Systems, methods and computer program products for monitoring credit risks in electronic trading systems
First Claim
1. A system for credit screening a proposed electronic trade of a derivative between a first trader and a second trader, comprising:
- means for receiving first credit preference information of said first trader with respect to said second trader, wherein said first credit preference information relates to at least one derivative, and wherein said first credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
means for receiving second credit preference information of said second trader with respect to said first trader, wherein said second credit preference information relates to at least one derivative, and wherein said second credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
means for evaluating said first and second credit preferences with respect to the trade of a first derivative to determine respective trade eligibility of said first and second traders to trade with each other; and
means for reporting said respective trade eligibility of said proposed electronic trade to said first trader and said second trader.
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0 Petitions
Accused Products
Abstract
A credit monitoring system in an electronic trading system forms a complex check to determine if two particular counterparties will except each other for a particular trade based upon their respective predefined credit preferences. In accordance with an embodiment, credit preferences imputed by each counterparty with regard to the other counterparty are referenced to determine the trade eligibility of either party with respect to the other for a particular financial transaction instrument. Indication of whether a counterparty can enter into the proposed trade is conveyed to the respective trader, preferably using a color coding scheme in which various colors represent the relevant credit status with regard to the viewing trader. The complex check performed by the system may be embodied in a simple yes/no statement, in terms of maturity of a particular financial instrument, or in terms of a risk quotient (i.e., risk equivalent or RQ) initially determined by the system, though modifiable by the trader.
868 Citations
32 Claims
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1. A system for credit screening a proposed electronic trade of a derivative between a first trader and a second trader, comprising:
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means for receiving first credit preference information of said first trader with respect to said second trader, wherein said first credit preference information relates to at least one derivative, and wherein said first credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
means for receiving second credit preference information of said second trader with respect to said first trader, wherein said second credit preference information relates to at least one derivative, and wherein said second credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
means for evaluating said first and second credit preferences with respect to the trade of a first derivative to determine respective trade eligibility of said first and second traders to trade with each other; and
means for reporting said respective trade eligibility of said proposed electronic trade to said first trader and said second trader. - View Dependent Claims (2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12)
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13. A method for screening order information proposing a trade of a derivative via an electronic trading system, comprising the steps of:
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receiving first credit preference information defined by a first trader with respect to a second trader, wherein said first credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
receiving second credit preference information defined by the second trader with respect to the first trader, wherein said second credit preference information is comprised of at least one of contract maturity and formulated risk equivalent; and
encoding the order information that is presented to the first and second traders proposing the trade to provide respective trade eligibility utilizing the first and second credit preference information. - View Dependent Claims (14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26)
requesting an order quantity from said first trader by said second trader, wherein said step of requesting includes providing an identity of said second trader to said first trader; and
responding to said request to said second trader by said first trader with a response consisting of an accept message, a decline message or a modified order quantity.
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27. A computer program product for use with a data processing system for credit screening of order information proposing a trade of a derivative via an electronic trading system, said computer program product comprising:
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a computer usable medium having computer-readable code means embodied in said medium, said computer-readable code means comprising;
computer readable program code, means for receiving first credit preference information of said first trader with respect to said second trader, wherein said first credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
computer readable program code means for receiving second credit preference information of said second trader with respect to said first trader, wherein said second credit preference information is comprised of at least one of contract maturity and formulated risk equivalent;
computer readable program code means for evaluating said first and second credit preferences with respect to the trade of a first derivative to determine respective trade eligibility of said first and second traders to trade with each other; and
computer readable program code means for reporting said respective trade eligibility of said proposed trade to said first trader and said second trader. - View Dependent Claims (28, 29, 30, 31, 32)
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Specification