Bermuda is a well-wired "information Island'', the world's premier offshore financial centre and user-friendly in terms of regulation, leading mutual fund officials were told yesterday at a Bermuda-sponsored breakfast meeting in Florida.

About 120 attended the breakfast out of the 1,600 people in Orlando for the Mutual Funds and Investment Management Conference hosted by the Federal Bar Association and the Investment Company Institute.

Those invited to the Bermuda breakfast included fund managers, service providers and investment managers.

International Business Forum chairman and managing partner at chartered accountants Ernst & Young Bermuda, Jan Spiering, said, "We were able to show how the Bermuda Stock Exchange (BSX) is using the Internet and the new electronic media to stay ahead of competitive offshore jurisdictions.'' Mr. Spiering said, "This is the largest annual mutual fund conference in the US and therefore it is important to have a high profile. We have to ensure the market remembers us and knows of the new products that differentiate us from other jurisdictions.'' BSX chairman Arthur Sculley, delivered the main breakfast address, discussing how the Internet has become the global research and transaction centre for an increasing number of do-it-yourself investors.

It is estimated that offshore funds hold more than one trillion dollars of the seven trillion dollars invested in more than 32,000 open-ended mutual funds.

Offshore investors include institutions (such as investment banks, insurers, pension funds and fund of funds) high net worth individuals and retail funds (most of which are registered and trade in Dublin or Luxembourg to get their "EU passport''). Bermuda has been successful at chasing the US institutional business.

The offshore market is taking off as global investment expands, bringing more sophistication, complex products and new structures. The evolution is happening faster than onshore regulatory tax regimes can adapt.

With the fragmented nature of offshore markets, the Internet cuts through time, distance and complexity bringing information distribution, administrative efficiencies and electronic transaction processing.

But the growth of on-line trading has led to regulatory concerns about less ethical operators and protecting retail investors.

The Securities and Exchange Commission (SEC) in the US has said that foreign firms can avoid registration and compliance requirements by placing disclaimers on their websites and locking out certain unauthorised investors.

But in the UK, the Financial Services Authority (FSA) has declared that if information on a fund advertisement "can be pulled up on a screen in the UK, then it is issued in the UK'' and, barring some exceptions, should be regulated.

Mr. Sculley agrees with some FSA critics who believe that policy will be too difficult to enforce.

He said, "I think it is a ruling which will undergo adjustments. This is all such a new area to financial services that many of the regulators are just trying to digest the implications. I think that in time, the FSA's position will fall a little bit more in conformity with the other major countries around the world. But the views being taken by different regulators are not black and white. Everything is subject to additional study. The regulatory process is evolutionary, as opposed to a definitive statement.'' The Internet committee of the International Organisation of Securities Organisations (IOSCO) meets in Nairobi this September and should begin to establish international guidelines.

Mr. Sculley said that the BSX is a premier stock market for listed offshore funds.

JAN SPIERING -- Important for Bermuda to have a high profile at Florida conference.

BUSINESS BUC