modernise the trading of local stocks.

As from yesterday, FBS was prepared to put up its own money to buy and sell shares.

Before then, the company had only enacted transactions on behalf of its clients.

Mr. Joe Taussig, managing director of FBS, said: "This is a quantum leap which is even bigger than us introducing daily trading last May.

"We will manage inventories just like Trimingham's does -- the difference being that on our shelves we've got shares.

"We are making firm bids on every stock and firm offers on most of them, although we want to be in a position soon to be able to make firm offers on all stock.'' In the United States, where FBS is a member of the National Association of Securities Dealers, the company would be regarded as a broker/dealer, he said.

FBS wants to improve the liquidity of the local stock market by providing a vehicle through which anyone wishing to sell shares quickly to raise cash can do so easily.

Conversely, it will also ensure that anyone who is prepared to pay as much as is necessary to buy shares will be successful.

FBS will make its profits from buying shares at a lower price than it sells them for.

"In the US and probably elsewhere, we would be called a broker/dealer,'' said Mr. Taussig.

FBS desperately wants to be allowed to trade on the Bermuda Stock Exchange, but is being refused entry by Bermuda's three banks.

Instead, it will use Bermuda Commercial Bank to build up a wide portfolio of local stock.

FBS will be prepared to sell any of its stock at any time and will also buy any stock at any time, provided the price is right.

Until yesterday, FBS acted merely as a securities broker -- a consignment operator which never owned shares but just secured the best deals for clients.

This is how Bermuda's banks still operate, securing a transaction only when the price and volume of offers and bids match at the same time.

"The number one priority for doing a deal should be price,'' said Mr.

Taussig. "The second priority should be time. If two orders come in at the same price, the first order should complete the deal.'' Mr. Taussig said FBS would always put its clients first in any trade. "The dealer should only buy when there are no customers with the same or better prices,'' he said.

"The importance of the dealer in all this is that he gets around the mis-match of volume and time that exists currently in the local marketplace.'' Market making was a highly profitable activity in the US, said Mr. Taussig, who is American.

Although the 47-year-old has vast experience of operating securities markets, he was not asked to participate in the future of the much-criticised Bermuda Stock Exchange, which switched over to daily trading yesterday.

Before coming to Bermuda, Mr. Taussig was responsible for systems and operations for New York-based Instinet, a stock exchange for institutions and brokers which trades more volume daily than the Hong Kong Stock Exchange. He was in charge of half of Instinet's employees.

Prior to that, he was chief financial officer of a US market making firm, where he said he used to hand out $20 million of capital every day to market makers.