switch over to daily trading on Wednesday, February 24 from when it will operate between 9.30 a.m. and 10.30 a.m. from Monday to Friday.

The new system will make use of computer screens operated by Reuters, the electronic quotation and news reporting service, which has agreed to give 29 pages on their screens for the Exchange.

But although computers will assist with trading, no deals will be done electronically, as some in the investment industry had hoped.

The computers will only inform dealers of bid and offer prices, sizes, last traded prices and volume.

If delaers see anything that takes their fancy, they must call the relevant broker by telephone to negotiate a deal.

Each of Bermuda's three banks, which are the only financial institutions allowed to deal on the Exchange, will have a computer screen in their trading room.

Exchange chairman Mr. Bill Dolan said there were no immediate plans to allow local investment firm First Bermuda Securities to trade on the Exchange.

FBS introduced daily trading to Bermuda several months ago and wants to become a member of the Exchange.

Mr. Dolan said: "We're not opening up the membership at this particular time.

That would be a decision by the entire executive committee of the Exchange and is something that will be dealt with in the future.'' The Exchange's bye-laws, which would cover such items as trading regulations, listing rules and membership rules, has still to be drawn up, he said.

"We want listings rules that will be flexible enough to attract mutual funds or companies in other jurisdictions to list here,'' he said.

Mr. Dolan is hopeful that some of the more than 400 companies listed on the Hong Kong stock exchange can be persuaded to list in Bermuda.

Companies listed on some internationally recognised Exchanges, which is what the Bermuda Stock Exchange wants to become, enjoy certain privileges in other countries.

For example, mutual funds listed in Luxembourg can be sold in Japan, said Mr.

Dolan.

"We want to build up the Bermuda Stock Exchange so there is an advantage for foreign funds and companies to be listed on it,'' he added.

He defended the much-criticised `open cry' method of trading, which has been used to run the Exchange since its formation in 1972.

"It has worked extremely well and given the small investor the same opportunity as the large investor,'' he said.

Critics, though, have argued that the system, which involved the use of ping-pong balls and shouting to place bids, was archaic, particularly since the highest bidder for shares sometimes missed out to lower bids.

Mr. Dolan said the Exchange had grown "substantially'' in terms of capitalisation since 1972.

There were currently about 6,000 shareholders in companies listed on the Exchange, he said.

"The investing public have become far more sophisticated in the buying and selling of shares,'' he said.

"The Bermuda Exchange is still a yield driven market but now we have a lot more dollars in the system. The activity over the last three to five years has really picked up.'' The Bank of Bermuda's Mr. Kevin Grant, who helped set up the new system, added: "The increased capitalisation and a goal to spread share ownership has led to a need for a more liquid market.

"Liquidity is one of the main characteristics of having a good and efficient market.'' Mr. Dolan said there may soon be a change in the way the Exchange Index is calculated.

At the moment the Index is arrived at using the trades in the Bank of Bermuda, the Bank of Butterfield, Masters, Argus Insurance, BF&M, Bermuda Press, Island Press, Belco and Telco.

"We're thinking of making all the companies on the Exchange involved in the calculation of the Index,'' he said.