Bank loan trading system and method

• US 6,691,094 B1
• Filed: 09/28/1999
• Issued: 02/10/2004
• Est. Priority Date: 09/28/1999
• Status: Expired due to Fees

• Current Assignee: Lee N. Herschkorn
• Original Assignee: Lee N. Herschkorn
• Inventors: Herschkorn, Lee N.
• Primary Examiner(s): Cuff, Michael
• Assistant Examiner(s): JAKETIC, BRYAN J
• Application Number:
  US09/406,885
• Time in Patent Office: 1,596 Days
• Field of Search: 705/26, 705/27, 705/35, 705/37
• US Class Current: 705/37
• CPC Class Codes: G06Q 30/0611 Request for offers or quotes
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

A bank loan trading system and method is provided to utilize an electronic facility to facilitate the trading of bank loans. Sellers and buyers enter offers and bids that are posted to all potential buyers and sellers, unless the orders are undisclosed. It is determined whether there is a match between one of the bids and one of the offers of the same loan. If an order can be filled, the system and method provide various confirmation techniques to ensure that a resultant trade does not violate the terms of the bank loan itself. If an order can be filled partially and the remaining portion of the order may be filled in part or in full, the party entering the initial partial order is given the choice of entering into the second trade. Buyers and sellers also can enter linked orders representing two different orders for the same loan and upon filling one of the linked orders, the other order is canceled.

Claims

1. A bank loan trading method for matching buyers with sellers of bank loans, comprising the steps of:

using a computer or other system to post to buyers and sellers bank loan information regarding bank loans for sale;

entering by one or more of said sellers offers for respective ones of the posted bank loans

entering by one or more of said buyers bids or respective ones of the posted bank loans;

posting to said buyers and sellers the bids and offers for each of the posted bank loans;

determining whether a match exists between one of said bids and one of said offers for the same bank loan;

filling the matching bid and offer by conducting a trade between the buyer entering said one of said bids and the seller entering said one of said offers; and

further comprising the steps of a buyer or a seller or both designating whether a partial order may be filled, for both bids and offers, are carried out by designating an All or None order, a Partial Fill order, or Partial Increments Only order;

said All or None order representing an order having a possible fill amount of only said bank loan dollar amount, said Partial Fill order representing an order having possible fill amounts of increments of a predetermined size greater than the unit of currency of said loan between and including a minimum size and said bank loan dollar amount, and said Partial Increments Only order representing an order having possible fill amounts of said minimum size, incremental amounts greater than said minimum size and less than said bank loan dollar amount in increments of an increment size greater than the unit of currency of said loan, and said bank loan dollar amount, said minimum size and said increment amount being designated by a seller entering said offer or a buyer entering said bid.

2. A bank loan trading method for matching buyers with sellers of bank loans, comprising the steps of:

using a computer or other system to post to buyers and sellers bank loan information regarding bank loans for sale;

entering by one or more of said sellers offers for respective ones of the posted bank loans;

confirming that filling any possible fill amounts of an entered order would not result in a violation of terms of the respective bank loan being offered;

entering by one or more of said buyers bids for respective ones of the posted bank loans;

posting to said buyers and sellers the bids and offers for each of the posted bank loans;

determining whether a match exists between one of said bids and one of said offers for the same bank loan; and

filling the matching bid and offer by conducting a trade between the buyer entering said one of said bids and the seller entering said one of said offers;

wherein the entered offers represent actual offers, and the step of posting the offers for each of the posted bank loans is carried out by rounding each of said actual offers to a nearest interval of a preset dollar amount to provide rounded offers and posting only the founded offers and said step of posting the bids and offers further includes the steps of determining whether each of said rounded offers is within a predetermined offset amount of the respective actual offer and posting information for each of the posted rounded offers indicating whether the respective rounded offer is within the predetermined offset amount of the actual offer.

3. The bank loan trading method of claim 2, wherein said preset dollar amount is $1,000,000, and said predetermined offset amount is $100,000.

4. The bank loan trading method of claim 2, wherein an offer of a subject loan has been posted and further comprising a step of entering by one of said buyers an order exact amount or less or an exact amount or more of said subject loan.

5. A bank loan trading method for matching buyers with sellers of bank loans, comprising the steps of:

using a computer or other system to post to buyers and sellers bank loan information regarding bank loans for sale;

entering by one or more of said sellers offers for respective ones of the posted bank loans;

confirming that filling any possible fill amounts of an entered order would not result in a violation of terms of the respective bank loan being offered;

entering by one or more of said buyers bids for respective ones of the posted bank loans;

posting to said buyers and sellers the bids and offers for each of the posted bank loans;

determining whether a match exists between one of said bids and one of said offers for the same bank loan;

filling the matching bid and offer by conducting a trade between the buyer entering said one of said bids and the seller entering said one of said offers;

wherein the entered offers represent actual offers, and the step of posting the offers for each of the posted bank loans is carried out by rounding each of said actual offers to a nearest interval of a preset dollar amount to provide rounded offers and posting only the rounded offers and the step of entering bids is carried out by entering only bids in intervals of said preset dollar amount; and

the step of determining whether a match exists is carried out by determining whether a match exists between a bid and the rounded offer for the same bank loan; and

the step of entering bids or offers further includes the steps of indicating, for each bid or offer, whether a partial order may be filled and entering partial amounts representing portions of said actual bid or actual offer that are acceptable to fill the bid or the offer, with such preset dollar amount being greater than the unit of currency of said loan.

6. A bank loan trading method for matching buyers, with sellers of bank loans, comprising the steps of:

using a computer or other system to post to buyers and sellers bank loan information regarding bank loans for sale;

entering by one or more of said sellers offers for respective ones of the posted bank loans;

confirming that filling any possible fill amounts of an entered order would not result in a violation of terms of the respective bank loan being offered;

entering by one or more of said buyers bids for respective ones of the posted bank loans;

posting to said buyers and sellers the bids and offers for each of the posted bank loans;

determining whether a match exists between one of said bids and one of said offers for the same bank loan; and

filling the matching bid and offer by conducting a trade between the buyer entering said one of said bids and the seller entering said one of said offers;

wherein each of said posted bank loans includes a respective minimum retained amount restriction that is greater than zero and the step of filling the matching bid and offer is carried out by conducting a trade representing an entire amount or a partial amount of the respective bank loan;

said bank loan trading process further comprising the steps of determining, when a partial amount of the respective bank loan can be traded, whether an amount of the loan to be retained by the respective seller if the respective;

loan is partially traded is greater than or equal to the minimum retained amount restriction of the respective loan; and

preventing the respective seller from entering the respective offer if the respective offer can result in an amount retained by the respective seller that is not greater than or equal to the minimum retained amount restriction of the respective loan.

7. A bank loan trading method for matching buyers with sellers of bank loans comprising the steps of:

using a computer or other system to post to buyers and sellers bank loan information regarding bank loans for sale;

entering by one or more of said sellers offers for respective ones of the posted bank loans;

entering by one or more of said buyers bids for respective ones of the posted bank loans;

posting to said buyers and sellers the bids and offers for each of the posted bank loans;

determining whether a match exists between one of said bids and one of said offers for the same bank loan;

filling the matching bid and offer by conducting a trade between the buyer entering said one of said bids and the seller entering said one of said offers;

wherein the step of entering bids further include the step of entering whether the respective bid is disclosed or undisclosed; and

the step of posting bids and offers posts only the disclosed bids and offers;

said bank loan trading method further comprising the step of determining whether a match exists between one of said bids and one of said offers for the same bank loan further includes the step of determining, if no match exists for a respective offer and said offer is undisclosed, whether one of said bids for the same bank loan as the undisclosed offer is within a predetermined amount of the undisclosed offer and advising both the respective seller that entered the undisclosed offer and the respective buyer that entered said one of said bids of a proximity of the undisclosed offer and said one of said bids.

8. A system for facilitating trading of bank loans between buyers and sellers comprising:

a storage device;

a processor connected to the storage device, the storage device storing a program for controlling the processor;

the processor operative with the program to;

post to buyers and sellers bank loan information regarding bank loans sale;

receive from one or more of said sellers offers for respective ones of the posted bank loans;

receive by one or more of said buyers bids for respective ones of the posted bank loans;

post to said buyers and sellers the bids and offers for each of the posted bank loans;

determine whether a match exists between one of said bids and one of said offers for the same bank loan;

wherein the received indication whether a partial order may be filled, for both bids and offers, designates an All or None order, a Partial Fill order, or a Partial Increments Only order as chosen by a buyer or a seller or both;

said All or None order representing an order having a possible fill amount of only said bank loan dollar amount, said Partial Fill order representing an order having possible fill amounts of increments of a predetermined size greater than the unit of currency of said loan between and including a minimum size and said bank loan dollar amount, and said Partial Increments Only order representing an order having possible fill amounts of said minimum size, incremental amounts greater than said minimum size and less than said bank loan dollar amount in increments of an increment size, greater than the unit of currency of said loan, and said bank loan dollar amount;

said processor further receiving said minimum size and said increment amount from a seller supplying an offer or from a buyer supplying a bid.

9. A system, for facilitating trading of bank loans between buyers and sellers comprising:

a storage device;

a processor connected to the storage device the storage device storing a program for controlling the processor;

the processor operative with the program to;

post to buyers and sellers bank loan information regarding bank loans for sale

receive from one or more of said sellers offers for respective ones of the posted bank loans;

confirm that filling any possible fill amounts of an entered order would not result in a violation of terms of the respective bank loan being offered;

receive by one or more of said buyers bids for respective ones of the posted bank loans;

post to said buyers and sellers the bids and offers for each of the posted bank loans;

determine whether a match exists between one of said bids and one of said offers for the same bank loan; and

notify the buyer entering said one of said bids and the seller entering said one of said offers that their respective bid and offer has been filled;

wherein the entered offers represent actual offers, and the processor operates to round each of said actual offers to a nearest interval of a preset dollar amount to provide rounded offers and to post only the rounded offers and said processor operates to determine whether each of said rounded offers is within a predetermined offset amount of the respective actual offer and to post to said buyers and sellers information for each of the posted rounded offers indicating whether the respective rounded offer is within the predetermined offset amount of the actual offer.

10. The system of claim 9, wherein said preset dollar amount is $1,000,000, and said predetermined offset amount is $100,000.

11. The system of claim 9, wherein an offer of a subject loan has been posted and said processor receives a bid from one of said buyers in an exact amount or less or an exact amount or more of said subject loan.

12. A system for facilitating trading of bank loans between buyers ad sellers, comprising:

a storage device;

a processor connected to the storage device, the storage device storing a program for controlling the processor;

the processor operative with the program to;

post to buyers and sellers bank loan information regarding bank loans for sale receive from one or more of said sellers offers for respective ones of the posted bank loans;

confirm that filling any possible fill amounts of an entered order would not result in a violation of terms of the respective bank loan being offered;

receive by one or more of said buyers bids for respective ones of the posted bank loans;

post to said buyers and seller the bids and offers for each of the posted bank loans;

determine whether a match exists between one of said bids and one of said offers for the same bank loan; and

notify the buyer entering said one of said bids and the seller entering said one of said offers that their respective bid and offer has been filled;

wherein the entered offers represent actual offers, and the processor operates to round each of said Actual offers to a nearest interval of a preset dollar amount to provide rounded offers and to post only the rounded offers, said processor operates to receive only bids in intervals of said preset dollar amount; and

to determine whether a match exists between a bid and the rounded offer for the same bank loan; and

said processor operates to receive an indication from sellers, for each bid or offer, whether a partial order may be filled to receive from the sellers partial amounts representing portions of said actual bid or offer that are acceptable to fill the bid or offer, with such preset dollar amount being greater than the unit of currency of said loan.

13. A system for facilitating trading of bank loans between buyers and sellers comprising:

a storage device;

a processor connected to the storage device;

the storage, device storing a program for controlling the processor;

the processor operative with the program to;

post to buyers and sellers bank, loan information regarding bank loans for sale

receive from one or more of said sellers offers for respective ones of the posted bank loans;

confirm that filling any possible fill amounts of an entered order would not result in a violation of terms of the respective bank loan being offered;

receive by one or more of said buyers bids for respective ones of the posted bank loans;

post to said buyers and sellers the bids and offers for each of the posted bank loans;

determine whether a match exists between one of said bids and one of said offers for the same bank loan; and

notify the buyer entering said one of said bids and the seller entering said one of said offers that their respective bid and offer has been filled;

wherein each of said posted bank loans includes a respective minimum retained amount restriction that is greater than zero and the processor operates to determine, when a partial amount of the respective bank loan can be traded, whether an amount of the loan to be retained by the respective seller if the respective loan is partially traded is greater than or equal to the minimum retained amount restriction of the respective loan; and

to cancel the respective offer if the respective offer can result in an amount retained by the respective seller that is not greater than or equal to the minimum retained amount restriction of the respective loan.

14. A bank loan trading method for matching buyers with sellers of ban loans, comprising the steps of:

A system for facilitating trading of ban loans between buyers and sellers, comprising;

a storage device;

a processor connected to the storage device, the storage device storing a program for controlling the processor;

the processor operative with the program to;

post to buyers and sellers bank loan information regarding bank loan for sale;

receive from one or more of said sellers offers for respective ones of the posted bank loans;

receive by one or more of said buyers bids for respective ones of the posted bank loans;

post to said buyers and sellers the bids and offers for each of the posted bank loans;

determine whether a match exists between one of said bids and one of said offers for the same bank loan; and

wherein said processor operates to receive from buyers indications, for each bid, whether the respective bid is disclosed or undisclosed; and

to post to buyers and sellers only the disclosed bids and offers and said processor further operates to determine, if no match exists for a respective offer and said offer is undisclosed, whether one of said bids for the same bank loan as the undisclosed offer is within a predetermined amount of the undisclosed offer and to inform both the respective seller that entered the undisclosed offer and the respective buyer that entered said one of said bids of a proximity of the undisclosed offer and said one of said bids.