By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Bahamas International Securities Exchange’s (BISX) three key initiatives to expand the capital markets are “still on track”, its top executive said yesterday, with two set to launch “in the next few months”.

Keith Davies told Tribune Business that the exchange’s long-planned ‘private listings’ tier and “crowd funding 2.0” platform, which will fill the gap created by ArawakX’s departure, are poised to be unveiled during 2025. However, ambitions to create a so-called ‘secondary market’ will take longer to come to fruition due to the need for buy-in by capital markets participants and the Government.

“All are still in train,” the BISX chief told this newspaper. “The first one, the private listings, that’s closer. The other one will be the crowd funding platform. That one I’m hoping to put out between September and the end of the year. That’s all still in train. We’re still on track for that.”

BISX’s proposed private listings tier will be targeted at emerging companies who aspire to go public in the long-term. These entities will not be offering shares to the public, or soliciting investments by outside investors, and any trading (buying and selling of shares) will be limited to existing owners and private individuals who may buy in.

“That’s the one we are targeting first. That’s the one that’s closest,” Mr Davies said of the private listings tier. “That is the one where we’ve only got a few more things to do. We’d like to announce that. I’m hoping to do that sooner rather than later.”

The crowd funding 2.0” platform is being designed for companies that are “a bit more mature” so that they can raise capital from Bahamian investors via a regulated market where disclosure and other supervisory mandates must be met.

But the third and final element in the exchange’s expansion plan - the launch of a so-called “secondary market” - will take more time because its design requires input from the Government and other capital markets stakeholders.

“The secondary market, that is going to require that I get co-operation and buy-in from the market participants because we’re going to have to all come together and go to the Government and ask for rule changes,” Mr Davies explained. “It’s an initiative where we’re going to have all the stakeholders participating. We want to lead the charge. I want it to bring something substantial but also meaningful...

“The first two initiatives will be in the next several months, and then the secondary market, we’d like to probably kick-off that initiative before the end of the year. We’ll see how far we can push it. It’s a hand-in-glove initiative with the Government.

BISX and its private sector partners are working on a strategy to “justify” the Government providing incentives to companies as a way to encourage them to use the planned secondary market as a mechanism for raising capital from local investors. This “layer” would sit above both the private listings and crowd funding tiers, but below BISX’s existing primary main board listed stocks.

The strategy to broaden and deepen the capital markets, through the addition of these three new categories below those companies that have undergone initial public offerings (IPOs), will benefit investors as well as providing corporate Bahamians with more options and flexibility when it comes to raising finance for their ventures via a structured, regulated market.

It will also create a pathway where companies can graduate, and move, from one layer to the next to where, ultimately, they are ready to become public companies via IPOs. And, from the investor perspective, Mr Davies said it will offer more options for Bahamians to generate greater returns, as well as increasing their long-term savings, in an environment where issuing companies will have to disclose their performance.

“The key thing is mobilising what we have,” Mr Davies said. “The thing about capital markets is that it’s not just IPOs; it’s private equity, it’s debt, its private deals; it’s about exploring different types of financing. There’s many different elements.

“What we’re trying to do is mobilise and require them to benefit Bahamians. There are many things we can do on the ground for ourselves. There are investment dollars here and people hoping for investments - from private individuals to accredited investors. I think we’ll be pleasantly surprised by the response.”

As for BISX’s wider strategy, Mr Davies said in a previous interview: “We’re going to encourage participation through all levels of investments. We’re going to provide that through online and digital platforms that make it easy for persons to access. We’re going to create various stages of the market. People can move between stages and companies. They will be able to understand the different levels and pick and choose where they want to fall.

“These are options that did not exist before. The benefit of having markets is the benefit of organisation. There are rules you have to follow. Everyone understands the climate, everyone understands the benefits, everyone understands the penalties and, with that level of certainty, you attract investment. We all win.

“This is not a fly by night. There are very bright lines. There’s no grey areas; everyone understands what you are working towards. There’s no blurred lines. The businesses are going to succeed or fail on their own merits. What we’re going to do is make sure everyone understands what the merits are. Therein lies the difference between a regulated market and something else.”