System for facilitating trade processing and trade management

• US 7,765,133 B1
• Filed: 02/16/2000
• Issued: 07/27/2010
• Est. Priority Date: 02/16/2000
• Status: Expired due to Fees

• Current Assignee: Omgeo LLC (The Depository Trust & Clearing Corporation)
• Original Assignee: Omgeo LLC (The Depository Trust & Clearing Corporation)
• Inventors: Edelstein, P. Howard, Smith, Christopher G., Tierney, Peter J., Foster, Gary S., Walsh, Christopher J.
• Primary Examiner(s): Felten; Daniel S
• Application Number:
  US09/504,803
• Time in Patent Office: 3,814 Days
• Field of Search: 705/37, 705/35, 705/44, 705/42
• US Class Current: 705/35
• CPC Class Codes: G06Q 10/00 Administration; Management
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 20/105 involving programming of a portable memory device, e.g. IC cards, "electronic purses"
• CPC Class Codes: G06Q 20/108 Remote banking, e.g. home banking
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• CPC Class Codes: G06Q 30/04 Billing or invoicing
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• 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 system for facilitating the processing and settlement of a securities trade is provided. The system includes a computer which receives trade execution information indicative of an executed trade by a first trading party and trade allocation information indicative of an executed trade by a second trading party. The system also includes a database of trading party profiles accessible by the computer, the trading party profiles being indicative of acceptable trade parameters for each trading party. Executing on the computer is a matching program for comparing the trade execution information with the trade allocation information and for determining that a match exists if the trade execution information and the trade allocation information correlate within the acceptable trade parameters supplied in the trading party profiles for the first trading party and the second trading party.

Claims

1. A system for facilitating the processing and management of a securities trade comprising:

a computer;

trade execution information supplied by a first trading party and received by said computer, said trade execution information indicative of an executed trade by the first trading party and comprising party supplied data elements concerning conditions of the executed trade itself;

trade allocation information supplied by a second trading party and received by said computer, said trade allocation information indicative of an ordered trade by the second trading party and comprising party supplied data elements concerning conditions of the ordered trade itself;

a set of predefined acceptable trade details; and

software executing on said computer for comparing the party supplied data elements contained in said trade execution information with the party supplied data elements contained in said trade allocation information, and for determining that a match exists if the party supplied data elements contained in said trade execution information and the party supplied data elements contained in said trade allocation information correlate within said set of predefined acceptable trade details;

wherein if a match is not found to exist, software executing on said computer generates and transmits an exception notification to the first trading party and the second trading party informing them that an exception has been detected, and further comprising software executing on said computer for receiving an instruction for exception processing from at least one of the first trading party and the second trading party, and for processing the exception according to the instruction for exception processing;

wherein the instruction for exception processing comprises an instruction to force the match, and wherein the system continues processing the trade.

2. The system of claim 1 wherein said set of predefined acceptable trade parameters is dependent on the identities of the first trading party and the second trading party.

3. The system of claim 1 further comprising:

a database of trading party profiles accessible by said computer;

wherein said trade execution information includes a first trading party identification and said trade allocation information includes a second trading party identification;

wherein software executing on said computer retrieves from said database a first trading party profile based on the first trading party identification and a second trading party profile based on the second trading party identification; and

wherein said set of predefined acceptable trade parameters are extracted from the first trading party profile and the second trading profile.

4. The system of claim 3 wherein the first trading party profile is dependent on both the first trading party identification and the second trading party identification and wherein the second trading party profile is dependent on both the second trading party identification and the first trading party identification.

5. The system of claim 3 wherein the first trading party profile is dependent on the first trading party identification and independent of the second trading party identification and wherein the second trading party profile is dependent on the second trading party identification and independent of the first trading party identification.

6. The system of claim 3 further comprising software executing on said computer for allowing the first trading party to access, modify and confirm the first trading party profile and for allowing the second trading party to access, modify and confirm the second trading party profile.

7. The system of claim 1:

wherein the party supplied data elements contained in said trade execution information and the party supplied data elements contained in said trade allocation information include minimum pairing data;

further comprising software executing on said computer for comparing the party supplied data elements contained in said trade execution information with the party supplied data elements contained in said trade allocation information, said software determining that a pairing exists if the minimum pairing data of the party supplied data elements contained in said trade execution information corresponds to the minimum pairing data of the party supplied data elements contained in said trade allocation information; and

wherein said matching software compares trade execution information and trade allocation information only after a pairing has been found to exist.

8. The system of claim 7 wherein the minimum pairing data comprises an indicator of whether shares are being bought or sold, an indicator of a trade date, a security identification, and an indicator of the number of shares traded.

9. The system of claim 1 further comprising an affirmation generated by said computer if a match is determined to exist, the affirmation being transmitted to the first trading party and the second trading party confirming that a match has been detected by said matching software and containing all data necessary for settling the trade.

10. The system of claim 1 further comprising:

a plurality of enrichment databases having enrichment data stored thereon; and

software executing on said computer for enriching said trade execution information and said trade allocation information with enrichment data retrieved from said plurality of enrichment databases.

11. The system of claim 10 further comprising software executing on said computer for calculating a trade net amount if a match is determined to exist using the enriched trade execution information and the enriched trade allocation information.

12. The system of claim 10 further comprising software executing on said computer for allowing the first trading party and the second trading party to access, modify and confirm said enrichment databases.

13. The system of claim 10 wherein one of said plurality of enrichment databases comprises a commission fees database.

14. The system of claim 10 wherein one of said plurality of enrichment databases comprises a trade status database.

15. The system of claim 14 further comprising software executing on said computer for allowing the first trading party and the second trading party to access the trade status database in order to view the real-time status of the trade.

16. The system of claim 1 wherein the first trading party is a broker and wherein said trade execution information is extracted from an order execution notice received by said computer.

17. The system of claim 16 wherein the second trading party is an investment manager and wherein said trade allocation information is extracted from an allocation received by said computer.

18. The system of claim 17 further comprising software executing on said computer for extracting said trade execution information from the order execution notice and said trade allocation information from the allocation and for translating said trade execution information and said trade allocation information into a format usable by said computer.

30. The system of claim 1 wherein said set of predefined acceptable trade parameters specify at least one variance range, which variance range is greater than zero, and wherein a match is determined to exist for a particular party supplied data element if the value of the particular party supplied data element contained in said trade execution information correlates with the value of the particular party supplied data element contained in said trade allocation information within the at least one variance range.

19. A system for facilitating the processing and management of a securities trade comprising:

a computer;

trade execution information supplied by a first trading party and received by said computer, said trade execution information indicative of an executed trade by the first trading party and comprising party supplied data elements concerning conditions of the executed trade itself, including a first trading party identification and minimum pairing data;

trade allocation information supplied by a second trading party and received by said computer, said trade allocation information indicative of an ordered trade by the second trading party and comprising party supplied data elements concerning conditions of the ordered trade itself, including a second trading party identification and minimum pairing data;

a database containing a plurality of trading party profiles accessible by said computer and retrievable by trading party identification, the trading party profiles indicative of acceptable trade details;

a plurality of enrichment databases having enrichment data stored thereon;

software executing on said computer for enriching said trade execution information and said trade allocation information with data retrieved from said plurality of enrichment databases;

software executing on said computer for allowing the first trading party to access, modify and confirm the first trading party profile and said enrichment databases and for allowing the second trading party to access, modify and confirm the second trading party profile and said enrichment databases;

software executing on said computer for comparing the party supplied data elements contained in said trade execution information with the party supplied data elements contained in said trade allocation information, and for determining that a pairing exists if the minimum pairing data of the party supplied data elements contained in said trade execution information corresponds to the minimum pairing data of the party supplied data elements contained in said trade allocation information;

software executing on said computer for comparing the party supplied data elements contained in said trade execution information with the party supplied data elements contained in said trade allocation information if a pairing has been found to exist, and for determining that a match exists if the party supplied data elements contained in said trade execution information and the party supplied data elements contained in said trade allocation information correlate within the acceptable trade details supplied in the trading party profile for the first trading party and the trading party profile for the second trading party;

software executing on said computer for calculating a trade net amount if a match is determined to exist using the enriched trade execution information and the enriched trade allocation information; and

an affirmation generated by said computer if a match is determined to exist, the affirmation being transmitted to the first trading party and the second trading party confirming that a match has been detected and containing all data necessary for settling the trade;

wherein if a match is not found to exist, software executing on said computer generates and transmits an exception notification to the first trading party and the second trading party informing them that an exception has been detected, and further comprising software executing on said computer for receiving an instruction for exception processing from at least one of the first trading party and the second trading party, and for processing the exception according to the instruction for exception processing;

wherein the instruction for exception processing comprises an instruction to force the match, and the system continues processing the trade.

20. The system of claim 19 wherein one of said plurality of enrichment databases comprises a trade status database.

21. The system of claim 20 further comprising software executing on said computer for allowing the first trading party and the second trading party to access the trade status database in order to view the real-time status of the trade.

22. The system of claim 19 wherein the trading party profile for each of the first trading party and the second trading party is dependent on the identity of the trading party for which the profile is received.

23. The system of claim 19 wherein the first trading party profile is dependent on both the first trading party identification and the second trading party identification and wherein the second trading party profile is dependent on both the second trading party identification and the first trading party identification.

24. The system of claim 19 wherein the first trading party profile is dependent on the first trading party identification and independent of the second trading party identification and wherein the second trading party profile is dependent on the second trading party identification and independent of the first trading party identification.

25. The system of claim 19 wherein the minimum pairing data comprises an indicator of whether shares are being bought or sold, an indicator of a trade date, a security identification, and an indicator of the number of shares traded.

26. The system of claim 19 wherein each of the plurality of trading party profiles include an indication of a desired affirmation format and protocol, and further comprising software executing on said computer for translating the affirmation into the desired affirmation format and protocol specified in the first trading party profile before transmitting the affirmation to the first trading party and into the desired affirmation format and protocol specified in the second trading party profile before transmitting the affirmation to the second trading party.

27. The system of claim 19 wherein one of said plurality of enrichment databases comprises a commission fees database.

28. The system of claim 19 wherein the first trading party is a broker and wherein said trade execution information is extracted from an order execution notice received by said computer, and wherein the second trading party is an investment manager and wherein said trade allocation information is extracted from an allocation received by said computer.

29. The system of claim 28 further comprising software executing on said computer for extracting said trade execution information from the order execution notice and said trade allocation information from the allocation, and for translating said trade execution information and said trade allocation information into a format usable by said computer.

31. The system of claim 19 wherein said set of predefined acceptable trade parameters specify at least one variance range, which variance range is greater than zero, and wherein a match is determined to exist for a particular party supplied data element if the value of the particular party supplied data element contained in said trade execution information correlates with the value of the particular party supplied data element contained in said trade allocation information within the at least one variance range.