As part of ongoing changes to the exchange, First Bermuda Financial Services Ltd., the broking unit of First Bermuda Securities Ltd., Lines Overseas Management Ltd. (LOM), an investment management and stock broking company, and Matheson Investment Management (Bermuda) Ltd. (MIM), a joint venture between Jardine Matheson and a group of Bermuda investors, will commence trading on the exchange September 25.

The Bermuda Stock Exchange council's approval of new trading members is a landmark event for the exchange, said recently-appointed CEO Mr. William Woods.

"I think this is an exciting development,'' he said.

Until September 25, the exchange will continue to operate with the current three trading members -- the Island's three banks -- who also own and operate the exchange.

First Bermuda, LOM, and MIM will be the first brokers not affiliated with the Island's banks to be given approval to operate as brokers in the exchange's 20-year history.

Under the new trading membership regulations, the Bank of Butterfield, BCB Securities Ltd., a subsidiary of Bermuda Commercial Bank, and Bermuda International Securities Ltd., a subsidiary of the Bank of Bermuda, were also given approvals.

BCB and First Bermuda fall under the broker category while the other four are considered broker/dealers.

All six firms are incorporated as local companies and are entitled to sponsor new listings on the exchange, the exchange said.

The exchange had received ten applications.

"We can expect more trading members,'' said Mr. Woods.

The exchange "is still in the process of reviewing four other applications'', he said.

"Every application has to be supported by a number of documents and we have a very thorough due diligence test,'' he added.

The nine firms which applied prior to the May 31 deadline will be able to take up options for ownership of the exchange between 1996 and 2000.

Exchange COO Mr. Greg Wojciechowski said earlier the original nine applicants consisted of both Bermuda-based and exempted companies but did not identify them.

Exchange council chairman Mr. Charles Gunn, who could not be reached for comment yesterday, said earlier he welcomed the response to the plans to broaden the exchange's membership.

Trading membership offers members the facility to execute, monitor and obtain important timely information on Bermuda Stock Exchange listed securities.

The exchange continues to be open to applicants to become trading members but those who did not apply by May 31 will not have the option to acquire shares in the exchange.

Mr. Scott Lines, managing director of LOM, said becoming a new trading member will "allow more visibility to what is happening on the exchange and it will create more players and more liquidity''.

The exchange is finalising its electronic trading system, in conjunction with Bloomberg Financial Markets, and a central clearing and settlement mechanism which are intended to be implemented on September 25, said Mr. Woods in a release yesterday.

"The exchange is also working on the development of a compensation fund to increase the level of investor protection offered by the exchange in respect of transactions executed through the exchange,'' he added.