Systems and methods for monitoring credit of trading couterparties

• US 20020032635A1
• Filed: 01/05/2001
• Published: 03/14/2002
• Est. Priority Date: 01/06/2000
• Status: Active Grant

• Current Assignee: BGC Partners LP (BGC Group, Inc.)
• Original Assignee: BGC Partners Incorporated (BGC Group, Inc.)
• Inventors: Turetsky, Janna, Deb, Aniruddha, Harris, Stewart, De Latorre, Azucena
• Granted Patent: US 7,917,423 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Systems and methods are provided which monitor trades entered into and cleared by counterparties, track the net and gross positions of counterparties and the counterparties'"'"' parent entities, trigger warnings when counterparties or their parent entities exceed a warning limit, and shut-off counterparties'"'"' trading ability when counterparties exceed a credit limit. An operator of a credit system using these systems and methods is provided with a variety of interfaces through which the operator can set up new counterparties, search a list of counterparties, view and edit basic information for counterparties, view financial information for counterparties, view and edit notes regarding to counterparties, view and edit limits of counterparties, view position versus limit information for counterparties, view the current day'"'"'s position information for counterparties, and view cumulative position information for counterparties.

Claims

1. A method for monitoring credit of a counterparty having a parent entity, comprising:

receiving trade information relating to trades entered into by the counterparty;

accumulating positions for the counterparty indicated by the trade information with previously accumulated positions;

accumulating positions for the parent entity indicated by the trade information with previously accumulated positions;

comparing at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading limit; and

shutting off trading for the counterparty when at least one of the accumulated counterparty positions and the accumulated parent entity positions exceeds the at least one trading limit.

2. The method of claim 1, further comprising:

receiving trade information relating to at least one of cleared trades and failed trades;

adjusting accumulated counterparty positions based upon the trade information relating to the at least one of the cleared trades and the failed trades; and

adjusting accumulated parent entity positions based upon the trade information relating to the at least one of the cleared trades and the failed trades.

3. The method of claim 1, further comprising accumulating counter party positions based upon long-bond-equivalents.

4. The method of claim 1, further comprising accumulating parent entity positions based upon long-bond-equivalents.

5. The method of claim 1, further comprising updating an operator interface that shows the accumulated counterparty positions.

6. The method of claim 1, further comprising updating an operator interface that shows the accumulated parent entity positions.

7. The method of claim 1, wherein the comparing of at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading limit comprising:

determining whether the at least one trading limit includes a limit for the accumulated counterparty positions; and

comparing the accumulated counterparty positions to the limit for the accumulated counterparty positions when the limit exists.

8. The method of claim 1, wherein the comparing of at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading limit comprising:

determining whether the at least one trading limit includes a limit for the accumulated parent entity positions; and

comparing the accumulated parent entity positions to the limit for the accumulated parent entity positions when the limit exists.

9. The method of claim 1, further comprising sending a message to indicate when trading for the counterparty has been shut off.

10. The method of claim 1, further comprising:

comparing at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading warning level; and

sending a message to indicate when at least one of the accumulated counterparty positions and the accumulated parent entity positions exceeds the at least one trading warning level.

11. The method of claim 1, further comprising providing an operator interface that prompts an operator to specify the at least one trading limit.

13. The system of claim 12, further comprising a clearing system that provides trade information relating to at least one of cleared trades and failed trades, wherein the credit processor also receives trade information relating to at least one of cleared trades and failed trades, adjusts accumulated counterparty positions based upon the trade information relating to the at least one of the cleared trades and the failed trades, and adjusts accumulated parent entity positions based upon the trade information relating to the at least one of the cleared trades and the failed trades.

14. The system of claim 12, wherein the credit processor also accumulates counter party positions based upon long-bond-equivalents.

15. The system of claim 12, wherein the credit processor also accumulates parent entity positions based upon long-bond-equivalents.

16. The system of claim 12, wherein the credit processor also updates an operator interface that shows the accumulated counterparty positions.

17. The system of claim 12, wherein the credit processor also updates an operator interface that shows the accumulated parent entity positions.

18. The system of claim 12, wherein the credit processor in comparing of at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading limit:

determines whether the at least one trading limit includes a limit for the accumulated counterparty positions; and

compares the accumulated counterparty positions to the limit for the accumulated counterparty positions when the limit exists.

19. The system of claim 12, wherein the credit processor in comparing of at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading limit:

determines whether the at least one trading limit includes a limit for the accumulated parent entity positions; and

compares the accumulated parent entity positions to the limit for the accumulated parent entity positions when the limit exists.

20. The system of claim 12, wherein the credit processor also sends a message to indicate when trading for the counterparty has been shut off.

21. The system of claim 12, wherein the credit processor also:

compares at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading warning level; and

sends a message to indicate when at least one of the accumulated counterparty positions and the accumulated parent entity positions exceeds the at least one trading warning level.

22. The system of claim 12, wherein the credit processor also provides an operator interface that prompts an operator to specify the at least one trading limit.

12. A system for monitoring credit of a counterparty having a parent entity, comprising:

a trading system the provides trade information relating to trades entered into by the counterparty; and

a credit processor that;

receives the trade information relating to the trades entered into by the counterparty,

accumulates positions for the counterparty indicated by the trade information with previously accumulated positions,

accumulates positions for the parent entity indicated by the trade information with previously accumulated positions,

compares at least one of accumulated counterparty positions and accumulated parent entity positions with at least one trading limit; and

shuts off trading for the counterparty when at least one of the accumulated counterparty positions and the accumulated parent entity positions exceeds the at least one trading limit.