likely to be invited to trade on the Bermuda Stock Exchange when its membership rules and regulations are approved by the Bermuda Monetary Authority.

The BSE's new chairman, Mr. Charles Gunn, said companies of the calibre of Merrill Lynch and Kidder Peabody were important in the development of the Exchange.

"It's certainly being contemplated that international firms will be allowed to trade on the Exchange,'' he said.

"There have been already been some specific exemptions from other legislation, particularly the Companies Act, in relation to firms such as foreign brokerage houses.'' Foreign traders were likely to bring with them new foreign listings as the BSE sought to establish itself as a truly international exchange, said Mr. Gunn.

Mr. Gunn, a 55-year-old Canadian who took over as chairman of the Exchange less than three weeks ago, believes the Exchange has "unlimited potential''.

"It can become whatever Bermuda wishes it to become,'' he said. "The Exchange has gone from what I would call a gentleman's club to an incorporated entity which is now putting in place properly structured rules and regulations.'' The BSE has been heavily criticised in the past for developing too slowly, an image it has yet to shake despite switching from weekly to daily trading in February and incorporating as a legal entity the following month.

"One of the issues that most people tend to overlook is that the members of the Exchange have certainly never made any money from it,'' said Mr. Gunn.

"It's been the other way around.'' He added: "Now that the commitment has been made to focus on bringing the Exchange into the 21st Century, there have been several rapid changes when you compare it to its prior existence. This change will continue.

"I, and others, want to initiate changes as quickly as possible, consistent with ensuring that they are appropriate, and are going to be beneficial, for Bermuda.'' He praised the Ministry of Finance and the Bermuda Monetary Authority for helping the Exchange to develop.

"They have been very helpful in providing a great deal of assistance, whether that's been in the form of specific recommendations, suggestions, or putting us in touch with appropriate individuals in other jurisdictions,'' he said.

"I know from personal experience that this is certainly not the type of help which regulators in other countries give to similar enterprises.'' In his native Canada, securities commission in the Canadian provinces were "quite difficult to deal with'', he said.

"In Bermuda, the attitude is that `we want to do this and we're going to make it happen' and it's happening.

"We want it to happen as quickly as possible because we're receiving inquiries for listings not just from local companies but from those in other parts of the globe who see Bermuda as a good environment in which to list their companies' shares and other securities.

"Bermuda is viewed as a stable environment with good laws, a good judicial system and a very good infrastructure in place in terms of legal, accounting and telecommunications.'' He was confident that more international companies will be listed on the Exchange and that their shares will actually be traded, unlike the current situation whereby the seven international firms listed on the BSE have never traded.

"As we develop the Exchange and get more players on the Exchange there will be trading of international companies,'' said Mr. Gunn.

But first, several problems have to be sorted out, such as in what currency deals will be settled.

An easing of the foreign currency purchase tax which offers little incentive for Bermudians to invest in non-Bermuda dollar securities would also help, he said.

"To really develop and internationalise the Exchange, the whole issue has to be rationalised as to what denomination or currency the settlement would be in,'' he said.

"We're hoping to create an environment that will enable local and international securities to be traded both by residents and non-residents of Bermuda.'' He added: "I think Bermuda is going through a really exciting time now, with new players establishing a presence here in the field of money management and specialist traders, dealing in commodities, futures and other derivative products.

"Bermuda has really been gaining a reputation as a good place to establish an office.'' Mr. Gunn left Toronto in September, 1989 to take up a position as deputy general manager of trust at the Bank of Butterfield.

"Prior to coming to Bermuda I was associated with a family organisation that owned some financial companies,'' he said. "I was vice president.

"The company that serviced the public directly was called International Trust Company, which was a wholesale company in the sense that it dealt only with corporate clients in the pension field.'' On July 1, 1993, Mr. Gunn became Butterfield's international executive in the international corporate division, primarily involved with international marketing and sales.

"We are trying to get some greater involvement with these new insurance companies forming in Bermuda in terms of being part of their banking arrangements and in terms of underwriting for some of theirs IPOs (initial public offerings).'' But he added: "The percentage of shares which are being made available to Bermuda institutions for sale to their clients have been pretty disappointing quite frankly.

"The number of shares that have been made available to Bermuda institutions has been very, very small.'' Prior to becoming chairman, Mr. Gunn had been deputy chairman of the Bermuda Stock Exchange since its incorporation in March of this year.

He became chairman after the incumbent, Mr. Bill Dolan, left the Bank of Bermuda, which is one of the Exchange's three members.

Otherwise, he would probably have taken over as chairman at the end of April, 1994, when Mr. Dolan's term of office was due to expire.

Mr. Charles Gunn.