Securities brokerage-cash management system

• US 4,376,978 A
• Filed: 10/22/1980
• Issued: 03/15/1983
• Est. Priority Date: 07/29/1980
• Status: Expired due to Term

• Current Assignee: Bank of America Corp.
• Original Assignee: Merrill Lynch Pierce Fenner & Smith Incorporated (Bank of America Corp.)
• Inventors: Musmanno, Thomas E.
• Primary Examiner(s): Smith, Jerry
• Application Number:
  US06/199,408
• Time in Patent Office: 874 Days
• Field of Search: 364/200, 364/300, 364/408, 364/900
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 20/403 Solvency checks
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Data processing for an improved securities brokerage/cash management system supervises, implements and coordinates a margin securities brokerage account; participation in one or more short term money market or comparable funds; and subscriber-initiated use of electronically responsive subscriber identity credit/debit media and/or checking systems. Subscriber expenditures, effected as by "charge card" use, check and/or cash advance are applied on a hierarchal basis, seriatim, against the subscriber'"'"'s free credit balance, short term investment and the lendable equity in his securities account. On a periodic basis, e.g., daily, received card charges, check, securities and deposit transactions for the ensemble of account participants are verified and employed to compute an updated credit limit for each subscriber. The transactional data is reviewed against predetermined norms to detect abuses such as check kiting. The short term investment position of each account is modified as necessary to permit money market or comparable earned yields on the account free credit cash balance.

Claims

1. In combination in a system for processing and supervising a plurality of composite subscriber accounts each comprising a margin brokerage account, subscriber implemented funds withdrawal means administered by institution means, and participation in at least one short term investment, manual entry means being employed for entering short term investment orders, brokerage account data file magnetic storage means for storing current information characterizing each subscriber margin brokerage account, means for receiving and verifying subscriber funds withdrawal transactions from said institution means and short term investment orders from said manual entry means, generating an updated credit limit for each account operating upon said brokerage account data file and said received and verified information, said updated credit limits for said plural subscriber accounts being communicated to said first institution, means for selectively generating short term investment transactions as required to generate and invest proceeds from said subscriber'"'"'s accounts, said system further including plural such short term investments, and means for allocating said short term investment transactions to at least a predetermined one of said plural short term investments.

2. The system as in claim 1 further comprising means for generating a stored record of each subscriber deposit, and subscriber implemented withdrawal transaction, and means for providing an output alert record responsive to either of said deposits, or the subscriber implemented withdrawals exceeding predetermined maximum bounds in amount and frequency.

3. A system as in claim 1 or 2 wherein said updated credit limit generating means comprises means for generating a subscriber updated credit limit measured by the difference between the limiting residual subscriber brokerage account securities loan value contained in said brokerage account data file means augmented by the value of the subscriber'"'"'s short term investment, decremented by the value of the subscriber'"'"'s aggregate expenditures and funds required for brokerage account purposes.

4. A system as in claim 3 further comprising means for generating a subscriber loan record when the subscriber'"'"'s aggregated expenditures exceed the value of the short term investments and securities loan value as reported by said brokerage account data file means.

5. A system as in claim 1 wherein said receiving and verifying means includes means for verifying that received transactions are for customers having an entry in a cross reference file means.

6. A system as in claim 5, wherein said short term investment transactions generating means comprises short term investment account buying means and selling means, means computing the difference between the brokerage account cash balance of said brokerage account data file and fund requirements representing the sum of the account expenditures and funds required for brokerage account and settlement purposes, and means activating either said short term investment buying means or selling means depending upon whether said account balance difference computing senses a positive or negative difference.