The Bermuda Stock Exchange (BSX) is positioning itself as the platform of choice for the listing of insurance linked securities (ILS) such as catastrophe bonds.

Last month the BSX sponsored the IQPC's 2nd Insurance Linked Securities Summit Europe in London this week.

The BSX currently has nine ILS listed, two of which have been listed this year. Another is expected to be approved this month. The exchange hopes to attract more ILS to form in Bermuda and list on the exchange, in a move that could make the ILS market more liquid and could also attract other institutional investors such as pensions.

"Bermuda has critical mass with sponsors, has the right regulation in place, a wellestablished stock exchange and so the jurisdiction is seen as the natural place for the convergence of the capital markets and reinsurance," said BSX CEO Greg Wojciechowski.

Many of Bermuda's reinsurance companies have issued cat bonds or set up special purpose vehicles such as sidecars.

Investors are now looking for open and transparent structures and Mr. Wojciechowski says that listing on an exchange can provide this security in this asset class. It could also lead to new institutional investors, such as pensions, investing in cat bonds.

New regulations introduced in October 2009 provides specific framework for special-purpose insurers (SPIs) as a new class of insurer.

Bermuda's insurance class system. It also recognises and facilitates the structure of ILS, such as cat bonds, and a listing of these securities on an internationally recognised stock exchange makes these securities significantly more attractive for potential investors.

"The process of listing is not at all onerous, and the cost is minimal," said Mr. Wojciechowski.

"Listing on a platform like the BSX could increase investor demand as it not only increases transparency, but also makes the product a bit more mainstream from a capital markets standpoint."

As of the end of April, 2010, the BSX has listed insurance companies and ILS worth $39 billion.