legislation tabled in Parliament placing them under the control of the Bermuda Monetary Authority. The legislation should bring banks into line with international standards -- and could make it easier for them to gain secondary listings on overseas stock markets, reports Deidre Stark .

Bermuda's drive to conform to international financial standards intensified on Friday as the Banks and Deposit Companies Act was tabled in Parliament.

It will see the power to license and supervise these financial entities transferred from the Finance Minister to an independent central bank in the form of the Bermuda Monetary Authority which will enjoy more sweeping powers.

The BMA will become responsible for collecting some of the $2.6 million in annual fees currently paid to Government from the Island's banks, deposit companies and trusts.

And all banks and deposit companies will fall under the umbrella of the same Act -- since passage of this bill would see the Banks Act 1969 and the Deposit Companies Act 1974 repealed.

BMA chairman Cheryl Lister denied in an interview prior to the Bill being tabled that this would see the body becoming a truncheon-wielding ogre with claws of red tape.

But she explained the new powers would see the BMA empowered to impose restrictions on licences of financial entities as well as enabling it to more quickly get information to make sure deposits are not being put at risk.

If the BMA discovered such risks were being taken it could quickly revoke a licence to protect depositors, she said.

Ms Lister said such measures would bring Bermuda into line with world standards and enhance the island's reputation as a premier offshore investment jurisdiction -- leading rather than following other centres.

The bill aims to bring the Island's financial institutions and regulatory bodies into line with the Basle Committee on Banking Supervision's core principles.

Finance Minister Eugene Cox said banks and deposit companies were dealt with in different sections of the new "all encompassing bill'', both having unique criteria.

But he revealed that the new Act would not see the Bank of Bermuda able to apply to the Bermuda Monetary Authority for exemption from the 60/40 rule.

"Entities will still have to get permission from the Minister to waive that,'' he said, "because that rule is under the Companies Act.

"The original Banks Act said banks would have to get special permission different from other companies, and that Act will be repealed when this one is passed so the issue will fall under the Companies Act.'' This would see such a decision only resting on the Minister's shoulders rather than on the passage of a special Bill through parliament.

Banks which do much of their business outside Bermuda, could strengthen their capital base. Such vital flexibility in the global marketplace was denied the Bank of Bermuda when its private banking bill was defeated.

Yesterday Mr. Cox said there would be a transition period of 12 months -- but possibly extended beyond that -- when existing deposit companies and banks could be given some scope before being forced into line.

"And although the BMA will have more of a regulatory role, the Minister will still be able to give the directives in terms of economic and political issues,'' Mr. Cox said.

"For example, if the Government decided for economic reasons there was no need for more than three banks, the Minister can give that directive even if an application has been made to the BMA fulfilling its criteria.'' Mr. Cox said the Government was bringing both deposit companies and Banks under the same Bill.

Shadow Finance Minister Grant Gibbons was pleased the bill had finally been tabled.

Admitting he had not had a chance to scrutinise it yet, he traced it back to his own party's innovation which had been "stalled'' under the new Government.

The UBP Government introduced the first draft last autumn and while he admitted work had been done on it since, he said it had been "a long time coming''.

"This is important to demonstrate to the international community that we are serious in terms of complying to the appropriate standards like those of the Basle Committee,'' he said.

"We already complied with many aspects, this should bring us completely up to speed, and that is vitally important in terms of the scrutiny Bermuda has been placed under during the last couple of years.'' Protection: Cheryl Lister