METHOD AND SYSTEM FOR ADMINISTERING A DISCOUNTED SECURITY

• US 20110060679A1
• Filed: 11/11/2010
• Published: 03/10/2011
• Est. Priority Date: 01/25/2001
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Seaman, David A.
• Granted Patent: US 8,219,475 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• 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

Abstract

An exchangeable security, tradable on a securities exchange is issued at a share price that is a discount from the share price of an underlying security or basket of underlying securities. At or prior to maturity of the exchangeable security, a holder of the exchangeable security may exchange a share of the exchangeable security for a share of the underlying security or basket of underlying securities. The exchangeable security may also include a linked payment that is redeemable for the full amount of the payment on maturity of the exchangeable security. Alternatively, the exchangeable security may be issued at the share price of the underlying security with the linked payment. The invention provides methods for issue, trade and redemption as well as systems for issue, trade and redemption of the security.

Claims

1. :

A computer-implemented financial method, said method comprising the steps of;

determining, using the programmed computer, a discount price of an underlying security at a first time;

offering, using the programmed computer, an exchangeable security at the discounted price of the underlying security;

calculating, using the programmed computer, a payment amount;

delivering, using the programmed computer, the payment amount at a second time; and

exchanging, using the programmed computer, a share of the underlying security for a share of the exchangeable security at the second time, the second time after the first time.

2. :

A method according to claim 1, wherein the payment amount is equal to the amount of the discount of the underlying security.

3. :

A method according to claim 1, wherein the payment amount is more than or less than the amount of the discount of the underlying security.

4. :

A method according to claim 1, wherein the discount price of the underlying security is based on a market price of a share of the underlying security.

5. :

A method according to claim 1, wherein the discount price of the underlying security is based on a closing price of a share of the underlying security.

6. :

A method according to claim 1, wherein the underlying security is a basket of securities and exchanging a share of the underlying security for a share of the exchangeable security at the second time further comprises exchanging, using the programmed computer, the basket of securities for a share of the exchangeable security.

7. :

A method according to claim 1, wherein the second time is a defined period after the first time, the defined period selected from the group including one month, one quarter, semi-annual, single year and multiple years.

8. :

A method according to claim 1, wherein the second time is two years after the first time.

9. :

A method according to claim 1, wherein exchanging the underlying security for the exchangeable security further comprises;

receiving, using the programmed computer, a share of the exchangeable security; and

delivering, using the programmed computer, a share of the underlying security.

10. :

A method according to claim 1, wherein exchanging the underlying security for the exchangeable security further comprises;

receiving, using the programmed computer, a share of the exchangeable security; and

delivering, using the programmed computer, an amount representing the value of a share of the underlying security at the second time.

11-54. -54. (canceled)