Bermuda delegation takes Toronto by storm

Bermuda delegation takes Toronto by storm

21/11/2011

The third annual Bermuda briefing session in downtown Toronto this week could not have been timed more perfectly. Each year, a high-level delegation travels to Toronto in a bid to build on the already strong ties between the two financial jurisdictions to mutual business development benefit. This year, the meeting was sponsored by Business Bermuda and the Bermuda Stock Exchange (BSX), and was hosted by law firm Bennett Jones in their impressive meeting space with panoramic views of the downtown core and Lake Ontario.

Greg Wojciechowski, CEO of the BSX, attracted media attention by announcing that the BSX has been granted Designated Exchange status by the Department of Finance in Ottawa under the Income Tax Act. “This is a major milestone in the development of the BSX as one of the world’s leading offshore exchanges, I am extremely proud that Ottawa has extended us this designation; it is a testament to our team’s relentless determination to be a blue-chip service provider and jurisdiction,” said Wojciechowski.

One significant opportunity resulting from this designation is that securities listed on the BSX will now be eligible for Canadian Registered Retirement Savings Plans as well as Tax Free Savings Accounts. Much of the discussion at the meeting revolved around the new Tax Information and Exchange Agreement (TIEA) between Bermuda and Canada and how this will act as a catalyst for new business.  The TIEA makes Bermuda subsidiaries of Canadian corporations eligible for certain tax benefits that were otherwise available only to foreign affiliates resident in countries with which Canada had a tax treaty. A lot of Canadian business in the past flowed to Barbados directly because of the Canada-Barbados Tax Treaty; the Bermuda TIEA means that Canadian companies now have another offshore location to consider within the same time-zone. 

Captive insurance and reinsurance have long been a major component of Bermuda’s economy. Jason Carne, a Partner with KPMG in Bermuda, was at the Toronto session to explain the implications of Bermuda’s pursuit of Solvency II equivalence from European authorities. Although there are still some areas to be clarified, Carne explained that obtaining Solvency II equivalency status would mean its regulations were accepted as being equivalent to the upcoming Solvency II risk-based capital regulatory system being drafted in Europe. This is yet another way that the Island is demonstrating it is ahead of the regulatory curve and proactive in garnering international business.

Islamic Finance is another area being targeted for future growth and mutual cooperation between Canada and Bermuda. Andy Jobst, Chief Economist at the Bermuda Monetary Authority (BMA), explained how Bermuda is working to develop its appeal for offshore Islamic Finance business; for example, as a domicile for Islamic funds and sukuk. Jobst is a member of the Bermuda Government-sponsored Islamic Finance Task Force and draws on long-standing experience in Islamic Finance during his time with the International Monetary Fund.

Commenting on the briefing session, Sarah Barham, who has been involved in organizing the three annual Bermuda meetings for Business Bermuda, said, “I am truly thrilled to see business continuing to grow between Bermuda and Canada, and proud to play some small part in that process. We welcomed attendees from a broad spectrum of organisations, including asset managers, private investors, investment advisors, stock exchanges as well as service providers, such as hedge fund administrators and law firms.  No one is denying Bermuda is facing some challenging times in the current uncertain global capital markets, but there was a real sense of optimism and opportunity coming from the participants, and of a sincere wish for mutual continued collaboration between the two countries.”