The Bahamas International Securities Exchange (BISX) has carried out numerous initiatives during the period 2007 – 2008 to foster the continued growth and development of the Bahamian Capital Markets. As a basis, BISX believes that the best way to foster growth in the Bahamian Capital Markets is by:

* offering improved, value-added services to BISX Broker-Dealer Members,

* lowering the cost of capital to issuers,

* offering increased value-added services to corporate services providers, and

* increasing the number of investment alternatives available to investors.
The initiatives that have taken place over the last two years will allow the Exchange, market participants and the jurisdiction to reap significant benefits in the future.

BISX believes that the following developments are especially significant:

##New Securities Trading System – QuickTrade##

During July 2007, BISX migrated from the Horizon trading platform to the QuickTrade trading platform which is developed and distributed through a software development group based in Ljubljana, Slovenia, and is used by stock exchanges throughout that region. The QuickTrade system is a robust, scalable PC-based trading system that provides the system’s users access to information and enhanced trading parameters. The QuickTrade System includes features and modules, which allow users access to more information and other value-added services than were available with Horizon.

Before being introduced to market participants, QuickTrade went through a rigorous due diligence process that included acceptance testing and customizing the system to comply with the BISX Trading Rules. BISX managed to make full use of internet and secured Virtual Private Networking technology to test, train and install the new trading system from the supplier that was based several thousand miles and time zones away. This reduced the overall cost to BISX and greatly reduced the time-to-market for the launch of the new trading system.

After customizing the system to comply with the BISX Rules, the BISX Staff trained BISX Broker-Dealer Members in the new system in order to ensure an orderly transition to the new trading platform. BISX firmly believes that the right tools are necessary to facilitate capital market growth in the Bahamas and that the new QuickTrade System enables the Exchange to provide value added features for market participants well into the future.

##Growth in Mutual Fund Listings ##

As at June 30, 2008 there were 21 mutual funds listed on the Exchange. This is a marked increase compared to December 31, 2005 when only 9 mutual funds were listed on the Exchange. Over this time period, BISX has demonstrated to both international and domestic issuers that the BISX Mutual Fund Listing Facility is a value-added tool that enables issuers to achieve a higher level of compliance with respect to regulation and compliance.

A fundamental element that drives the mutual fund listing facility is the fact that BISX has focused primarily on small sectors within the mutual fund community and has had success with identifying and attracting certain funds to list on the Exchange. The focus within BISX has been on bringing a value-added product to issuers seeking an Exchange listing, and one of the ways that the Exchange went about this was benchmarking the time required to complete each aspect of the listing process. As a result of this exercise the Exchange introduced more efficient procedures and processing techniques that enabled it to list funds more swiftly, as well as simplify the listing process for issuers.

BISX has also shown the Mutual Fund Listing Facility to be adaptable to various corporate structures and currency denominations after listing funds whose underlying corporate structures range from companies formed under the Companies Act, 1992 and the International Business Companies Act, 2000 to more complex corporate structures including companies formed under the Segregated Accounts Companies Act, 2004. The various corporate structures available to foreign and domestic issuers means that corporate service providers are able to create structures that meet the exact needs of an issuer in this jurisdiction.

BISX also welcomed FG Capital Markets Ltd. and Credit Suisse Nassau Branch to the roster of BISX Sponsor Members during the period 2007-2008. BISX Sponsor Members are specialist Members of the Exchange that introduce mutual fund applications to the Exchange and certify that the fund application is in compliance with the BISX Rules. These new members bring the total number of BISX Sponsor Members to five. The other Sponsor Members are KPMG Corporate Finance, Royal Fidelity Capital Markets (previously Fidelity Capital Markets) and CFAL Securities Ltd.

##International Investment Products##

On January 13, 2006 the Central Bank of The Bahamas (the Central Bank) proposed Exchange Control Liberalization procedures that allowed BISX Broker-Dealer Members to structure international investment products for Bahamians. Under the liberalized Exchange Control procedures, BISX Members can apply at quarterly intervals to receive foreign currency allocations from the Central Bank to structure these international investment products for Bahamians provided that these products are listed on the Exchange. This marked an evolution in the Bahamian Capital Markets as previously Exchange Controls essentially restricted Bahamian investors to Bahamian-based securities.

In the fourth quarter of 2007, the Central Bank provided BISX Members with the option to access the first allocation of foreign currency to structure these international investment products. Two BISX Members; Royal Fidelity Capital Markets (Royal Fidelity) and CFAL Securities (CFAL) elected to take advantage of this option, creating investment products that allowed Bahamian investors to access international capital markets for the first time.

BISX now lists five international funds created by its members that allow Bahamians exposure to debt, equity and index-linked investments in the United States, Japan, Europe and other international emerging markets. Michael Anderson of Royal Fidelity noted: “This listing gives Bahamians an opportunity to diversify their portfolio into the international markets without having to go through the investment currency pool (that they otherwise would have to go through). The fund provides the Bahamian investor with the opportunity to invest overseas using professional, time-proven investment managers thus eliminating the need for the Bahamian investor to navigate through a large universe of investment products.”

##Listing of Secondary Issues##

On June 9, 2008 Freeport Oil Company Ltd. (FOCOL) listed their Class B, Preference Shares on the Exchange becoming the first BISX-listed issuer to list a secondary issue on the Exchange. Secondary issues include any securities issued by a company after their initial public offering, including corporate bonds, warrants and preference shares. Once listed on the Exchange, these securities are subject to the same listing, continuing obligations and trading rules as any other listed primary issue.

FOCOL’s listing was the end result of consultation between BISX and the Securities Commission on means of deepening the Bahamian Capital Markets. During this consultation period it was decided to allow BISX listed issuers to list any of their secondary issues on the Exchange without being required to register the prospectus of these issues with the Securities Commission of The Bahamas. As a result of this exemption, listed issuers are able to list their secondary issues on the Exchange while avoiding the cost and time requirements that the issuer would face registering the prospectus for these issues with the Commission.

Listing these secondary issues will allow the securities’ issuers and investors some advantages not enjoyed by the issuers and investors of unlisted secondary issues, namely:

o A Lower cost of financing compared with an issuer of unlisted securities: the issuer will in many cases benefit from a lower cost of capital than would be possible from private or bank financing.

o Improved access to capital: with a market based track record, an issuer will be able to access capital more easily in the future based on their listing and subsequent market pricing of their secondary issues.

o Price discovery and transparency: investors of unlisted securities often have difficulty determining what their securities are really worth, with listing and transactions taking place at one centralized trading location investors benefit from transparency and price discovery on a regulated exchange.

##BISX Global##

On June 16, 2008 BISX unveiled BISX Global, an international initiative that the Exchange is carrying out with a targeted consortium of global financial services companies to create a new platform focused on unique opportunities in the offshore capital markets. BISX Global is a joint venture which marries product development teams and investment product specialists from around the globe. BISX Global will capitalize on the fact that The Bahamas is one of the world’s leading offshore jurisdictions and partner with the Exchange which is fully licensed to operate in the jurisdiction.

BISX Global will capitalize on the increased benefits of independently priced and listed products in an offshore environment that delivers significant tax and regulatory advantages. BISX Global and BISX will work together to transform our local primarily domestically-focused exchange into a premier meeting place for global products and international capital.


BISX was incorporated in 1999 and has been steadfast in its desire to foster the continued growth and development of capital markets in The Bahamas. BISX remains committed to its mandate to create a state-of-the-art Exchange for the delivery of innovative and efficient financial services. The Exchange has expanded its scope to include the intent to bring value-added products and services to all areas of the Bahamian capital markets. The achievement of this goal has continued over the last two years and is shown by the successes garnered by BISX during this time. At BISX we expect that our continued application of international best practises, and our willingness to employ the use of new technology and operational techniques within the securities market will all bode well for our future and the achievements yet to come.