System and method for conducting web-based financial transactions in capital markets

• US 6,347,307 B1
• Filed: 06/13/2000
• Issued: 02/12/2002
• Est. Priority Date: 06/14/1999
• Status: Expired due to Term

• Current Assignee: Integral Development Corp.
• Original Assignee: Integral Development Corp.
• Inventors: Sandhu, Harpal S., Rees, Stephen, Tolat, Viral V.
• Primary Examiner(s): Hafiz, Tariq R.
• Application Number:
  US09/593,324
• Time in Patent Office: 609 Days
• Field of Search: 705/35, 705/36, 705/37
• US Class Current: 705/36.00R
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

The present invention provides a system and method that enables users, such as institutional investors and financial institutions, to engage in capital market transactions, including the trading of Over-the-Counter financial products, via the Internet (including the World Wide Web). The system includes a variety of servers, applications, and interfaces that enable users to interactively communicate and trade financial instruments among one another, and to manage their portfolios. Interactive communications supported by the system include: requesting price quotes, monitoring and reviewing quote requests, issuing price quotes, monitoring and reviewing price quotes, negotiation between users, acceptance of price quotes, reporting, portfolio management, analysis of financial information and market data, calendaring, and communications among users and/or system administrators, including e-mail, chat, and message boards.

The present invention also supports communications with the server side in an automated manner via an automated processor. Such automated communications enable connectivity with users'"'"' internal, back-end systems to execute automated, straight-through processing, including transaction pricing, payment scheduling and journaling, derivatives trading, trade confirmation, and trade settlement. Such communications are facilitated using a novel XML-based syntax (FinXML™) and XSL-based processing language (FinScript™). FinXML provides a standard data interchange language for capital market transactions and supports a broad set of elements and attributes that represent a wide variety of financial transactions, reference data, and market data. The common description of the FinXML syntax can be used for all aspects of straight-through-processing, including deal creation, confirmation, settlement, payment, risk management, and accounting.

Claims

1. A system for facilitating transactions involving the exchange of financial instruments, the system comprising:

(a) a transaction data parser that can extract transaction data describing a transaction conducted using the system, wherein the transaction data can include;

(i) a type of the transaction;

(ii) a plurality of parties to the transaction, including a member user and a provider user selected by the member user from a plurality of provider users;

(iii) a payment schedule pursuant to which a first party to the transaction will make one or more payments to a second party to the transaction; and

(iv) rate information which can include information relating to an interest rate or an exchange rate that can affect the calculation of the amount of one or more of the payments made pursuant to the payment schedule;

(b) a reference data parser that can extract profile information about the parties to the transaction; and

(c) a market data parser that can extract market data provided to the system, the market data including market interest rates or currency exchange rate.

2. The system of claim 1 wherein the type of the transaction is a foreign exchange spot.

3. The system of claim 1 wherein the type of the transaction is a foreign exchange forward.

4. The system of claim 1 wherein the type of the transaction is an interest rate fixed-float swap.

5. The system of claim 1 wherein the type of the transaction is an interest rate float-float swap.

6. The system of claim 1 wherein the type of the transaction is an interest rate cap.

7. The system of claim 1 in which the type of the transaction is an interest rate floor.

8. The system of claim 1 wherein the type of the transaction is a fixed deposit.

9. The system of claim 1 wherein the type of the transaction is a fixed loan.

10. The system of claim 1 wherein the type of the transaction is a float deposit.

11. The system of claim 1 wherein the type of the transaction is a float loan.

12. The system of claim 1 wherein the type of the transaction is a foreign exchange option.

13. The system of claim 1 wherein the type of the transaction is a foreign exchange swap.

14. The system of claim 1 wherein the type of the transaction is a cross currency fixed-fixed swap.

15. The system of claim 1 wherein the type of the transaction is a cross currency fixed-float swap.

16. The system of claim 1 wherein the type of the transaction is a cross currency float-float swap.

17. The system of claim 1 wherein the type of the transaction is a forward rate agreement.

18. The system of claim 1 wherein the type of the transaction is a customized trade.

19. A system for facilitating transactions involving the exchange of financial instruments, the system comprising:

(a) a member client node that can be used by a member user of the system to conduct a transaction;

(b) a provider client node that can be used by a provider user of the system to conduct the transaction with the member user; and

(c) a server node that facilitates the exchange of messages among the member client and provider client nodes, including a transaction message that includes information describing the transactions between the member user and the provider user, the server node including;

(i) an interactive trading mechanism that enables the member user to select the provider user from a plurality of provider users and to interactively negotiate the terms of the transaction with the selected provider user; and

(ii) an automated messaging system that facilitates the automated exchange of the transaction message between the server node and the provider client node.

20. The system of claim 19 wherein the messages whose exchange is facilitated by the server node can include:

(a) transaction data describing the transaction, including;

(i) a type of the transaction;

(ii) a plurality of parties to the transaction, including the member user and the provider user;

(iii) a payment schedule pursuant to which the member user will make one or more payments to the provider user; and

(iv) rate information which can include information relating to an interest rate or an exchange rate that can affect the calculation of the amount of one or more of the payments made pursuant to the payment schedule;

(b) reference data, including profile information about the parties to the transaction; and

(c) market data, including market interest rate or currency exchange rates.

21. The system of claim 19 wherein the negotiated terms include pricing of the transaction.

22. The system of claim 19 wherein the negotiated terms include acceptance of the pricing of the transaction.

23. The system of claim 19 wherein the negotiated terms include settlement of the transaction.

24. The system of claim 19 wherein both the member client node and the provider client node are physically remote from the server node.

25. An automated financial object conversion and messaging system for exchanging messages describing transactions involving the exchange of financial instruments between a provider user of the system and one or more other member users of the system, the system comprising:

(a) a server node that can convert a first set of internal objects, representing the terms of a transaction between the provider user and a member user of the system, into a transaction message employing a standard format for representing the transaction, wherein the first set of internal objects employs any format that can be utilized by a back-end system of the member user;

(b) a provider node that can convert the transaction message into a second set of internal objects, wherein the second set of internal objects employs any format that can be utilized by a back-end system of the provider user; and

(c) an automated message exchange mechanism that automatically can exchange messages employing the standard format, including the transaction message, between the server node and the provider node.

26. The system of claim 25 wherein the standard format is an XML format.

27. The system of claim 26 wherein the XML format can represent:

(a) transaction data describing the transaction, including;

(i) a type of the transaction;

(ii) a plurality of parties to the transaction, including the provider user and the member user of the system;

(iii) a payment schedule pursuant to which the member user will make one or more payments to the provider user; and

(iv) rate information which can include information relating to an interest rate or an exchange rate that can affect the calculation of the amount of one or more of the payments made pursuant to the payment schedule;

(b) reference data, including profile information about the parties to the transaction; and

(c) market data, including market interest rate or currency exchange rates.

28. A method for converting a first set of internal objects, representing the terms of a transaction involving the exchange of financial instruments between a provider user and a member user of a system for facilitating transactions involving the exchange of financial instruments, into a transaction message employing a standard format for representing the transaction, the method comprising the following steps:

(a) applying an XML mapping to the first set of internal objects in order to dynamically generate a Document Object Model tree; and

(b) applying an XSL stylesheet to convert the Document Object Model tree into the transaction message, wherein the transaction message includes transaction data describing the transaction, including;

(i) a type of the transaction;

(ii) a plurality of parties to the transaction, including the member user and a provider user selected by the member user from a plurality of provider users;

(iii) a payment schedule pursuant to which the member user will make one or more payments to the provider user; and

(iv) rate information which can include information relating to an interest rate or an exchange rate that can affect the calculation of the amount of one or more of the payments made pursuant to the payment schedule.

29. The method of claim 28 wherein the standard format is an XML format.

30. The method of claim 28 wherein the first set of internal objects includes Java objects.

31. A method for converting a transaction message employing a standard format for representing the terms of a transaction involving the exchange of financial instruments between a provider user and a member user of a system for facilitating transactions involving the exchange of financial instruments, and a first set of internal objects representing the transaction, the method comprising the following steps:

(a) applying an XSL stylesheet to the transaction message in order to dynamically generate a JavaScript program; and

(b) executing the JavaScript program to produce the first set of internal object, wherein the transaction message includes transaction data describing the transaction, including;

(i) a type of the transaction;

(ii) a plurality of parties to the transaction, including the member user and a provider user selected by the member user from a plurality of provider users;

(iii) a payment schedule pursuant to which the member user will make one or more payments to the provider user; and

(iv) rate information which can include information relating to an interest rare or an exchange rate that can affect the calculation of the amount of one or more of the payments made pursuant to the payment schedule.

32. The method of claim 31 wherein the standard format is an XML format.

33. The method of claim 31 wherein the first set of internal objects includes Java objects.