fund companies could harm Bermuda, said one of the organisers of a mutual fund conference.

Peter Rodger, group legal adviser for the Bank of N.T. Butterfield and Son Ltd., said the proposed legislation would no longer require offshore fund groups to maintain their administration services outside the US. Under current rules, known as the "10 commandments'', offshore firms may have their fund manager based in the US but must keep their administrative offices outside the country so as to maintain their tax status.

However he said the relaxed conditions would not harm Bermuda as much as the Cayman Islands and the British Virgin Islands. Bermuda's fund groups had a more diverse market compared to the other islands. "It's bad news but not major bad news,'' he said.

Until the new simplified rules took effect it would be difficult to predict how the proposed change would affect Bermuda's banks and other companies which provide administrative services for fund companies, he said.

Mr. Rodger is one of the organisers of the 8th Annual Globalisation of Mutual Funds Conference which ended on Wednesday. The US tax issue was discussed during the conference. About 440 people, ranging from fund managers, lawyers and accountants, attended the conference.

BUSINESS BUC