applications as trading members on the Bermuda Stock Exchange that they can not meet.

Members of the Bermuda Association of Securities Dealers were this week poring over the BSE's new trading membership regulations and their invitation to potential trading members to join the Exchange.

The association has held two special meetings over the last two days to discuss issues of concern.

The association had expected to review the two documents last Thursday night at its regularly scheduled meeting, but president Mr. E.T. (Bob) Richards said the members only received the report last week and such a discussion proved difficult.

Mr. Richards expressed the consensus view of the membership that securities dealers wanted to help develop the Exchange.

"The association is at least conceptually and philosophically on the same wavelength,'' said Mr. Richards. "But there are a number of details that we are looking into and I think that we will go back to the Exchange with a view to seeing if we can clarify and perhaps have some aspects amended to make them more practical.

"There are a lot of practical things that need to be sorted out. We are concerned about how the Exchange will actually be run. There is a committee structure that is supposed to be set up, but we don't know how it will be set up.

"Trading members are supposed to be on it, but we don't know how that will be arranged, how they will be selected.

"Something that most people had a problem with was the May 31 deadline for application for those firms wishing to eventually obtain shares.'' One of the requirements just laid down last week to those seeking seats on the Exchange was to have an independent auditor.

But Mr. Richards said: "Most of the members of the association are closely held companies and none of us have had the need for audits in the past, because the shareholders and the management were the same people.'' But on the issue of ownership, the association membership conceded more difficulty. The banks which own the Exchange intend to divest 15 percent of its shares for ownership by securities dealers. The dealers will only be allowed to hold up to three percent of the shares.

"The members aren't happy to being limited to 15 percent and we are not exactly sure what we are having 15 percent of, because no-one has ever seen any financial statements for the Exchange.

"If somebody tells you that you can buy, or you have an option on one percent of something, it will be nice to know what the one percent is. We don't know what the book value of the shares are now, or what they will be a year from now.'' There is also an issue relating to the types of dealers and what each type will be allowed to do.

Mr. Richards said: "Those members who have been active on the Exchange from time to time have certainly been doing agency brokerage, as well as broker dealing.

"Some people are not happy with the $20,000 joining fee (as opposed to a $5,000 joining fee for a broker), just for their shop to be able to buy 200 shares of Bank of Bermuda and then sell them again. We have some suggestions on how that might be amended to make it more practical.''