Method and system for facilitating secure transactions

• US 20030004859A1
• Filed: 01/02/2002
• Published: 01/02/2003
• Est. Priority Date: 05/11/1999
• Status: Abandoned Application

• Current Assignee: Stonefish LLC
• Original Assignee: Stonefish LLC
• Inventors: Joyce, Thomas P., Alex, Mike N., Speers, Daniel E., Shaw, John C., Holway, Richard A., Nikolai, James D., Hilsenrath, Saul D.
• Application Number:
  US10/032,535
• Publication Number:
  US 20030004859A1
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A secure, computer based method and system for anonymously and confidentially matching indications of interest from potential buyers and sellers is disclosed which facilitates human intervention for negotiating a final transaction between matched parties. Potential buyers and sellers independently enter indications of interest into a central processing system which operates on a network containing a secure station and a plurality of remote user terminals linked to the secure station. The indications identify a security (such as a trading equity), price, type of order, duration, and other related information. A memory at the secure station stores user data and multiple prospective transaction entries received from the user terminals. Indications of interest are compared against those already in the system to determine whether buy side and sell side orders are sufficiently similar to generate a match. When a match occurs, each party and/or its authorized representative is given contact information for the other party and/or its authorized representative to facilitate negotiation of a final transaction. Transacting parties remain anonymous, and transaction information remains confidential, until a match occurs. Transacting parties have an option of adding conditions such as acceptable price, amount and time limits, to their prospective transaction entries. Other options enable parties to place such entries in a pending mode in which the entry is not compared with other entries, and later change the mode form pending to active.

Claims

1. A method for anonymously and confidentially identifying contraparties to transaction and notifying an authorized representative of the contraparties to contact the contraparties in order to negotiate a transaction, comprising the steps of:

receiving indications of interest from potential buyers and potential sellers into a central processing system, each indication of interest involving a purchase or sale of a specific item;

anonymously comparing indications of interest received from potential buyers with indications of interest received from potential sellers within the central processing system to determine whether a match has occurred;

identifying contraparties to a transaction based on said determination of whether a match has occurred;

notifying the authorized representative of the contraparties that a match has occurred;

providing contact information to the authorized representative to allow the authorized representative to contact the contraparties so that a transaction can be negotiated between the contraparties; and

consummating the transaction between the contraparties through direct negotiation between the authorized representative and the contraparties.

2. The method of claim 1, wherein at least one of the received indications of interest involves the purchase or sale of an equity security.

3. The method of claim 1, wherein at least one of the received indications of interest involves the purchase or sale of a debt security.

4. The method of claim 1, wherein at least one of the received indications of interest involves the purchase or sale of a derivative security.

5. The method of claim 1, wherein at least one of the received indications of interest contains a limit as to the acceptable price per unit of the specific item that is the subject of its associated transaction.

6. The method of claim 1, wherein at least one of the received indications of interest contains a limit as to the minimum acceptable total value of its associated transaction.

7. The method of claim 1, wherein at least one of the received indications of interest contains a limit as to the minimum acceptable number of units to be purchased or sold in connection with a transaction.

8. The method of claim 1, wherein at least one of the received indications of interest includes ancillary information not used in determining whether a match has occurred in said comparing step but which is transmitted to a matched contraparty during said consummating the transaction step to assist in negotiations between the contraparties.

9. The method of claim 5, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any price per unit limits established by each of the potential buyer and the potential seller are satisfied.

10. The method of claim 6, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any minimum acceptable total values of the transaction established by each of the potential buyer and the potential seller, respectively, are satisfied.

11. The method of claim 7, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any minimum acceptable number of units established by each of the potential buyer and the potential seller, respectively, is satisfied.

12. The method of claim 1, wherein said providing step also includes providing contact information directly to the contraparties.

13. The method of claim 1, wherein a match is not determined to have occurred between a potential buyer and a potential seller in said comparing step unless all input fields making up the indication of interest entered by the potential buyer matches all input fields making up the indication of interest entered by the potential seller.

14. The method of claim 1, wherein a match is determined to have occurred between a potential buyer and a potential seller in said comparing step even though all input fields making up the indication of interest entered by the potential buyer do not match all input fields making up the indication of interest entered by the potential seller.

15. The method of claim 1, wherein an indication of interest from a potential buyer is not received into the central processing system unless the potential buyer makes a good faith deposit.

16. The method of claim 1, wherein an indication of interest from a potential seller is not received into the central processing system unless the potential seller makes a minimum firm commitment.

17. The method of claim 1, further comprising the step of reporting the consummation and terms of the transaction to the central processing system.

19. The method of claim 18, wherein at least one of the received indications of interest involves the purchase or sale of an equity security.

20. The method of claim 18, wherein at least one of the received indications of interest involves the purchase or sale of a debt security.

21. The method of claim 18, wherein at least one of the received indications of interest involves the purchase or sale of a derivative security.

22. The method of claim 18, wherein at least one of the received indications of interest contains a limit as to the acceptable price per unit of the specific item that is the subject of its associated transaction.

23. The method of claim 18, wherein at least one of the received indications of interest contains a limit as to the minimum acceptable total value of its associated transaction.

24. The method of claim 18, at least one of the received indications of interest contains a limit as to the minimum acceptable number of units to be purchased or sold in connection with a transaction.

25. The method of claim 18, wherein at least one of the received indications of interest includes ancillary information not used in determining whether a match has occurred in said comparing step but which is transmitted to the authorized representatives during said consummating the transaction step to assist in negotiations between the contraparties.

26. The method of claim 22, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any price per unit limits established by each of the potential buyer and the potential seller are satisfied.

27. The method of claim 23, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any minimum acceptable total values of the transaction established by each of the potential buyer and the potential seller, respectively, are satisfied.

28. The method of claim 24, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any minimum acceptable number of units established by each of the potential buyer and the potential seller, respectively, is satisfied.

29. The method of claim 18, wherein contact information for the authorized representatives are also disclosed directly to the respective contraparties in said providing step.

30. The method of claim 18, wherein a match is not determined to have occurred between a potential buyer and a potential seller in said comparing step unless all input fields making up the indication of interest entered by the potential buyer matches all input fields making up the indication of interest entered by the potential seller.

31. The method of claim 18, wherein a match is determined to have occurred between a potential buyer and a potential seller in said comparing step even though all input fields making up the indication of interest entered by the potential buyer do not match all input fields making up the indication of interest entered by the potential seller.

32. The method of claim 18, wherein an indication of interest from a potential buyer is not received into the central processing system unless the potential buyer makes a good faith deposit.

33. The method of claim 18, wherein an indication of interest from a potential seller is not received into the central processing system unless the potential seller makes a minimum firm commitment.

34. The method of claim 18, further comprising the step of reporting the consummation and terms of the transaction to the central processing system.

36. The method of claim 35, wherein at least one of the received indications of interest involves the purchase or sale of an equity security.

37. The method of claim 35, wherein at least one of the received indications of interest involves the purchase or sale of a debt security.

38. The method of claim 35, wherein at least one of the received indications of interest involves the purchase or sale of a derivative security.

39. The method of claim 35, wherein at least one of the received indications of interest contains a limit as to the acceptable price per unit of the specific item that is the subject of its associated transaction.

40. The method of claim 35, wherein at least one of the received indications of interest contains a limit as to the minimum acceptable total value of its associated transaction.

41. The method of claim 35, wherein at least one of the received indications of interest contains a limit as to the minimum acceptable number of units to be purchased or sold in connection with a transaction.

42. The method of claim 35, wherein at least one of the received indications of interest includes ancillary information not used in determining whether a match has occurred in said comparing step but which is transmitted to a matched contraparty during said consummating the transaction step to assist in negotiations between the contraparties.

43. The method of claim 39, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any price per unit limits established by each of the potential buyer and the potential seller are satisfied.

44. The method of claim 40, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any minimum acceptable total values of the transaction established by each of the potential buyer and the potential seller, respectively, are satisfied.

45. The method of claim 41, wherein a match between a potential buyer and a potential seller is not determined to have occurred in said comparing step unless any minimum acceptable number of units established by each of the potential buyer and the potential seller, respectively, is satisfied.

46. The method of claim 35, wherein a match is not determined to have occurred between a potential buyer and a potential seller in said comparing step unless all input fields making up the indication of interest entered by the potential buyer matches all input fields making up the indication of interest entered by the potential seller.

47. The method of claim 35, wherein a match is determined to have occurred between a potential buyer and a potential seller in said comparing step even though all input fields making up the indication of interest entered by the potential buyer do not match all input fields making up the indication of interest entered by the potential seller.

48. The method of claim 35, wherein an indication of interest from a potential buyer is not received into the central processing system unless the potential buyer makes a good faith deposit.

49. The method of claim 35, wherein an indication of interest from a potential seller is not received into the central processing system unless the potential seller makes a minimum firm commitment.

50. The method of claim 35, further comprising the step of reporting the consummation and terms of the transaction to the central processing system.

18. A method for anonymously and confidentially identifying contraparties to a transaction and introducing authorized representatives of each respective contraparty to each other in order for the authorized representatives to negotiate a transaction, comprising the steps of:

receiving indications of interest from potential buyers and potential sellers into a central processing system, each indication of interest involving a purchase or sale of a specific item;

anonymously comparing indications of interest received from potential buyers with indications of interest from potential sellers within the central processing system to determine whether a match has occurred;

identifying contraparties to a transaction based on said determination of whether a match has occurred;

notifying the contraparties and their respective authorized representatives that a match has occurred;

providing contact information to each of the authorized representatives to allow the authorized representatives of the contraparties to contact each other so that a transaction can be negotiated between the contraparties; and

consummating the transaction between the contraparties through direct negotiation between the authorized representatives of the contraparties.

35. A method for anonymously and confidentially identifying contraparties to a transaction and disclosing contact information of the contraparties between the contraparties in order to allow them to negotiate a transaction, comprising the steps of:

receiving indications of interest from potential buyers and potential sellers into a central processing system, each indication of interest involving a purchase or sale of a specific item;

anonymously comparing indications of interest received from potential buyers with indications of interest from potential sellers within the central processing system to determine whether a match has occurred;

identifying contraparties to a transaction based on said determination of whether a match has occurred;

notifying each of the contraparties to a transaction that a match has occurred;

providing contact information to each of the contraparties to a transaction to allow the contraparties to contact each other to negotiate their transaction; and

consummating the transaction between the contraparties through direct negotiation between the contraparties.

51. An information management system for confidentially identifying contraparties to a transaction and introducing them and/or their agents to each other in order to allow them to negotiate the transaction, consisting of:

means for receiving indications of interest from potential buyers and potential sellers into a central processing system;

means for confidentially and anonymously comparing the received indications of interest from potential buyers and potential sellers to determine whether a match has occurred, and thus whether contraparties to a transaction have been identified; and

means for informing identified contraparties that a match has occurred and for providing contact information between the identified contraparties so that further negotiations may take place between the contraparties to consummate their mutually desired transaction.

52. A secure system for facilitating the trading of fungible commodities, including:

a network, including a secure station and a plurality of remote user terminals having respective user identities and communicatively linked to the secure station for data transmission between the secure station and the user terminals;

a memory at the secure station for storing user data and for storing transaction data in the form of multiple prospective transaction entries received from the user terminals, each of the entries including a fungible item indication and a transaction side indication identifying one of two opposing transaction sides;

a search component operatively coupled to the memory, adapted to perform a comparison of the stored entries with respect to the fungible item indications and the transaction side indications and, based on said comparison, to select sets of two or more of the stored entries as matching entries having the same fungible item indication and together including transaction side indications identifying the opposing transaction sides;

a message sending component operatively coupled to the search component and to the memory and adapted, in response to the selection of each said set of matching entries, to generate a prospective transaction message including the transaction indication and the user identity corresponding to each of the matching entries, and further adapted to provide the prospective transaction message to the user terminals associated with said corresponding user identities, thus to facilitate an interaction among users associated with the user terminals to complete a transaction involving the fungible item; and

a data security component for restricting access to any given prospective transaction entry stored in the memory to (i) the user identity corresponding to the given entry; and

(ii) the user identities corresponding to the other entries in any of said sets of entries that includes the given entry.

53. The system of claim 52 wherein:

said message sending component provides the prospective transaction message substantially simultaneously to the user terminals associated with said corresponding user identities.

54. The system of claim 52 further including:

a menu for enabling users to select fungible item indications corresponding to different types of fungible items.

55. The system of claim 54 wherein:

said menu is stored in the memory.

56. The system of claim 52 wherein:

the data security component includes a plurality of user pages maintained at the secure station, each of the user pages being associated with and accessible only by one of the users.

57. The system of claim 52 wherein:

each of the prospective transaction entries includes a further indication selected from a group of further indications consisting of;

an amount indication designating an amount of the fungible item corresponding to the fungible item indication;

a price indication designating an acceptable price or an acceptable price range; and

a time limit indication.

58. The system of claim 57 wherein the further indication is an amount indication, and further includes:

an apportionment component, responsive to the selection of a set of matching entries that includes at least two entries having the same transaction side, for apportioning the designated amount of the fungible item among the user identities corresponding to the given transaction side.

59. The system of claim 57 wherein:

the memory includes an active segment for storing prospective transaction entries with none of said further indications and for storing entries including further indications that are satisfied; and

a suspended segment for storing prospective transaction entries including a further indication which is not satisfied;

wherein the secure station further includes an entry monitoring component operatively associated with the active and suspended segments, for repeatedly monitoring the entries that include a further indication, to determine whether that further indication is satisfied; and

wherein said search component performs said comparison only upon the entries stored in the active segment of the memory.

60. The system of claim 59 wherein:

the memory further includes a pending segment for storing prospective transaction entries designated as pending by the corresponding users, and a means for shifting an entry from the pending segment to the active segment responsive to a signal from the corresponding user terminal activating the entry.

61. The system of claim 52 further including:

a status designation component enabling each user to alternatively designate a prospective transaction entry as active or pending;

wherein the memory includes an active memory segment for storing entries designated active, and an inactive segment for storing entries designated as pending; and

means for transferring an entry from one of said segments to the other in response to a change in the designation.

62. A process for facilitating the trading of fungible commodities, including:

receiving, from a plurality of remote user locations, user information including user identities, and transaction information in the form of prospective transaction entries, each of the entries including a fungible item indication and a transaction side indication identifying one of two opposing transaction sides;

storing the user information and the prospective transaction entries to a memory;

searching the memory to perform a comparison of the stored entries with respect to the fungible item indications and the transaction side indications;

based on said comparison, selecting matching entries to form sets of two or more of the matching entries having the same fungible item indication and together including transaction side indications identifying the opposing transaction sides;

in response to selecting each of the sets of entries, generating a prospective transaction message including the transaction indication and user identity corresponding to each of the matching entries, and providing the prospective transaction message to the user locations associated with the corresponding user identities, thereby to enable the associated users to contact one another toward a completion of transaction involving the fungible item; and

restricting access to any given prospective transaction entry to (i) the user identity corresponding to the given entry; and

(ii) the user identities corresponding to the other entries in any of said sets of entries that includes the given entry.

63. The process of claim 62 wherein:

said providing the prospective transaction message includes providing said message substantially simultaneously to the user terminals associated with the corresponding user identities.

64. The process of claim 62 further including:

prior to receiving the prospective transaction entries from a given user, authorizing the given user based on the given user'"'"'s meeting of predetermined qualification requirements.

65. The process of claim 62 wherein:

said restricting access includes maintaining at the secure location a plurality of user pages, each user page personalized to and accessible only by an associated one of the user locations.

66. The process of claim 62 wherein each of the prospective transition entries further optionally includes a condition, and the process further includes:

identifying the prospective transaction entries that includes a condition, and monitoring each of the entries so identified to determine whether the associated condition is satisfied.

67. The process of claim 62 wherein:

at least a portion of the prospective transaction entries include an amount indication associated with the fungible item indication, and the process further includes;

responsive to the selection of a set that includes at least two entries with the same transaction side indication, apportioning the fungible item among the users indicating said same side of the transaction.