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The Actuary The magazine of the Institute & Faculty of Actuaries
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Q&A: Greg Wojciechowski

What brings you to London?
The Bermuda Stock Exchange (BSX) was a lead sponsor of the second ILS Europe Summit, held here from 26–28 April. In conjunction with this, the timing was perfect to talk about the Exchange’s initiative to attract insurance linked security (ILS) structures to list on the BSX, in particular the listing of catastrophe bonds.

Recently, Bermuda enhanced its insurance company incorporation regulations to make it very practical to set up special purpose insurers, which is the vehicle through which ILS structures are created. This regulatory development, coupled with the BSX’s focus on providing listing support for ILSs and investor demand for additional transparency for these structures makes it the perfect time to be having this discussion.

What do you see as the role of insurance linked securities in the capital markets?
ILSs provide an investment opportunity in an asset class that structurally has little performance correlation with the broader capital markets. Almost a natural hedge!

Do you see a place for actuaries in an organisation such as yours?
It depends how the market develops to be honest. I see their experience being valuable in the creation of ILS structures.

Risk management is a buzz term for our profession and fi nancial services industry at large. How does the BSX employ risk management techniques day to day?
Our systems and regulatory framework ensure that all transactions/contracts that are executed across the market settle without interruption. In addition, Exchange regulation ensures that parties to transactions are properly funded and able to settle their trading obligations.

The Exchange requires its issuers to provide information flow to the market so that investors can make informed decisions as to the value and merits of listed securities.

Has this approach changed in light of the recent economic crisis?
Regulatory frameworks are subject to change to address circumstances that arise during the normal course of business. In this regard, when there is a need to strengthen our protections in response to a situation, we move to do so to ensure a proper level of regulation for our market and its users.

In which stage of the economic cycle do you believe we’re in?
There are two elements of our business at the BSX: the domestic capital market and the support for the international capital market. Regarding the former, I believe we are at the bottom of this market dislocation, which is reflected by our key index being at record lows. Bermuda’s domestic capital market historically tends to lag behind the international markets.

Our international business is more buoyant than ever, and I believe this is reflective of the fact that the broader global market is beginning to shake off the effects of the past market dislocation.

What has been the impact of the proposed EU directive on the regulation of alternative investment fund managers for Bermudan funds?
To date, Bermuda has signed 20 tax information exchange agreements and has recently signed a double taxation treaty with the Kingdom of Bahrain. The country is known for being very well regulated, cooperative with its peers and for meeting international standards of regulatory oversight. The BSX follows this philosophy and has recognition from its regulatory or commercial peers such as the World Federation of Exchanges.

The impact of the directive is unclear as its provisions are still being analysed and evolving with talk about equivalency. Bermuda is watching this very closely and is taking proactive steps to analyse the directive’s developments and to have a mechanism through which it can offer its comments as necessary.

Did your move to the Stock Exchange happen by design or fate?
Prior to joining the BSX, I was working in the financial services industry based in Manhattan. The BSX was looking to modernise and expand its operations and it was a good fi t for my skill-set. The job required an entrepreneurial approach, vision and dedication, all of which I believe I bring to the table.

As my wife is Bermudan, it made the decision easier on a personal level. How do you measure your success? I measure success by the market coming to a member of the BSX team for their input and advice on capital market matters. I noted to the BSX team that when your advice is being sought, it means those seeking it have confidence and respect in your knowledge and to my mind that is one of the best compliments to be paid. Of course, the other success metric is the bottom line, on which my eye is always keenly trained!

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Greg Wojciechowski is the president and CEO of the Bermuda Stock Exchange. Prior to assuming this role he was the Exchange’s chief operating officer. A Bachelor of Arts graduate, Mr Wojciechowski has had extensive management experience at three large US brokerage firms. He has studied International Business at The University of Copenhagen, French and International Relations at the Université D’Aix-Marseille and completed the Young Managers Programme at INSEAD in Fontainebleau, France.