few months after being given an exemption yesterday from 60/40 rules which restrict foreign investment in Bermuda companies.

Bermuda's largest bank, which has a market capitalisation of $1.09 billion, was given the exemption by Finance Minister Eugene Cox at the House of Assembly yesterday.

Mr. Cox said: "I am confident that the access to capital from international sources that this licence will provide to the Bank of Bermuda is warranted and will be beneficial for both the bank and, most importantly, Bermuda at large.

"As such I am confident that in issuing this licence to the Bank of Bermuda Ltd. I have met my statutory duty to further the national interest.'' Bank of Bermuda shares shot up after the news to close at a record $43 with $2.77 million sold in a single day.

The rise in the stock price pushed the Bermuda Stock Exchange index above the 2,000 mark for the first time ever, closing at a new all time record high of 2,117.87. (See story on Page 8 A joint statement by Eldon Trimingham, chairman, and Henry Smith, president and chief executive officer of the bank, said: "This will enable us to compete on an equal footing with other global financial institutions, all of which have unrestricted access to capital and to continue to share with Bermudians the opportunities and financial rewards that go hand-in-hand with a successful global operation.'' But there is a list of conditions which will make sure the bank stays in Bermuda and remains committed to the Island.

Bank of Bermuda and the Bank of N.T Butterfield & Sons Ltd, the Island's second largest bank, had both applied for exemption from the rules, which will allow them to get more foreign investment.

Bank of Butterfield welcomed the licence decision and said it was still waiting to hear about its application.

A spokeswoman for the Bank of Butterfield said: "Bank of Butterfield is delighted with Bank of Bermuda's news and we congratulate them on the success of the applications. We look forward to hearing the result of our own more recent application in due course.'' For the past two years the Bank of Bermuda has been seeking an exemption from the rule that means that 60 percent of the bank has to be owned by Bermudians or Bermudian businesses.

Mr. Smith said the reason the bank wanted the exemption was to raise more capital and to do this it has to get investment from abroad.

The Bank of Bermuda also said it wanted to list on the Nasdaq, and it was unlikely the Nasdaq would allow the bank to float stock with the ownership rule in place.

The bank has said that its stock price at the Bermuda Stock Exchange is undervalued and that taking the bank onto the Nasdaq would be good for shareholders.

The bank said: "We are now able to start the process of filing the necessary documents with the US Securities and Exchange Commission in preparation for our US listing.'' A special AGM will be called for Bank of Bermuda shareholders to rubber-stamp the by-law changes.

The bank said: "We expect the preparations for a US listing to take several months.

Focus: Page 2 Ownership exemption "Our goal remains to list our shares in the United States at the earliest appropriate opportunity and we will keep our shareholders and the Bermuda community fully informed of our progress.'' Business in Bermuda is separated into local business, which is subject to the ownership laws and includes banks, shops, transport companies, media etc.

which trade in Bermuda, and international business, which includes insurance companies which are incorporated here, but do not trade in the local economy.

The move by the Minister of Finance comes after the Organisation for Economic Development stated that it considered the existence of two tiers of business structures as a potentially harmful tax practice.

Bermuda, which was accepted as a cooperative jurisdiction by the OECD, stated it would review the situation, and the ruling is the first move towards this.

Minister Cox has, however, laid down some rules for the deal, and said the bank has to: "Maintain the Bermudian mind and management of the bank. This means that the majority of the board of the Bank must be Bermudian, the head office must remain in Bermuda and the shareholders' meetings must be held in Bermuda.'' Equal footing: Henry Smith Warranted: Eugene Cox