Canadian exchange group TMX has purchased a 16% minority stake in the Bermuda Stock Exchange (BSX), making it one of the bourse’s biggest shareholders.
The agreement includes the admission of TMX CEO Tom Kloet to the BSX board of directors.
TMX says the purchase is intended to capitalise on increased business activity between Bermuda and Canada. A Tax Information Exchange Agreement was signed between the two countries earlier this year, effective from 1 July 2011, while the BSX gained recognition as a designated stock exchange under Canada’s Income Tax Act, from 31 October 2011.
“This investment represents TMX Group’s commitment to looking beyond Canada for opportunities,” said Kloet. “BSX and TMX Group both have a culture of continually striving to innovate and offer our clients enhanced products. I am certain we will be well aligned as we consider future initiatives together.”
Established in 1971, the Bermuda Stock Exchange specialises in the listing and trading of equities, debt issues, funds, hedge funds, derivative warrants and insurance linked securities.
“Canada and Bermuda share a long history and important jurisdictional ties, this strategic investment can only strengthen this longstanding relationship,” said Greg Wojciechowski, president and CEO, BSX. “We look forward to exploring new avenues of economic development and mutually beneficial cooperation in our domestic and international capital markets.”
TMX is currently the subject of an acquisition proposal from a consortium of 13 Canadian financial institutions under the name Maple, which aims to create an integrated exchange and clearing group. Canadian regulators are currently reviewing the Maple transaction, with a final decision from the country’s provincial regulators in Ontario, Quebec, Alberta and British Columbia expected in early 2012.
The Maple bid follows an attempted merger with the London Stock Exchange Group, which was abandoned after it became clear that the deal was unlikely to receive the necessary shareholder approval.