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New Act Allows Bank of Bermuda to List Abroad

Tax-news.com

20 August 1999


The new Banks and Deposit Companies Act should open the way for the Bank of Bermuda to have a second attempt at gaining an overseas stock listing when it comes into force later this year.. The Banks and Deposit Companies Act enables the Finance Minister to transfer his regulatory powers over local banks and deposit companies to the Bermuda Monetary Authority. The Act also invalidates the old Banks Act, which required banks to get special permission for exemption from the 60/40 ownership rule via passage of a private member's bill. The BMA will now be able to give this permission. The bank's bid for a secondary listing on the Nasdaq stock exchange was turned down last year when its private 60/40 exemption bill was refused by Parliament after the PLP in a shock move voted against it. Last year the bank's stock reached a high of $40 following heavy trading in anticipation of the secondary listing. After the bill failed to be passed it fell to a low of $25. The bank needs the listing in order to raise capital for overseas expansion to compete internationally and provide value to its shareholders. Critics say the exemption will set a precedent which will permit local banks to be owned by foreigners. The question of foreign ownership is always a contentious issue with the PLP.

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