drafting regulations, intended to protect investors, said Exchange president Mr. Charles Gunn.

But he told Hamilton Rotary yesterday draft regulations will not be "so onerous as to deter listings''.

Investor protection is of the utmost importance to the Exchange and its regulators, said the senior executive for corporate banking at the Bank of Butterfield.

Mr. Gunn also said he looked forward to local investment firms joining the Exchange, and predicted the number of trading members would increase by early 1994.

Costs have been substantial, he said, and the Exchange must begin to cover its operating costs.

At present, office space, computer equipment and telephone service is provided by the Bank of Bermuda.

"The time is quickly approaching where we must acquire our own premises, and as members increase, hire additional staff,'' said Mr. Gunn, who became president earlier yesterday following the resignation of Mr. Wiliam Dolan.

He suggested revenue could be derived through membership fees, transaction fees and listing fees.

On the subject of regulation, he identified key areas to be addressed as: the minimum quantity of a company's shares, which must be held publicly -- referred to as the public float; The minimum number of shareholders; Restrictions on how directors, officers and control persons deal with their shares in the company, such as lock-up provisions; The transferability of shares; The requirement of an issuer company to advise the Exchange and the market of events within the company, which might cause a fluctuation in market price, such as a declaration of a dividend; The prohibition of company insiders using proprietary information to their benefit; and The reporting of financial results by the issuer company to the Exchange and the public.

Although the Exchange comes under the supervision of the Bermuda Monetary Authority, the Exchange is and wishes to be a self-regulatory organisation, said Mr. Gunn.

"I believe I am safe in saying that the Authority is of the same mind,'' he added.

Mr. Gunn said the Exchange aims to institute a computer system, which will record transactions processed, and also introduce a corporate data base, which will maintain company information. Exchange project manager Mr. Greg Wojciechowski is currently compiling five year histories of listed companies.

An electronic system, which permits members to display their bid and offer, and an indication of the quantity for each of the securities in which they wish to deal, has been installed.

Mr. Gunn voiced ambitions for the Exchange to have "the capability to list and trade securities, like Partner Re''.

"The Exchange continues to receive a growing number of listing inquires from a broad spectrum of sources and companies,'' he said.

For the year to date, dollar volume is about $55 million, compared with $16.4 million for all of 1992.

From March 1, 1993 to the end of November, 1,877,660 shares have been traded.

The elimination of stamp duty has been one of the major catalysts for the great increase in trading volume, said Mr. Gunn.

He said he was hopeful that the number of trading members, currently at three will increase.

There are 76 listed issuers: 36 Equities (29 Domestic, seven International) of which 25 trade on a regular basis; four debt issues; one Government; three corporations, all of which trade on a regular basis; and 35 mutual funds of which only one, the Bermuda Rock Fund, is denominated in Bermuda dollars.

The Exchange had four listing applications as of Friday, December 10, 1993.

Mr. Gunn pointed to future opportunities, such as the "Hong Kong connection'', noting about 50 percent of the companies listed on the Hong Kong Exchange are incorporated in Bermuda, thus giving them a strong reason to list in their country of incorporation, he said.

Mr. Charles Gunn.