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February 1, 1999

NASD Launches New Technology Unit

By Jeffrey L. Winograd

One of the most intriguing new units of the National Association of Securities Dealers is the newly-created NasTech Alliance. The NASD said the unit is responsible for vendor management, financial management and risk and control processes.

Basically, the main purpose of NasTech is to support the integration of the technology backbone of the NASD and its NASD Regulation subsidiary. NasTech is the product of a partnership of the NASD itself and Electronic Data Systems (EDS).

Over time, James Cangiano, senior vice president of the NASD's market-regulation unit, who was named to head business development of NasTech, will prowl for business opportunities for the new unit. Indeed, NasTech may one day support products and services not directly connected with NASD business.

The possibility of NasTech becoming a wholly-owned subsidiary of the NASD is a matter under discussion, an industry source said.

What the creation of NasTech says is this: Nasdaq is moving ahead on the technology curve, observers say. "It could develop products that could be licensed to outside users and thus create a revenue stream for NASD members," one observer said.

Announcing the appointment of Cangiano, Mary Shapiro, president of NASD Regulation, said the effective use of technology is extremely critical to NASD Regulation's continuing and future success as a regulator.

"Jim is a recognized leader in maximizing the integration of sophisticated technology into day-to-day operations, as is evidenced by our world-class surveillance systems," she said.

Cangiano, who is currently in charge of the implementation of the Order Audit Trail, or OATS, will continue with the responsibility during his transition to NasTech. He had spent 13 years in his post at market regulation.

NASD Regulation named Stephen Luparello as the incoming senior vice president of market regulation. Previously, he was an NASD Regulation vice president.

Earlier, Luparello had a short stint as executive assistant to the chairman at the Commodity Futures Trading Commission. Before that, he was with the Securities and Exchange Commission from 1986 to 1994.