In a major coup for the Bermuda Stock Exchange (BSX), the brokerage arm of Reuters Group Plc., the world's largest financial information service, has started using the Island for executing billions of dollars of cross trades.

The company switched from using the London Stock Exchange to the BSX two weeks ago and has already executed about $2 billion worth of cross trades.

Cross trading is the ability of a BSX trading member to do in-house trading on the exchange between two of its clients in US securities while those markets are closed.

The BSX has approved Instinet (Bermuda) Ltd., a Bermuda exempted company, as a member of the exchange.

Instinet (Bermuda) Ltd. is wholly owned by Instinet Corp., the brokerage arm of Reuters.

New York-based Instinet is a member of 17 exchanges around the world and offers trading services in 40 markets.

The BSX has operated electronically since October 1996, giving member brokers the ability to execute cross trades.

Until Instinet came along, the facility was used mainly by Nomura Securities (Bermuda) Ltd., offshore subsidiary of the world's largest securities firm.

Nomura switched from the Cayman Islands to Bermuda in 1996.

In the year to September 24 about $11.382 billion worth of cross trades has been executed on the BSX.

Cross trading is attractive for big investors selling large blocks of stocks in which shares trade hands in foreign markets like Bermuda.

The "off-board'' trades allows big investors to get rid of large chunks of stock with less risk of driving the price down compared to when such a trade is made during regular trading hours.

On the BSX cross trades are executed as a basket of different stocks all at once.

BSX chief executive officer William Woods said Instinet plans on also doing about 200 additional individual trades a day to comply with a US rule regarding broker clients.

He said Instinet switched from London because the BSX is able to offer a lower cross trading fee, and a much more transparent reporting.

The trades are reported on the BSX Internet site, Bloomberg, and on Reuters.

MAJOR COUP -- BSX CEO William Woods