Canada Approves Use Of BSX Securities In Retirement Savings Plans

by Mike Godfrey, Tax-News.com, Washington

17 November 2011

The Bermuda Stock Exchange (BSX) has announced that the Minister of Finance for Canada has approved the addition of the exchange to the list of designated exchanges under Canada's Income Tax Act.

In 2005, the Canadian government removed the foreign content limit on tax-deferred retirement plans prompting an increasing number of Canadian investors to look to foreign securities listed on foreign exchanges to enhance their returns and diversify the investments held in their Canadian Registered Retirement Savings Plans (RRSPs) and Deferred Profit Sharing Plans (DPSPs).

Securities listed on a designated exchange are eligible to be held in these assets, meaning that official recognition of the BSX will open up the opportunity for Canadian investors to include BSX listed securities in these investment portfolios.

While the Designation status is not an endorsement or recommendation of individual securities listed and traded on the BSX, it is an acknowledgement by the Canadian government that these securities trade on a well-governed, regulated and transparent market which allow them to be qualified investments for tax-deferred retirement plans in Canada.

Announcing the news, Greg Wojciechowski, BSX President and Chief Executive Officer said: "The BSX is delighted to have achieved and been granted this very important designation by Canada’s Minister of Finance. Following the implementation of a Tax Information Exchange Agreement between Bermuda and Canada this summer, designation of the BSX by the Minister is very welcome news. I am confident that these important developments will deepen the longstanding cultural, commercial and capital market ties between our countries. We are grateful to Canada’s Department of Finance for the guidance that has been provided to us during the designation process.”

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