The Securities and Exchange Commission (SEC) has designated the Bermuda Stock Exchange (BSX) an offshore securities market, the exchange said yesterday.

The designation, known as a DOSM, gives locally-listed securities resold through the BSX a safe harbour from SEC registration requirements because they are deemed to have occurred outside the US. The trades are known as Reg S trades.

It is a major recognition for the exchange in its efforts to become an international offshore capital market.

"We have done a great deal of work in the last year to lay the foundation for this recognition, which is vital to the long term growth of the BSX,'' exchange CEO William Woods said.

"This designation now puts us on an even footing with our major competitors in Ireland and Luxembourg.'' The designation comes under rule 902(a) of Regulation S of the Securities Act 1933 and is granted by the SEC's corporate finance division director. Rule 904 of Regulation S provides for a safe harbour.

BSX chairman Audette Exel said that the DOSM is a developmental "milestone'' which will lead to obtaining further international recognitions.

The BSX, which recently became an affiliate member of the International Federation of Stock Exchanges (FIBV) and the Organisation of International Securities Commissions (IOSCO), anticipates other designations from UK and Japanese regulators before year end.