BSX Granted Designated Investment Exchange Status by the UK's Financial Services Authority

Hamilton, Bermuda - The Bermuda Stock Exchange (BSX) is pleased to announce that it has been granted Designated Investment Exchange (DIE) status by the UK Financial Services Authority (FSA) with effect from 1 September 2005.

Designation by the FSA is a tremendous step forward for the BSX and continues the momentum of recognitions following so shortly after last month's announcement that the BSX had been granted Approved Stock Exchange status by the Australian tax authorities.

In making the announcement BSX Chairman David Brown stated, "The Council of the Exchange is delighted by the FSA's decision to grant the Exchange DIE status. This very important designation is a significant development for both the Exchange and Bermuda's financial services industry.  This, and other international recognitions granted to the BSX, reflect the tireless work undertaken by the Exchange and Bermuda's regulators to ensure that a regime of internationally accepted regulatory and operating standards are implemented and practiced in Bermuda."

Greg Wojciechowski, President & Chief Executive Officer explained, " In our view, designation by the FSA not only represents a significant milestone but a crucial development in the global regulatory recognition of the BSX."  He went on to explain that "in addition to very closely scrutinizing every aspect of the Exchange's regulatory and operating infrastructure, including financial resources, investor safeguards and monitoring and enforcement procedures, the FSA had to be satisfied that the jurisdiction of Bermuda upheld internationally accepted regulatory standards.  During the application process the FSA provided very useful input in respect of the development of our capital market and financial services regulation in Bermuda. We are very confident that the regulatory regime, which is the foundation of Bermuda's financial services industry, is modern, efficient and completely in accordance with internationally accepted regulatory practices."

Mr. Wojciechowski further noted that " Achieving this important FSA designation highlights the effectiveness and results that can be achieved through team work amongst all sectors of the Bermuda business community.  In this regard, I would like to thank the Council and team of the BSX, the Bermuda Monetary Authority, the Ministry of Finance and the Governor of Bermuda for their crucial input, support and guidance during the BSX's designation application process."

Note to Editors:

1)      According to the The Financial Services Authority's (FSA) website, www.fsa.gov.uk, the FSA is an independent body that regulates the financial services industry in the U.K. It has been granted a wide range of rule-making, investigatory and enforcement powers to promote efficient, orderly and fair markets and to help consumers achieve a fair deal.

In furtherance of the above, the FSA has been given the power under the Financial Services and Markets Act to fulfill the following four statutory objectives:

·        Market confidence;

·        Public awareness;

·        Consumer protection; and

·        Reduction of financial crime.

2)      Designated Investment Exchange

As set out in the FSA's Consultation Paper CP0 5/6 submitted in April 2005, The FSA proposed to amend the definition of "designated investment exchange" in its regulatory glossary to include the Bermuda Stock Exchange (BSX).

Under published guidance, the FSA determines whether the investment exchange provides an appropriate degree of protection for consumers, having particular regard to:

·        the relevant law and practice, including the regulatory framework in which the investment exchange operates, in the country or territory in which the

·        investment exchange's head office is situated and any other relevant country or territory; and

·        the rules and practices of the investment exchange.

The importance of the designation is summarized as follows:

·        The list of Designated Investment Exchanges provides UK investors and their brokers with a reference point for those non-UK exchanges which, while not carrying on a regulated activity in the UK, have appropriate standards of investor protection.

·        Second, under certain rules, UK authorized firms may treat transactions effected on a Designated Investment Exchange in the same way as transactions on a recognised investment exchange.  The direct consequence for firms is that these transactions will attract a significantly lower position risk requirement and reduce their costs; and

·        A third benefit is that UK authorized firms may take advantage of the exemptions granted under Rule 30.10 of the US Commodity Futures Trading Commission's Rules and sell investments listed on a Designated Investment Exchange to customers located in the USA.

3)      List of BSX Regulatory Recognitions:

·        UK FSA , Designated Investment Exchange

·        World Federation of Stock Exchanges, Full Member

·        Bermuda Monetary Authority, Recognised Investment Exchange

·        US Securities and Exchange Commission, Designated Offshore Securities Market

·        The London Stock Exchange, Registered Organisation

·        IOSCO, Affiliate Member

·        Australian Tax Authority; Approved Stock Exchange under Australia's Foreign Investment Fund (FIF) taxation rules.

For more information on the BSX, contact the Bermuda Stock Exchange 1-441-292-7212 or info@bsx.com.  Information is also available at www.bsx.com and on Bloomberg at BSX .

The Bermuda Stock Exchange is a fully-electronic offshore securities market founded in 1971.  The BSX lists more nearly 400 securities -- including equities, mutual funds and bonds, as well as depository receipts.