place.

In the latest, three new trading members were admitted to the Exchange on Monday after 20 years of being owned and operated by Bermuda's three banks.

The firms, not affiliated with the banks, will also have the option to participate in a share option incentive, part of the banks' move to broaden exchange company ownership.

Other changes include: Implementation of a new Bloomberg electronic trading system -- which could become the model for other small exchanges around the world; Employment of a listing officer and an office manager by the Exchange; and Discussions on making the Exchange a cooperative venture, owned equally by all its trading members.

Though the bank's are selling only 15 percent of the exchange, there may be future moves "to widen the ownership of the exchange company itself,'' the exchange said in its invitation to potential trading members.

Spokesmen for two of the new trading members currently favour part ownership of the exchange by their firms while a spokesperson for third remained uncommitted.

Matheson Investment Management (Bermuda) Ltd. CEO Mr. Ken Spurling and Lines Overseas Management Ltd. president Mr. Brian Lines both said they will likely exercise their options to become part-owners.

But First Bermuda Financial Services Ltd. president Mr. Maxwell Roberts would not say at this time whether or not that firm, a wholly-owned subsidiary of First Bermuda Securities Ltd., will acquire shares in the exchange.

Each met a deadline which will allow them to acquire part of the exchange.

"We were advised by the stock exchange that if we applied to be a trading member before May 31, 1995, then we would be in a position to take advantage of an option to acquire part of the 15 percent,'' said Mr. Spurling.

"Certainly it is our intention to participate at the executive management level and when offered the opportunity to participate in equity we will probably do so,'' he added.

Holding an equity position in any organisation means "greater clout'', he added.

Mr. Spurling said he believed the exchange could one day be a cooperative exchange, equally owned by all members.

"Most of the very successful stock exchanges around the world are co-operative,'' he said. "If the exchange develops the way we hope it will, as a global offshore exchange, it will have to develop into a cooperative.'' Mr. Spurling said he was pleased to see the exchange in the market for a new head of its listing division.

He believes there is a "tremendous amount of potential'' for MIM, through its Jardine Matheson connections, to sponsor new listings on the exchange. Jardine Matheson Holdings, a Bermuda-registered company, owns 40 percent of MIM.

Mr. Lines said LOM also intends to acquire an equity stake in the exchange.

"It will be significant for LOM as we will have more input into how the exchange goes forward,'' he said.

But Mr. Roberts said of the opportunity to buy into the exchange: "We will evaluate the situation at the time.'' Traders aim for ownership Under the share option incentive the banks have agreed to sell 15 percent of the issued share capital of the exchange company in the form of call options to the Bermudian founding trading members subject to a maximum purchase by any one founding member of three percent.

The call options may be exercised between May 1 and June 30 commencing next year and concluding in the year 2000.

The exercise price will be the book value of the exchange's shares at December 31 of the year prior to the year of exercise.

The option is non-transferable and expires worthless at close of business June 20, 2000.

The sale, purchase, or transfer is subject to approval of the Bermuda Monetary Authority.

Opting to buy shares in the exchange will be a decision made by First Bermuda management if they deem it a prudent investment, said Mr. Roberts.

Of the approval to become a trading member of the exchange Mr. Roberts said: "We are very excited about participating and we look forward to the date when we are inputting and executing trades from our terminals.'' The new members will begin trading September 25, 1995.

As well as new trading members, the exchange has moved forward on the electronic front with its new trading system, developed with Bloomberg Financial Markets.

"The exchange is currently using the new system and we are in the process of amending the system to make it more powerful,'' said recently installed exchange COO Mr. Greg Wojciechowski.

Financial results for companies is just one additional feature expected, he added.

The trading system not only chronicles bid/offer and trading activity but is also a mechanism for brokers to execute trades. It also has security features, said Mr. Wojciechowski.

Prior to the Bloomberg system, the exchange used a Reuters bid/offer broadcast system, said Mr. Wojciechowski. "The end product could be used by Bloomberg for other smaller or emerging markets,'' said Mr. Wojciechowski, who, prior to his COO appointment was the exchange's project manager.

Efforts to further expand the staff are continuing, said the exchange's first CEO Mr. William Woods.

The exchange received about 20 resumes for an office administrator position and an offer has been made to an individual for that position, he said.

Mr. Woods said the exchange will announce details of the appointment on Monday.

But appointing a new head of the exchange's listing division is expected to take a few more months, he said. The exchange is still in the process of interviewing for that position, he said.

Of the various changes taking place at the exchange, Mr. Woods said: "We will be moving very quickly from here'' while Mr. Wojciechowski said the changes are part of a lengthy process which continues.

The exchange closed at 1,025.13 yesterday.

Friday closes over the past several weeks have shown little movement. First Bermuda Securities financial advisor Mr. Randy Somerville said the Bermuda market's "age old philosophy of buy and hold'' continues to dominate. Despite the results of the referendum, which analysts had said was likely a main cause of a decline in the exchange's index because of the uncertainty it generated, "heavy buying fever has not returned,'' he said.

It remains to be seen if the index rebounds as investors may sense uncertainty linked to the Island's current political leadership environment, said one insider.