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93-58 NASD Member Buying Services Provides Members With Discounted Products And Services

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Executive Summary

The NASD® has created a Member Buying Services department and consolidated responsibility for the operation of its existing sponsored programs under the Member Services business line.

The mission of Member Buying Services is to provide members with group purchasing opportunities that reduce their costs and promote their efficiency.

During the coming year, the new department will focus on enhancing existing services and the value they provide to members. In early 1994, Member Buying Services will survey members to measure their satisfaction with existing programs and identify additional services that, because of its membership, the NASD can either acquire for firms or provide for firms at a deeper discount.

The existing NASD-sponsored programs under Member Buying Services are: the NASD/MCI Long-Distance Communications Program, NASD Member Firm Insurance Program, NASD Registered Representative Insurance Program, and the NASD Fidelity Bond, State Surety Bond, and Signature Guarantee Bond Programs.

Background

The NASD sponsored its first program in 1949 with a group life insurance plan for members, and in 1953 added major medical and dental. In 1982, to help members obtain the requisite fidelity bond coverage at cost effective rates, the NASD sponsored a fidelity bond program. In 1991, MCI joined with the NASD to offer members discounted rates on long-distance voice and data communications.

Placing responsibility for group purchasing programs under one business line will result in a coordinated effort to identify members' needs and in the introduction of new services. The business line will also monitor the competitiveness of sponsored programs to ensure that members continue to receive the best possible service and value. The NASD staff and its contracted agents will also mediate disputes with the service providers, if needed.

Please contact Dean Boyle at (301) 590-6525 with your questions concerning this Notice. For additional information on any of the Member Buying Services programs described below, call the number listed at the end of the program description.

NASD/MCI Long-Distance Communications Program

The NASD/MCI program offers participating NASD members savings of up to 30 percent on comprehensive voice and data telecommunications services. As an added NASD membership benefit, each participating firm also receives a rebate directly from the NASD based on their monthly MCI usage. In 1992, the NASD rebated approximately $2.4 million to the 650 participating firms.

The NASD sponsors eight different MCI services with a program to fulfill every firm's communications needs. The three most popular MCI services offered and their discounted rates before the NASD rebate are:

  • MCI 800 Service provides nationwide and international coverage, single-number dialing, choice of dedicated or switched lines, Direct Termination Overflow (automatically switches 800-line call overflow to a normal business line so that customers never get a busy signal), and routing and coverage control. MCI discounts are 21 to 27 percent off MCI's rates based on usage.

  • MCI Vision gives firms the ability to customize long-distance coverage based on specific needs, including flexible access, flat-rate pricing, and the option of a single invoice for multiple locations. Discounts are 7 to 22 percent off all domestic and interstate usage.

  • VNET service lets firms use part of MCI's public switched network as if it were a private network providing the benefits of customized dialing and consolidated billing, MCI network management capabilities, and reporting and configuration management. Member firm discounts are 3 to 21 percent off based on interstate rates.

In addition to MCI's regular services, a special calling card is available to member firms. The Nasdaq/MCI * Card provides members with real-time stock quotes, voice news, conference calling, speed dialing, and voice messaging capability.

For more information about the NASD/MCI special discount program, contact your local MCI account representative or call (800) 627-3276.

NASD Member Firm Insurance Program

The NASD Member Firm Insurance Plan is designed for member firms with two to 50 employees. The plan with The Travelers offers eligible firms a number of insurance options for Major Medical, Dental, Term Life, and Accidental Death and Dismemberment (AD&D). Over the past several months, revisions to the program have made it competitive across the United States based on price and options.

The NASD Member Firm Insurance Plan is available to qualified member firms in all 50 states and the District of Columbia. The plan is tailored on a state-by-state basis to ensure that it conforms to each state's laws and regulations.

The NASD plan offers members options for all major types of medical insurance to meet almost any budget. The plan currently offers three comprehensive medical options, four term life and AD&D options, and two dental programs.

The NASD's plan administrator, Seabury & Smith, is available to work with members to help assess their insurance requirements, determine eligibility for the plan, and provide quotes for comparison to existing insurance premiums and features.

For additional information on the NASD Member Firm Insurance Program, please contact Patrick Mulkey at (800) 424-9883, extension 354, or, in the District of Columbia, at (202) 457-6820.

NASD Registered Representative Insurance Program

The Registered Representative Insurance Program makes insurance available to employees of members that cannot provide coverage for their employees or for employees not qualified for the member's plan. The NASD must receive authorization to enroll employees from a member firm before its employees can participate in the program.

The plan offers competitive rates on Accidental Death and Dismemberment, Long-Term Disability, and Term-Life Insurance through CIGNA. National Casualty underwrites the Major Medical portion of the plan that is available to qualified participants.

Please contact Jeanne Law at (800) 336-0883, or, in the District of Columbia, at (202) 293-0883, for additional information on the plan and the types of coverage offered in your state.

NASD Fidelity Bond Program

The Fidelity Bond Program provides members with fidelity bond protection in coverage amounts from $25,000 to $500,000. More than 3,300 member firms are covered under the plan that provides fidelity coverage for losses resulting from destruction or fraudulent acts by employees, loss of property on premises, loss of property in transit, etc. NASD rules require fidelity bond coverage.

Seabury & Smith is the plan administrator and the fidelity bond is underwritten by National Union Fire Insurance Company.

For additional information on the plan, please contact Kathryn Jacobson at (800) 922-9242 or (202) 296-9640 in the District of Columbia.

NASD State Surety Bond Program

The NASD also sponsors a State Surety Bond Program that is available to members in all states that require a Surety Bond for broker/ dealer registration. This bond provides third-party protection to the public and enables an aggrieved individual to put in a claim under the bond for a broker/dealer's noncompliance with the state's statute. Currently, more than 1,300 NASD members participate in this program.

For more information, please contact Kathy Jacobson at Seabury & Smith, (800) 922-9242 or (202) 296-9640.

Signature Guarantee Bond Program

The Signature Guarantee Bond Program is available to NASD members that serve as guarantors of signatures. This bond is required by Rule 17AD-15 of the Securities Exchange Act of 1934. Currently, more than 300 NASD members participate in the program.

For more information, please contact Kathy Jacobson at Seabury & Smith, (800) 922-9242 or (202) 296-9640.


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