its second reading in the House of Assembly yesterday.

Finance Minister Grant Gibbons introduced the Companies Amendment Act 1997 and the Bermuda Monetary Authority Act 1997.

Dr. Gibbons told MPs the Companies Act amendment was an "annual rite'' and part of a long-standing commitment to the business world to regularly bring the legislation up to date.

He said the legislation would allow mutual funds and unit trusts to be marketed to Bermudian investors. Currently, mutual funds and unit trusts incorporated in Bermuda cannot be sold on the Island unless they are listed on the Bermuda Stock Exchange or the Finance Minister grants special permission.

There are two types of trust companies at the moment -- those incorporated by private bills and those which are registered.

The two types are treated differently in terms of immigration and company law.

But Dr. Gibbons said that even though he was "levelling the playing field'', companies would still be strictly regulated in order to protect Bermuda's clean financial image.

Shadow Finance Minister Eugene Cox warned it was important to protect local companies and those which have had a base on the Island for a long time.

Paula Cox (PLP) said Bermuda must "look to protect that which we prize so judicially'' when allowing companies to set up shop on the Island.

She added: "When they do come to Bermuda....there is an added burden -- we must make sure there is a local representative.'' Shadow Health and Social Services Minister Renee Webb said that some companies were involved in "back door selling'' in Bermuda, anyway.

She added Government should "make them legal so they can operate within the economy as legal players''.

She was backed by Ms Cox, who is a bank lawyer, who said: "There are some overseas companies operating in Bermuda without a permit. This is happening and the BMA is having some difficulty in controlling them.'' Dr. Gibbons said the legislation was "in line with global practices''. He added that Government agreed that "improved regulatory and supervisory oversight'' was needed and was working towards that.

Grant Gibbons