Bermuda's financial watchdog will contract out some of its new supervisory responsibilities rather than expand in-house, The Royal Gazette can reveal.

And licensing of major institutions like banks will become the sole responsibility of the Bermuda Monetary Authority, rather than the Ministry of Finance's, acting on the advice of the BMA -- in line with international recommendations.

BMA chairman Mansfield Brock said his organisation was faced with two options -- add to the current 30-odd staff or make greater use of outside expertise.

He added: "We could increase the size of our organisation, which we do not intend to do.

"Or we could find another way to do it by having work contracted out to appropriate people, like public accounting firms, and have them carry out the actual investigations.

"The job we would give them is that of making sure that the internal control systems of our institutions are adequate.

"Doing that would be very, very expensive and we would have to have a large bureaucracy. By contracting this out, we don't have them on staff for the whole year.'' Mr. Brock was speaking after Finance Minister Grant Gibbons said international recommendations were clearly in favour of less political control of businesses, with independent regulatory bodies taking over.

Mr. Brock said: "A key point the Minister made, which I would like to re-emphasise, is that the push for changes in licensing is coming not from the UK, but from organisations like the Basle Committee of Banking Supervisors.'' And international opinion wants the BMA to take a lead role in the supervision, regulation and inspection of financial institutions, which includes those operating in Bermuda and Island companies.

That includes the banks, trust companies, mutual funds, deposit companies, credit unions and the Bermuda Stock Exchange.

It also includes supervision of Bermudian operations abroad, which currently operate in 17 jurisdictions around the world.

Currently, licensing is handled by the Finance Ministry, which acts after seeking advice from the BMA. But it is envisaged the BMA will take over total responsibility. Mr. Brock said: "It's something which has the full support of the leading countries of the world -- that there should be an independent authority in every country which has the responsibility for licensing and supervising of financial institutions and that these authorities should operate within criteria and guidelines set by Parliament.'' And he stressed: "They have to be responsible and accountable.. ..it's not just giving power without proper accountability.

"The criteria under which licences are granted will be established by Act of Parliament or policy guidelines from Government.'' Mansfield Brock