METHOD AND SYSTEM FOR FACILITATING INTERNATIONAL SECURITIES TRADING

• US 20110087582A1
• Filed: 09/30/2010
• Published: 04/14/2011
• Est. Priority Date: 10/09/2009
• Status: Abandoned Application

• Current Assignee: Chi-Fx LLC
• Original Assignee: Instinet Incorporated
• Inventors: TRUDEAU, Matthew N., PAK, James S.
• Application Number:
  US12/894,445
• Publication Number:
  US 20110087582A1
• 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

Abstract

A method and a system for facilitating international securities trading include receiving market data specified in the local currency of a market center. The system includes a central platform that provides foreign executable currency quotes, which can be used to convert the market center'"'"'s central limit order book into multiple foreign currencies. Orders specified in a foreign currency are converted to the local currency and placed with the market center. When two orders are matched, the system handles execution of a foreign exchange (FX) portion of the order based on the best FX quote provided by an FX liquidity provider, locked in at the time of receipt of the order.

Claims

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

at least one computer processor performing the following;

receiving market data from a local market center, the market data including a bid price and an offer price from an order at the local market center, the prices being specified using a local currency;

receiving at least one foreign exchange (FX) quote from at least one FX liquidity provider (LP), each FX quote having at least one of a buy rate and a sell rate for converting between the local currency and a foreign currency;

generating a synthetic order book by converting the bid prices into the foreign currency using a best available buy rate and converting the offer prices into the foreign currency using a best available sell rate; and

transmitting a synthetic quote to a foreign investor, the synthetic quote including price information for a best priced order of the synthetic order book.

2. The method of claim 1, further comprising:

receiving a securities order provided on behalf of the foreign investor, the securities order being specified using the foreign currency;

responsive to receiving the securities order, utilizing an FX quote having a buy/sell rate determined to be the best available rate at the time the securities order is received;

converting the securities order into the local currency based on the utilized FX quote;

transmitting the converted securities order to the local market center; and

responsive to receiving an indication of successful execution of the order, transmitting an execution report.

3. The method of claim 2, wherein utilizing the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received includes locking in the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received, the method further comprising:

releasing the utilized FX quote after whichever occurs of a successful execution of the securities order, a cancellation of the securities order, and a revision of the securities order.

4. The method of claim 2, wherein the transmittal of the converted securities order is conditional upon a determination that an FX liquidity provider participating in an FX transaction component of the securities order has sufficient credit to execute the FX transaction.

5. The method of claim 4, further comprising:

transmitting an error report when it is determined that the FX liquidity provider has insufficient credit to execute the FX transaction.

6. The method of claim 2, wherein utilizing the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received includes locking in the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received, the method further comprising:

receiving a request to one of modify and cancel the utilized FX quote, wherein the request is queued with respect to the securities order pending a determination of an outcome of the securities order.

7. The method of claim 2, further comprising:

responsive to partial execution of the securities order;

converting a remaining unexecuted portion of the securities order into a new order; and

transmitting the new order to the local market center.

8. The method of claim 1, further comprising:

determining that a local broker does not have an existing agreement with the FX liquidity provider who provided the FX quote having the best available buy/sell rate; and

substituting, for the best buy/sell rate, the next best buy/sell rate for which there exists a bi-lateral agreement between the local broker and the FX liquidity provider who provided the FX quote associated with next best buy/sell rate.

9. The method of claim 1, wherein each FX quote includes a notional value indicating a maximum volume of currency the FX liquidity provider is willing to exchange at the specified buy and sell rates.

10. A system for facilitating securities trading, comprising:

a central computer configured to;

receive market data from a local market center, the market data including a bid price and an offer price from an order at the local market center, the prices being specified using a local currency;

receive at least one foreign exchange (FX) quote from at least one FX liquidity provider (LP), each FX quote having a buy rate and a sell rate for converting between the local currency and a foreign currency;

generate a synthetic order book by converting the bid prices into the foreign currency using a best available buy rate and converting the offer prices into the foreign currency using a best available sell rate; and

transmit a synthetic quote to a foreign investor, the synthetic quote including price information for a best priced order of the synthetic order book.

11. The system of claim 10, wherein the central computer is configured to:

receive a securities order provided on behalf of the foreign investor, the securities order being specified using the foreign currency;

responsive to receiving the securities order, utilize an FX quote having a buy/sell rate determined to be the best available rate at the time the securities order is received;

convert the securities order into the local currency based on the utilized FX quote;

transmit the converted securities order to the local market center; and

responsive to receiving an indication of successful execution of the order, transmit an execution report.

12. The system of claim 11, wherein:

utilization of the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received includes locking in the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received; and

the central computer is configured to release the utilized FX quote after whichever occurs of a successful execution of the securities order and a cancellation of the securities order.

13. The system of claim 11, wherein the transmittal of the converted securities order is conditional upon a determination that an FX liquidity provider participating in an FX transaction component of the securities order has sufficient credit to execute the FX transaction.

14. The system of claim 13, wherein the central computer is configured to transmit an error report when it is determined that the FX liquidity provider has insufficient credit to execute the FX transaction.

15. The system of claim 11, wherein:

utilization of the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received includes locking in the FX quote having the buy/sell rate determined to be the best available rate at the time the securities order is received;

the central computer is configured to receive a request to one of modify and cancel the utilized FX quote; and

the request is queued with respect to the securities order pending a determination of an outcome of the securities order.

16. The system of claim 11, wherein the central computer is configured to:

responsive to partial execution of the securities order;

convert a remaining unexecuted portion of the securities order into a new order; and

transmit the new order to the local market center.

17. The system of claim 10, wherein the central computer is configured to:

determine that a local broker does not have an existing agreement with the FX LP who provided the FX quote having the best available buy/sell rate; and

substitute, for the best buy/sell rate, the next best buy/sell rate for which there exists a bi-lateral agreement between the local broker and the FX LP who provided the FX quote associated with next best buy/sell rate.

18. The system of claim 10, wherein each FX quote includes a notional value indicating a maximum value of currency the FX LP is willing to exchange at the specified buy and sell rates.

19. A hardware-implemented computer-readable storage medium having stored thereon a series of instructions executable by a processor of a security transaction-assisting machine, the instructions which, when executed, cause the processor to perform a method, the method comprising:

receiving market data from a local market center, the market data including a bid price and an offer price from an order at the local market center, the prices being specified using a local currency;

receiving at least one foreign exchange (FX) quote from at least one FX liquidity provider (LP), each FX quote having a buy rate and a sell rate for converting between the local currency and a foreign currency;

generating a synthetic order book by converting the bid prices into the foreign currency using a best available buy rate and converting the offer prices into the foreign currency using a best available sell rate; and

transmitting a synthetic quote to a foreign investor, the synthetic quote including price information for a best priced order of the synthetic order book.

20. The storage medium of claim 19, the method further comprising:

receiving a securities order on behalf of the foreign investor, the securities order being specified using the foreign currency;

responsive to receiving the securities order, utilizing an FX quote having a buy/sell rate determined to be the best available rate at the time the securities order is received;

converting the securities order into the local currency based on the utilized FX quote;

transmitting the converted securities order to the local market center; and

responsive to receiving an indication of successful execution of the order, transmitting an execution report.

21. A computer-implemented method for facilitating securities trading, comprising:

one or more computer processors performing the following;

obtaining market data including at least one price quote expressed according to a first currency;

obtaining an exchange rate quote for converting a number of units of the first currency into a number of units of a second currency;

based on the exchange rate quote, modifying the price quote for expression according to the second currency; and

transmitting the modified price quote for output at an investor device.

22. The method of claim 21, further comprising:

responsive to the receipt of an order, the one or more computer processors locking in one of the obtained exchange rate quote and a new exchange rate quote for a pendency of the order.

23. A computer-implemented method for facilitating securities trading, comprising:

one or more computer processor performing the following;

receiving an exchange rate quote for converting a number of units of a first currency into a number of units of a second currency;

while the received exchange rate quote is open, receiving an order specifying value units expressed according to one of the first and second currencies; and

responsive to receipt of the order;

locking in the exchange rate quote for the pendency of the order;

converting the received order into a modified order specifying value units expressed according to the other of the first and second currencies; and

transmitting the modified order for execution.

24. A computer-implemented method for facilitating securities trading, comprising:

one or more computer processors performing the following;

obtaining one or more market quotes regarding an asset, each specifying (a) a respective price expressed according to a first currency and (b) a respective number of shares;

obtaining an order regarding the asset specifying a number of units of a second currency;

obtaining an exchange rate quote for converting a number of units of the first currency into a number of units of the second currency;

based on the one or more market quotes and the exchange rate quote, determining whether there are available a sufficient quantity of the asset for a position opposite to that of the order to execute the order at the specified number of second currency units; and

executing the order responsive to a positive result of the determining step.

25. The method of claim 24, wherein the order is executed at the obtained exchange rate.

26. The method of claim 25, further comprising:

locking in the exchange rate quote at least upon the positive result of the determining step;

converting a number of units of the first currency into a number of units of the second currency at the locked in exchange rate quote after successful execution of the order; and

releasing the exchange rate quote after unsuccessful execution of the order.