Bloomberg Financial Markets LP has developed specialised software for the members of the Bermuda Stock Exchange to use on Bloomberg machines in manipulating electronic trades from their individual offices.

Vice chairman of the Exchange, Mr. James Masters, said that the BSE has been working with Bloomberg for some time.

He said, "Bloomberg's been developing software on that machine which will allow the trading members to post prices and deal through that system. So if you have a Bloomberg machine, a password and the authority, you will be able to trade on the Bloomberg system.

"They have developed that system just for us. But they've done it for the purpose, I believe, of eventually trying to attract other stock exchanges. But at the moment, it has been developed solely for us.'' The BSE is now working with a three-year plan that includes focusing on getting the local dealers membership positions this year. The Exchange also wishes in this period to more fully develop the local market and the domestic shares.

The second step later this year will be to go after listings from Bermuda-based companies and mutual funds that may be already listed on Dublin or Luxembourg exchanges.

Mr. Masters said, "That would give the Exchange a base of revenue and more credibility. From there, the next step is international expansion next year.

We would look for other firms that are not related to Bermuda and other brokers to come on and join the Exchange.'' In effect, the BSE is then giving Bermudian companies a chance to obtain their equity in the Exchange before they throw it open to international players.

Mr. Masters said that initial applicants for membership on the BSE will be the only parties given the opportunity to buy into the exchange in the near future.

He said, "This opportunity for the purchase of equity in the Exchange itself is only open for a limited period of time and only to the initial people who step forward at this time. There are no plans at this time to make such an offer for equity ownership at any other time.'' The banks have no intention of divesting any more than 15 percent of the Exchange, which means potential new owners will have to split the minority equity. Shares in the Exchange's limited liability company will be sold at book value.

Most exchanges are run as break-even operations, because they are pure mechanisms for trading, of which the owners are benefiting. Some of the new ones are being run for profit. No decision has yet been made about the BSE company.

Trading members will sit on a new executive committee that will run the day to day operations of the Exchange. And that responsibility will be removed from the purview of the Council, who have had to deal with it until now.

The BSE may soon ask Hong Kong securities experts International Securities Consultancy Ltd. to work on an electronic method of settling or confirming trades. They must also get their listing regulations for domestic and international companies reviewed and vetted by lawyers and accountants and approved by the Bermuda Monetary Authority.

Mr. Masters also explained the reasoning behind the requirement that members needed to retain a minimum net capital of $25,000. He said that the current members, the Island's three banks, were concerned not to have the figure too high to exclude the interested parties. Those interested parties are a handful of local firms of security dealers.

Meanwhile, the Exchange has identified two possible candidates out of a list of six applicants that may be suitable for the new post of CEO. But the BSE has continued dialogue with other exchanges around the world in their bid to fill the post.

Mr. Masters, said that all six were non residents.

He continued "There were two candidates in there and then there were some other people at a more junior level that the Exchange may be interested in as it grows in other positions.'' The exchange has already leased office space at the Washington Mall and hope to have the new CEO in there by May. On Tuesday the BSE announced new trading membership rules and an opportunity for firms other than the banks to become trading members.