Method and system for effecting straight-through-processing of trades of various financial instruments

• US 7,769,678 B2
• Filed: 04/15/2008
• Issued: 08/03/2010
• Est. Priority Date: 03/25/2003
• Status: Active Grant

• Current Assignee: Tradeweb Markets LLC (Tradeweb Markets, Inc.)
• Original Assignee: Tradeweb Markets LLC (Tradeweb Markets, Inc.)
• Inventors: Toffey, James Worden
• Primary Examiner(s): Havan; Thu Thao
• Application Number:
  US12/103,267
• Publication Number:
  US 20080255999A1
• Time in Patent Office: 840 Days
• Field of Search: 705 37- 38
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• 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 40/12 Accounting
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

A Straight-Through-Processing (STP) trading platform provides a fully electronic and seamless solution to all substantially aspects of the trading cycle for fixed income instruments and other financial instruments. In an exemplary embodiment, all participants to a trade transaction have access to computer software that facilitates trade order management, trade order generation, trade execution (including electronic axes), trade allocation, allocation acknowledgement, trade confirmation, and finally acquisition of settlement instructions. In said exemplary embodiment, the STP trading platform includes computer software modules including at least an account management module and an electronic trading module to handle the various stages of executing a trade, confirming the trade, and facilitating settlement of the trade.

Claims

1. A computer implemented method of effecting straight-through-processing of trades executed between one or more customers having one or more customer computer systems and one or more dealers having one or more dealer computer systems, the method comprising:

generating a trade order;

executing a block trade between the one or more customers and the one or more dealers based on the trade order wherein the trade order includes a pre-allocation of customer accounts;

storing one or more account information records associated with one or more settlement instruction sets in an account database;

storing a block trade record including details of the block trade executed by the one or more customers and the one or more dealers;

generating an allocated trade record associated with the block trade record for each of the account allocations received from the at least one customer computer system;

receiving an indication from the at least one dealer computer system that the allocated trade records are confirmed;

enriching the allocated trade records by incorporating one of the settlement instruction sets into each of the allocated trade records.

2. The method of claim 1 further comprising:

transmitting each of the enriched allocated trade records to an appropriate clearing institution.

3. The method of claim 1 further comprising:

transmitting each of the enriched allocated trade records to the one or more customers or the one or more dealers.

4. The method of claim 1, wherein the block trade records and allocated trade records are accessible by the one or more customer computers systems and one or more dealer computer systems such that the customer and dealer can view summary reports.

5. The method of claim 1, wherein the method is performed in a client-server environment.

6. The method of claim 1 further comprising:

generating trade inquiries and transmitting the trade inquiries to the one or more dealers.

7. The method of claim 6 further comprising:

generating firm prices in response to the trade inquiries and transmitting firm prices to the one or more customers.

8. The method of claim 1, further comprising:

receiving customer-initiated trade inquiries including pre-allocation of sub-accounts directed to the one or more dealers;

transmitting the customer-initiated trade inquiries to the dealer computer system of the one or more dealers;

receiving a trade price from at least one of the dealer computer systems;

transmitting the trade price to the customer computer system;

receiving from the customer computer system an indication that the trade price is accepted; and

executing a block trade at the accepted trade price.

9. The method of claim 8, wherein the indication is a click of a graphical button.

10. The method of claim 1, further comprising:

receiving dealer-initiated trade inquiries, including at least the type of financial instruments to be traded, the price, and settlement details, directed to one or more customers;

transmitting the dealer-initiated trade inquiries to the customer computer system of the one or more customers;

receiving from at least one of the customer computer systems an indication that the trade price is accepted; and

executing a block trade at the accepted trade price.

11. The method of claim 1, further comprising:

generating an electronic trade confirmation for each of the allocated trade records.

12. The method of claim 11, wherein the electronic trade confirmation includes at least trade details associated with the allocated trade record and a settlement instruction set.

13. The method of claim 11, wherein the electronic trade confirmation meets applicable government regulations.

14. The method of claim 11, wherein the electronic trade confirmation is configured to meet Rule 10b-10 of the Securities and Exchange Commission.

15. The method of claim 10, wherein the trade is executed via telephone.

16. The method of claim 10, wherein the trade is executed via an alternate trading system.

17. A computer-implemented method of effecting straight through processing comprising the steps of:

storing one or more account information records associated with one or more settlement instruction sets in an account database;

storing a block trade record including details of the block trade executed by a customer and a dealer;

generating an allocated trade record associated with the block trade record for each of the account allocations received from the customer;

enriching the allocated trade records by incorporating one of the settlement instruction sets into each of the allocated trade records.

18. The method of claim 17 further comprising:

transmitting each of the enriched allocated trade records to an appropriate clearing institution.