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BF&M: No longer subject to 60/40 rule

BF&M is no longer subject to Bermuda’s 60/40 foreign ownership rule. The insurance group had said earlier this month it intended to seek relief from the 60/40 rule.

President and CEO John Wight told

The Royal Gazette yesterday: “There was a prescribed time period for Government to respond if there was any concern regarding the company seeking relief from the 60/40 rule.

“That time period has elapsed and thus as of (yesterday) the company is no longer restricted to foreign ownership in BF&M Limited being 40 percent or less.”

In a filing to the Bermuda Stock Exchange, BF&M stated: “Further to our letter to you dated 1st July, 2013 informing you of our notification to the Minister of Economic Development pursuant to Section 113(8) of the Companies Act 1981 (the “Act”) on the same date, please be advised that effective 22nd July, 2013, the Company shall be deemed to be “Bermudian” pursuant to Section 113(cd)(i) of the Act.

“Further, the Company, as a company to which Section 114(1)(e) of the Act applies, shall thereby no longer be subject to the requirements of Section 118 of the Act.”

Mr Wight has said the exemption would put BF&M in a good position should a business opportunity arise which requires it to access new capital.

He also said the value of a company cannot be fully realised if trading of shares is limited to Bermuda.

Mr Wight told

The Royal Gazette earlier this month: “There are many issues relating to a company’s decision to apply for this exemption. At a macro level, a fundamental principle in modern, efficient capital markets is that shares of listed companies are freely transferable.

“The 60/40 rule served Bermuda locally listed companies well for many years protecting those companies interests, but as BF&M and other local companies on the BSX reached the 40 percent foreign ownership threshold, the liquidity in the market lessened due to the much smaller pool of eligible investors.

“The value of a company cannot be fully realised if trading of shares is limited between Bermudian buyers and sellers only, which has been the case since BF&M hit the foreign ownership limit a couple of years ago. In addition, businesses need efficient and effective methods to access new capital when it is needed. BF&M is very well capitalised, however should a favourable business opportunity arise which requires the company to access new capital, the Company will be well positioned to act following relief granted from this exemption.”

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Published July 23, 2013 at 9:00 am (Updated July 22, 2013 at 8:16 pm)

BF&M: No longer subject to 60/40 rule

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