regulation in Bermuda and the other UK overseas territories, it was revealed yesterday.

And the examination of the Island's financial health is expected to be completed by summer next year.

Foreign Office junior Minister Baroness Scotland said: "The appointment of a review team is timely and further demonstrates the territories' commitment to seeing further, well-regulated financial centres.'' The review -- promised in March's UK White Paper on relations with Britain's colonies -- will be jointly paid for by the six overseas territories involved in the exercise.

Baroness Scotland added: "I applaud their involvement in this exercise.'' A Foreign Office spokesman said the review was made necessary by the "significant'' offshore financial sectors developed by some of the territories, including Bermuda.

The spokesman added: "The review is scheduled to report by July 2000. KPMG will examine practices and legislation covering the banking, insurance and securities sectors, companies and trusts, independence of regulatory authorities, as well as arrangements in international co-operation and anti-money laundering.

"The review will assess progress in implementing accepted international standards and good practice in the areas outlined above.

"It will determine whether further action is needed by any island in order to meet those standards and prioritise any recommendations.'' KPMG -- which already has an office in Bermuda -- was chosen by a steering committee made up of UK Government officials and representatives of the islands involved.

The Foreign Office spokesman added: "The committee is charged with monitoring the work throughout the period of the review.'' In March, the UK promised closer links with its overseas territories, as well as full British citizenship for their residents, which includes the right to live and work in Britain without restrictions.

But the UK warned that international pressure to clamp down on white collar crime and money-laundering meant that the overseas territories would have to toe the line when it came to best practices in regulating their booming offshore centres.

The review will involve not only Bermuda, but the Caribbean islands of the Caymans, Anguilla, the British Virgin Islands, Montserrat and Turks and Caicos, all of which are involved in offshore finance, although Bermuda and the Caymans are by far the biggest players.