The Bermuda Stock Exchange has been designated as a recognised stock exchange for tax purposes by the Board of the UK's HM Revenue and Customs (HMRC).

The designation extends to the entire Exchange and as such securities listed will meet the HMRC interpretation of 'listed' as set out in the Income Act 2007 and as amended by the Finance Act 2007.

It follows on from the tax pact agreed between Bermuda and the UK at the start of the week which, when it comes into full effect in one year's time, will make it easier to catch tax cheats from either jurisdiction through an open exchange of information.

Finance Minister Paula Cox, on behalf of the Bermuda Government signed the TIEA (Tax Information Exchange Arrangement) Agreement with the UK, on Tuesday.

Designation by the HMRC is a significant development for the Island's stock exchange, which allows it to expand services by an unprecedented level.

It joins a long list of recognised exchanges worldwide, including those registered with the Securities and Exchange Commission of the US as a national securities exchange, those stock exchanges prescribed for the purpose of the Canadian Income Tax Act and the London Stock Exchange.

Minister Ms Cox said: "This important BSX recognition is a key benefit that Bermuda brokered in its TIEA negotiations with the UK, and we are pleased that the BSX has received this boost to its operations, which further advances Bermuda as a well regarded international financial centre."

In making the announcement, BSX chairman David Brown said: "The BSX embarked on a path in the 1990's to create a fully operational, modern offshore stock exchange platform in a jurisdiction which is well regulated and globally recognised. Today's announcement is further evidence of the BSX commitment to fulfill this goal.

"Designation not only required due diligence and detailed analysis of the BSX by HM Revenue and Customs during the application process, but also the involvement and support of Bermuda's Minister of Finance, her financial secretary and the Ministry for which the council and staff of the BSX is grateful. I must also congratulate the BSX team who have diligently and professionally pursued this important designation for several years."

Greg Wojciechowski, president and CEO of the BSX, said: "The BSX is delighted to have achieved and been granted this very important designation by HM Revenue and Customs.

"BSX clients have asked for the Exchange to seek this designation as they have indicated an interest in having their investment universe of 'qualifying investments' expanded or in other instances to have an alternative to the current listing venues for the listing of their Eurobond or debt products.

"We are proud to have been able to deliver on both counts and look forward to further growing the international business of the Exchange."