda's regulatory and legal systems (British Common Law) have evolved over the years, not only facilitating business, but also allowing it to flourish. The island offers international companies a sophisticated high-tech infrastructure and is rich in intellectual capital.

The Government works closely with Bermuda's international business community to develop laws & regulations that enhance the business environment in Bermuda. Similarly, Bermuda's telecommunications infrastructure and high technology backbone provide maximum bandwidth, with full redundancy, to the island, enabling Bermuda to accommodate rapidly growing global electronic commerce and communication services.

Bermuda is a truly offshore financial center, with a sterling reputation. Located just seven hundred miles off the US eastern seaboard and less than seven hours by air from London the Island is both geographically and legislatively independent and neutral, making it an ideal hub for international finance.

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