Bermudian and international investors should reap rewards of changes to the Bermuda Stock Exchange, it was claimed yesterday.

BSX president, Greg A. Wojciechowski, said recent changes to the Exchange's technical infrastructure and its Private Act had been made to develop the Bermuda Capital markets so that they were of world class standard.

He was responding to comments by the Opposition party's Cole Simons.

Mr. Wojciechowski said: "The passage of the Bermuda Stock Exchange Amendment Act 2002 is a positive development, one which supports the development of the exchange whilst providing equal benefits to all Bermudian investors regardless of their socio-economic position.

"This amendment should make all investors regardless of the content of their main investment (real property or otherwise), look to the stock market as a mechanism for reaching their future goals."

Among the changes introduced by the amendment is the abolition of stamp duty on transactions in listed securities.

Mr. Wojciechowski added that, contrary to other reports, the abolition of stamp duty on the stock exchange transactions was necessary to ensure the smooth operation of the new electronic clearing, settlement and depository system which was introduced in December 2001.

He explained that since1992 transfers of shares resulting from a sale of a security listed on the BSX have been exempt from stamp duty. Gifts of shares (voluntary dispositions inter vivos), however were previously not exempt.

In the new paperless environment, physical share certificates have been replaced by electronic entries in investors' accounts. Transfers for value are not easy to distinguish from voluntary dispositions under this system.

It was therefore proposed that the gifts of securities should also be brought within the exemption and this was accomplished by the amendment to the act.

Government's Financial Secretary Donald Scott confirmed that the exemption was an incentive offered when the BSX was incorporated to encourage small private companies to list on a regulated exchange.

It was viewed that the development of a public stock exchange in Bermuda was in the public interest because it would offer a more regulated environment for retail investors to trade.

Mr. Scott said that: "The government has always supported the exchange and would clearly like to see more activity on the exchange."

He said: "The government's view was that the amendment was simply to generate more activity for the stock exchange."

Mr. Wojciechowski said: "The change also removes any doubts regarding the application of stamp duty as it relates to the lending and borrowing of securities. This is an area that the Exchange has been trying to develop and which could help in creating additional liquidity in the market."

The lending and borrowing of securities is an inherent aspect of derivative transactions such as short selling provisions which are currently not available on the BSX. However should the BSX at some point in the future institute short selling provisions, these current amendments will avoid any confusion in relation to the application of stamp duty provisions.