METHOD AND SYSTEM FOR COMPUTER-IMPLEMENTED TRADING OF SECONDARY MARKET DEBT SECURITIES

• US 20090327159A1
• Filed: 09/08/2009
• Published: 12/31/2009
• Est. Priority Date: 12/22/2000
• Status: Active Grant

• Current Assignee: MarketAxess Holdings Inc.
• Original Assignee: MarketAxess Holdings Inc.
• Inventors: MOSELEY, Rachel, SCHIFFMAN, Richard J., AGARWAL, Brijesh
• Granted Patent: US 8,185,465 B2
• Time in Patent Office: Days
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A computer-implemented method and system for trading of debt securities (bonds), where multiple dealers participate and compete on a single platform (100). Dealers and investors have respective interfaces (250, 230) for communicating. In one aspect, dealers announce new debt security issues (400), the investors communicate an indication of interest (IOI) (500) in purchasing the new debt security issues, and the issues are allocated to the investors. In another aspect, issues from multiple dealers are made available to investors on a secondary trading market in a searchable format (1000). In response to price inquires sent by the investors (1200), the dealers provide offers (1300) which are briefly held and released to the investor concurrently to allow the investor to consider all offers together. In another aspect, the dealers post bid and offer terms for actively traded issues (1700) that are updated in real-time to avoid the need for the inquiry procedure.

Claims

1. A method for providing computer-implemented trading for securities, comprising:

enabling providing respective computer-generated interfaces for a plurality of dealers and a plurality of investors via a communications network enabling messages to be exchanged between the dealer interfaces and the investor interfaces;

enabling the plurality of dealers to communicate an inventory of security issues to the plurality of investors via the investor interfaces;

enabling at least one of the plurality of investors to submit an inquiry, via at least one of the investor interfaces, for trading at least one of the security issues to the plurality of the dealers;

enabling the plurality of dealers to provide at least one of an offer and a bid, via the dealer interfaces, in response to the at least one inquiry;

at least temporarily storing the at least one offer and bid provided by at least one of the plurality of dealers;

releasing the at least one offer and bid to the plurality of investors concurrently; and

transmitting for display to the plurality of investors the inventory of the security issues on a standardized and sortable manner that are being at least one of offered and bid on by the plurality of dealers including issue identifier, coupon rate, details of each of the at least one of the dealer bid and offer, and status of an indicated price, thereby providing the plurality of investors information to determine in real-time which of the plurality of dealers provides the favored terms for the securities issue.

2. The method of claim 1, wherein:

the inquiry places the dealers in competition with one another regarding the security issue.

3. The method of claim 1, further comprising enabling the at least one of the plurality of investors to designate the inquiry as a firm price inquiry.

4. The method of claim 1, further comprising enabling the at least one of the plurality of investors to designate the inquiry as price subject inquiry.

5. The method of claim 1, further comprising enabling the at least one of the plurality of investors to set a time limit for the dealers to respond to the inquiry.

6. The method of claim 1, further comprising setting a default time limit for the plurality of dealers to respond to the inquiry.

7. The method of claim 1, further comprising enabling the plurality of dealers to set respective time limits for the at least one of the plurality of investors to respond to the at least one dealer offer and bid.

8. The method of claim 1, further comprising setting a default time limit for the at least one of the plurality of investors to respond to the at least one dealer offer and bid.

9. The method of claim 1, further comprising informing the plurality of dealers via the dealer interfaces that they are in competition with one another.

10. The method of claim 1, further comprising enabling the at least one of the plurality of investors to designate, via the inventor interface, whether the plurality of dealers are informed via the dealer interfaces that they are in competition with one another.

11. The method of claim 1, wherein multiple offers are provided by the plurality of dealers at different times.

12. The method of claim 1, further comprising informing the at least one of the plurality of investors, via the inventor interface, when multiple offers are received from the plurality of dealers.

13. The method of claim 1, further comprising informing the at least one of the plurality of investors, via the investor interface, when at least one of the plurality of dealers submits a pass on the inquiry.

14. The method of claim 1, further comprising enabling the plurality of dealers and the at least one of the plurality of investors to negotiate spot details for trading of the issues via the dealer and investor interfaces.

15. The method of claim 1, further comprising enabling the plurality of dealers and the at least one of the plurality of investors to negotiate benchmark details for trading of the issues via the dealer and investor interfaces.

16. The method of claim 1, wherein the inventory of the security issues provides details for each of the securities issue, including at least one of a size, rating, issuer, spread, benchmark, dealer identifier, and time update field.

17. The method of claim 1, further comprising transmitting non-standard details of the inquiry to the dealer interfaces.

18. The method of claim 1, further comprising enabling the plurality of investors to enter customized search criteria for searching the inventory via the investor interfaces.

19. The method of claim 1, wherein the plurality of dealer interfaces communicate with a database via at least one network for exchanging messages with the investor interfaces;

and the investor interfaces communicate with the database via a secure connection for exchanging messages with the dealer interfaces.

20. The method of claim 1, further comprising enabling the at least one of the plurality of investors to specify which of the plurality of dealers will receive the inquiry.

21. The method of claim 1, further comprising the steps of:

receiving from the plurality of investors inquiry details, inquiry size, inquiry type, and a benchmark;

receiving from at least one of the plurality of investors at least one specific dealer to send the inquiry allowing the investor to target the at least one specific dealer to negotiate the price for the security issue; and

receiving from at least one of the plurality of investors a firm price signaling that the investor intends to trade the security issue or an indication only, which is subject to subsequent agreement on the price of the issue.

22. The method of claim 1, further comprising the steps of:

transmitting to the plurality of dealers selected by the plurality of investors details relating to the investor, including the investor identity and the investor inquiry; and

transmitting to the plurality of investors responses to the investor inquiry received from the plurality of dealers.

23. The method of claim 1, further comprising the steps of:

Transmitting, when present, to the plurality of investors the bids, offers and counter offers simultaneously for consideration by the plurality of investors; and

receiving an acceptance from at least one of the plurality of investors;

initiating spot negotiations between the at least one of the plurality of investors and at least one of the plurality of dealers wherein the investor confirms the spot versus a benchmark;

receiving at least one of an acceptance and a re-spot of the benchmark from the at least one of the plurality of investors via a counteroffer to complete the trade.

24. The method of claim 1, further comprising the steps of:

enabling the at least one of the plurality of investors to initiate negotiation with at least one of the plurality of dealers in response to the at least one of an offer and bid provided by the at least one of the plurality of dealers; and

enforcing limits on said negotiation.

25. The method of claim 24, further comprising the steps of:

receiving from at least one of the plurality of investors at least one of an acceptance of an offer, acceptance of a bid, and a counteroffer responsive to the spreads determined for the traded security;

when a counteroffer is received from at least one of the plurality of investors, receiving from at least one of the plurality of dealers a further offer or bid in response; and

repeating the negotiation between the plurality of dealers and the plurality of investors until at least one of the bid, offer and counteroffer is accepted.

26. The method of claim 1, wherein the at least one of the plurality of investors is enabled to set a time limit including a default time for the dealers to respond to the inquiry.

27. The method of claim 26, wherein the plurality of dealers are enabled to set respective time limits for the at least one of the plurality of investors to respond to the at least one of the dealers offer.

28. The method of claim 27, wherein the at least one of the plurality of investors is informed, via the investor interface, when multiple offers are received from the plurality of dealers.

29. The method of claim 28, wherein the at least one of the plurality of investors is informed, via the investor interface, when one of the plurality of dealers submits a pass on the inquiry.

30. The method of claim 29, wherein the plurality of dealers and the at least one of the plurality of investors are enabled to negotiate at least one of spot details and benchmark details for trading of the issues via the dealer and the investor interfaces.

31. The method of claim 1, further comprising:

receiving a selection, by the plurality of investors, different inventories from the available inventory, using a plurality of filters for displaying of the different inventories comprising offers, bids, and actively-traded securities; and

sorting the different inventories according to a plurality of fields including size, rating, issuer, ticker, coupon, maturity, spread, benchmark, dealer, and update time when details of an different inventories are updated responsive to communications received from at least one of the plurality of the dealers and investors.

32. A method for providing computer-implemented trading for securities, comprising:

enabling providing respective computer-generated interfaces for a plurality of dealers and a plurality of investors via a communications network enabling messages to be exchanged between the dealer interfaces and the investor interfaces;

enabling the plurality of dealers to communicate an inventory of security issues to the plurality of investors via the investor interfaces;

enabling at least one of the plurality of investors to submit an inquiry, via at least one of the investor interfaces, for trading at least one of the security issues to the plurality of the dealers;

enabling the plurality of dealers to provide at least one of an offer and a bid, via the dealer interfaces, in response to the at least one inquiry;

at least temporarily storing the at least one offer and bid provided by at least one of the plurality of dealers;

releasing the at least one offer and bid to the plurality of investors concurrently;

transmitting to the plurality of dealers information to inform each of the plurality of dealers of competition between the plurality of dealers;

receiving a selection from the plurality of investors of the plurality of dealers;

transmitting to the plurality of dealers selected by the plurality of investors details relating to the investor, including the investor identity and the investor inquiry;

transmitting to the plurality of investors responses to the investor inquiry received from the plurality of dealers;

initiating spot negotiations between the at least one of the plurality of investors and at least one of the plurality of dealers wherein the investor confirms the spot versus a benchmark; and

receiving at least one of an acceptance and a re-spot of the benchmark from the at least one of the plurality of investors via a counteroffer to complete the trade.

33. The method of claim 32, further comprising enabling the at least one of the plurality of investors to designate the inquiry as one of a firm price inquiry and a price subject inquiry.

34. The method of claim 32, further comprising enabling the at least one of the plurality of investors to set a time limit for the dealers to respond to the inquiry.

35. The method of claim 32, further comprising setting a default time limit for the plurality of dealers to respond to the inquiry.

36. The method of claim 32, further comprising enabling the plurality of dealers to set respective time limits for the at least one of the plurality of investors to respond to the at least one dealer offer and bid.

37. The method of claim 32, further comprising setting a default time limit for the at least one of the plurality of investors to respond to the at least one dealer offer and bid.

38. The method of claim 32, further comprising enabling the at least one of the plurality of investors to designate, via the inventor interface, whether the plurality of dealers are informed via the dealer interfaces that they are in competition with one another.

39. The method of claim 32, further comprising enabling the plurality of dealers and the at least one of the plurality of investors to negotiate benchmark details for trading of the issues via the dealer and investor interfaces.

40. The method of claim 32, further comprising the steps of:

receiving from the plurality of investors inquiry details, inquiry size, inquiry type, and a benchmark;

receiving from at least one of the plurality of investors at least one specific dealer to send the inquiry allowing the investor to target the at least one specific dealer to negotiate the price for the security issue; and

receiving from at least one of the plurality of investors a firm price signaling that the investor intends to trade the security issue or an indication only, which is subject to subsequent agreement on the price of the issue.

41. The method of claim 32, further comprising the steps of:

enabling the at least one of the plurality of investors to initiate negotiation with at least one of the plurality of dealers in response to the at least one of an offer and bid provided by the at least one of the plurality of dealers; and

enforcing limits on said negotiation.

42. The method of claim 32, further comprising:

receiving a selection, by the plurality of investors, different inventories from the available inventory, using a plurality of filters for displaying of the different inventories comprising offers, bids, and actively-traded securities; and

sorting the different inventories according to a plurality of fields including size, rating, issuer, ticker, coupon, maturity, spread, benchmark, dealer, and update time when details of an different inventories are updated responsive to communications received from at least one of the plurality of the dealers and investors.

43. A method for providing computer-implemented trading for securities, comprising:

enabling providing respective computer-generated interfaces for a plurality of dealers and a plurality of investors via a communications network enabling messages to be exchanged between the dealer interfaces and the investor interfaces;

enabling the plurality of dealers to communicate an inventory of security issues to the plurality of investors via the investor interfaces;

enabling at least one of the plurality of investors to submit an inquiry, via at least one of the investor interfaces, for trading at least one of the security issues to the plurality of the dealers;

enabling the plurality of dealers to provide at least one of an offer and a bid, via the dealer interfaces, in response to the at least one inquiry;

at least temporarily storing the at least one offer and bid provided by at least one of the plurality of dealers;

releasing the at least one offer and bid to the plurality of investors concurrently; and

transmitting to the plurality of dealers information to inform each of the plurality of dealers of competition between the plurality of dealers;

transmitting to the plurality of investors responses to the investor inquiry received from the plurality of dealers;

determining from the available inventory of the available issues, most actively traded issues based on size of the traded security; and

designating the identified most actively traded issues in separate categories, including at least one of financials, industrials, utilities, international organizations.

44. The method of claim 43, further comprising enabling the at least one of the plurality of investors to designate the inquiry as one of a firm price inquiry and a price subject inquiry.

45. The method of claim 43, further comprising enabling the at least one of the plurality of investors to set a time limit for the dealers to respond to the inquiry.

46. The method of claim 43, further comprising setting a default time limit for the plurality of dealers to respond to the inquiry.

47. The method of claim 43, further comprising enabling the plurality of dealers to set respective time limits for the at least one of the plurality of investors to respond to the at least one dealer offer and bid.

48. The method of claim 43, further comprising setting a default time limit for the at least one of the plurality of investors to respond to the at least one dealer offer and bid.

49. The method of claim 43, further comprising enabling the at least one of the plurality of investors to designate, via the inventor interface, whether the plurality of dealers are informed via the dealer interfaces that they are in competition with one another.

50. The method of claim 43, further comprising enabling the plurality of dealers and the at least one of the plurality of investors to negotiate spot details for trading of the issues via the dealer and investor interfaces.

51. The method of claim 43, further comprising enabling the plurality of dealers and the at least one of the plurality of investors to negotiate benchmark details for trading of the issues via the dealer and investor interfaces.

52. The method of claim 43, further comprising the steps of:

receiving from the plurality of investors inquiry details, inquiry size, inquiry type, and a benchmark;

receiving from at least one of the plurality of investors at least one specific dealer to send the inquiry allowing the investor to target the at least one specific dealer to negotiate the price for the security issue; and

receiving from at least one of the plurality of investors a firm price signaling that the investor intends to trade the security issue or an indication only, which is subject to subsequent agreement on the price of the issue.

53. The method of claim 43, further comprising the steps of:

transmitting, when present, to the plurality of investors the bids, offers and counter offers simultaneously for consideration by the plurality of investors; and

receiving an acceptance from at least one of the plurality of investors;

initiating spot negotiations between the at least one of the plurality of investors and at least one of the plurality of dealers wherein the investor confirms the spot versus a benchmark;

receiving at least one of an acceptance and a re-spot of the benchmark from the at least one of the plurality of investors via a counteroffer to complete the trade.

54. The method of claim 43, further comprising the steps of:

enabling the at least one of the plurality of investors to initiate negotiation with at least one of the plurality of dealers in response to the at least one of an offer and bid provided by the at least one of the plurality of dealers; and

enforcing limits on said negotiation.

55. The method of claim 43, further comprising:

receiving a selection, by the plurality of investors, different inventories from the available inventory, using a plurality of filters for displaying of the different inventories comprising offers, bids, and actively-traded securities; and

sorting the different inventories according to a plurality of fields including size, rating, issuer, ticker, coupon, maturity, spread, benchmark, dealer, and update time when details of an different inventories are updated responsive to communications received from at least one of the plurality of the dealers and investors.

56. The method of claim 43, further comprising the steps of:

transmitting to the plurality of dealers selected by the plurality of investors details relating to the investor, including the investor identity and the investor inquiry; and

transmitting to the plurality of investors responses to the investor inquiry received from the plurality of dealers.