Method and system for computer-implemented trading of new issue debt securities

• US 7,539,641 B2
• Filed: 02/13/2004
• Issued: 05/26/2009
• Est. Priority Date: 12/22/2000
• Status: Active Grant

• Current Assignee: MarketAxess Holdings Inc.
• Original Assignee: MarketAxess Holdings Inc.
• Inventors: Moseley, Rachel, Agarwal, Brijesh, Schiffman, Richard J.
• Primary Examiner(s): Poinvil; Frantzy
• Application Number:
  US10/778,993
• Publication Number:
  US 20040167848A1
• Time in Patent Office: 1,929 Days
• Field of Search: 705 10- 44
• US Class Current: 705/37
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• 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
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/12 Accounting

Abstract

A computer-implemented method and system for trading of debt securities (bonds), where multiple dealers participate and compete on a single platform (100). Dealers and investors have respective interfaces (250, 230) for communicating. In one aspect, dealers announce new debt security issues (400), the investors communicate an indication of interest (IOI) (500) in purchasing the new debt security issues, and the issues are allocated to the investors. In another aspect, issues from multiple dealers are made available to investors on a secondary trading market in a searchable format (1000). In response to price inquiries sent by the investors (1200), the dealers provide offers (1300) which are briefly held and released to the investor concurrently to allow the investor to consider all offers together. In another aspect, the dealers post bid and offer terms for actively traded issues (1700) that are updated in real-time to avoid the need for the inquiry procedure.

Claims

1. A computer-implemented method for providing an announcement of a security, and bid and/or offer terms thereof, comprising:

electrically determining the exchange of said announcement between at least one dealer and investors;

electrically transmitting said announcement of the security and bid and/or offer terms thereof to a computer of the investors listing the available issues from the at least one dealer so that each investor can access the security announcement via his or her respective investor computer interface, and providing the investors immediate access to a multi-dealer inventory of issues responsive to the announcement including a calendar on which issues are placed prior to the time they are priced, and the calendar indicating at least one of a lead manager, a status of the issue, price talk, the coupon, maturity, rating, benchmark, and bookrunner, where an available issue may be handled one dealer or a group of dealers,

the group of dealers led by one or more co-managers;

electrically receiving from the investors indications of interest in response to the announcement;

electrically enabling investors to submit indications of interest to only one or more selected dealers;

electrically enabling investors to determine whether additional dealers are informed that indications of interest were sent to other dealers;

electrically providing a notice to the investor providing terms associated with the indication of interest that must be accepted before the indication of interest is sent;

receiving an indication from an investor whether an indication of interest is to be re-confirmed or auto-accepted;

electrically providing a real-time status and history of an investor'"'"'s indication of interest,

the status and history indicating history notices, whether a price has been confirmed, an allocation has been verified, an allocation is available and should be verified, an indication of interest has been verified, an indication of interest should be reviewed and verified, or an indication of interest has been submitted;

electrically enabling the investors to view additional indications of interest that have been submitted;

electrically determining at least one of an allocation and a price for the security based upon the received indications of interest;

electrically transmitting to the investors that the indication of interest has been allocated;

displaying final pricing information to the investors; and

electrically providing a timer to indicate a time to complete a transaction, where the time can be different for different dealers.

2. The method of claim 1, wherein the investors are a plurality of individuals.

3. The method of claim 1, where in the investors are in a market.

4. The method of claim 1, further comprising:

providing an audit trail for tracking receipts of interest.

5. The method of claim 1, further comprising:

enabling the investors to enter customized searching criteria for searching the inventory via their respective interfaces.

6. The method of claim 1, further comprising:

preparing records of trade executions for the new debt security issues; and

exporting the records to at least one of a back office/accounting function, an archive, and a custodian.

7. The method of claim 1, wherein the announcement further comprises a calendar of new issues.

8. The method of claim 1, wherein the dealer further comprises a syndicate of banks acting together to underwrite the issue.

9. The method of claim 1, wherein at least one of the price and allocation for the security is determined at the pricing date.

10. The method of claim 1, wherein the indications of interest include at least one of quantity, level, type, settlement and special instructions.

11. The method of claim 1, further comprising:

receiving from investors modifications to the details of indications of interest.

12. The method of claim 1, wherein the announcement is for the issue of a new security.

13. The method of claim 1, further comprising:

making the announced security available for purchase after at least one of the allocation and price has been determined.

14. The method of claim 1, wherein the indication of interest is at least one of market, limit spread, minimum required yield, no minimum, minimum fill, and all or none.

15. The method of claim 1, further comprising:

determining the demand for the issue in response to the indications of interest received from the investors;

providing a status of the issue security;

making the announced security available for purchase after at least one of the allocation and price have been determined; and

filling orders in response to indications of interest from each of the plurality of investors.

16. The method of claim 1, further comprising:

enabling investors to post and/or review comments related to the price of a security.

17. A system for providing an announcement of a security, and bid and/or offer terms thereof, comprising:

a data center enabled to determine that said announcement is to be exchanged between the dealer and investors; and

a computer system having a server enabled to

electrically communicate said announcement to investors via an interface so that each investor can access the security announcement via his or her respective investor interface,

the announcement comprising a listing of at least one of the security name, security details, status and one or more lead managers prior to the pricing of the security; and

receive from at least one investor, via the interface, indications of interest in response to the announcement,

the indications of interest including at least one of quantity, level, type, settlement, special instructions, the respective dealer or dealers to receive the indication of interest, and an indication whether the indication of interest is to be re-confirmed or auto-accepted, provide a real-time status and history of an indication of interest, and determine, at a pricing date, at least one of an allocation and a price for the security based upon the received indications of interest.

18. A computer-implemented method for providing an announcement of a security, and bid and/or offer terms thereof, comprising:

electrically determining the exchange of the announcement between dealers and investors, the announcement comprising a calendar of new issues containing details of at least one new issue security;

electrically communicating the announcement of the security and bid and/or offer terms thereof to an interface of a computer of the investors so that each investor can access the security announcement via their respective investor interface;

electrically receiving from the investors indications of interest in response to the announcement,

the indications of interest including at least one of quantity, level, type, settlement, special instructions, the respective dealer or dealers to receive the indication of interest, and an indication whether the indication of interest is to be re-confirmed or auto-accepted;

electrically receiving an indication from an investor whether an indication of interest is to be re-confirmed or auto-accepted;

electrically providing a real-time status and history of an indication of interest the real-time status and history including at least an indication whether a price has been confirmed, an allocation has been verified, and indication of interest should be reviewed and verified, or an indication of interest has been submitted;

electrically determining, at a pricing date, at least one of an allocation and a price for the security based upon the received indications of interest, and transmitting to the investors that the indication of interest has been allocated;

displaying final pricing information to the investors; and

electrically providing a timer to indicate a time to complete a transaction, where the time can be different for different dealers.

19. The method of claim 18, further comprising:

placing new issue securities on the calendar prior to pricing.

20. The method of claim 19, wherein details of at least one new issue security include at least one of security name, size of issue, security details, status and one or more lead managers.

21. The method of claim 20, wherein the status is at least one of announced, priced, launched and settled.