The National Association of Securities Dealers Inc. has signed a 10- year outsourcing contract with Electronic Data Systems Corp.

The deal, worth $1.5 billion to $2 billion, is one of the largest of its kind in the financial services industry.

EDS holds the biggest outsourcing contract-a 10-year, $3.8 billion deal with Commonwealth Bank of Australia, signed in 1997.

EDS and NASD said they plan to create a joint venture, Nastech, to improve the systems that support the regulatory and supervisory activities of NASD and its subsidiary, NASD Regulation Inc.

"This is about enabling regulators to have the tools to keep up with the markets as they change," said Mary Schapiro, president of NASD Regulation Inc.

"We will take a more risk-based approach to regulatory filing."

NASD expects to save more than $500 million over the life of the contract.

EDS is to take over software application development and maintenance, Internet and intranet development, support for distributed systems, and data center operations.

The Nastech venture is to develop various Web-based reporting tools, including one for filing broker-dealer financial and operational reports. It is also intended to increase market surveillance in response to the rising volume of stock market transactions.

More than 350 information technology people employed by NASD are to join EDS on July 1.

All would go to work for Nastech, whose offices are to be in NASD's Rockville, Md., technology center.

EDS is to manage another 350 third-party consultants and coordinate NASD's relationships with 100 vendors.

"We will get a better service from having one relationship than from having 100," said Gregor S. Bailar, executive vice president and chief information officer at NASD.

He said Nastech has four objectives: to increase the predictability and reliability of NASD's operational environment, reduce the risk of system failures, increase the effectiveness of information services to users, and reduce technology costs.

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