Method and apparatus for agreement netting

• US 7,778,914 B1
• Filed: 01/14/2002
• Issued: 08/17/2010
• Est. Priority Date: 01/14/2002
• Status: Active Grant

• Current Assignee: Goldman Sachs & Co. LLC (Goldman Sachs Group Incorporated)
• Original Assignee: Goldman Sachs & Company (Goldman Sachs Group Incorporated)
• Inventors: Wilce, Scott, Harris, Patrick E.
• Primary Examiner(s): Kazimi, Hani
• Assistant Examiner(s): Shrestha, Bijendra K
• Application Number:
  US10/045,964
• Time in Patent Office: 3,137 Days
• Field of Search: 705/37, 705/39
• 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 40/02 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

Abstract

A system, method, apparatus, computer program code and means for performing a netting analysis of an agreement is provided. Pursuant to some embodiments, the netting analysis is performed by receiving agreement information, the agreement information identifying a party and a counterparty. The agreement information is compared with a netting rule. A netting determination for the agreement is generated based at least in part on a result of the comparing.

Claims

1. A processor-implemented method for performing a netting analysis of a netting agreement, the method comprising:

receiving netting agreement information for said netting agreement, said netting agreement information identifying a party, a counterparty, and facts governing said netting agreement, the facts of said netting agreement including;

a form of agreement, a governing law, a country of organization, a state or province of organization, a legal structure, a parent company country of organization, and a parent company legal structure;

receiving at least one issue associated with said agreement, the at least one issue based on an existence or non-existence of particular facts in the facts governing said netting agreement;

analyzing said netting agreement by comparing, via a processor, said facts governing said netting agreement information with a netting rule that applies to the netting agreement for said at least one issue, said netting rule is established by training a netting decision engine; and

generating a netting determination indicative of an ability of the party and counterparty to net under said netting agreement based, at least in part, on a result of said analyzing, wherein said netting determination includes a qualification of said netting agreement and a level of confidence indicative of enforceability, wherein the level of confidence is retrieved from a rule database based on an outcome of the rule application.

2. The method of claim 1, further comprising:

forwarding said netting determination to an agreement database.

3. The method of claim 1, further comprising:

forwarding said netting determination to a credit database; and

updating a net credit amount associated with said counterparty and said party in said credit database.

4. The method of claim 1, further comprising:

forwarding said netting determination to a Financial Accounting Standards Board (FASB) database; and

updating a netting amount associated with said counterparty and said party in said FASB database.

5. A processor-implemented method for performing a netting analysis of a netting agreement, the method comprising:

identifying fact data associated with said netting agreement, said fact data including data identifying a contracting entity and data identifying a counterparty;

identifying a default set of issues associated said fact data associated with said netting agreement, said default set of issues based on an existence or non-existence of particular facts governing said netting agreement;

identifying facts in said fact data associated with said netting agreement and associated with a first issue from said default set of issues, said facts including;

a form of agreement, a governing law, a country of organization, a state or province of organization, a legal structure, a parent company country of organization, and a parent company legal structure;

analyzing said netting agreement by applying, via a processor, a netting rule to said fact data for said first issue, said netting rule selected based at least in part on said first issue, said netting rule is established by training a netting decision engine; and

generating a netting determination based at least in part on said analyzing application and indicative of an ability of the party and counterparty to net under said netting agreement, wherein said netting determination includes a qualification of said netting agreement and a level of confidence indicative of enforceability, wherein the level of confidence is retrieved from a rule database based on an outcome of the rule application.

6. The method of claim 5, further comprising:

identifying fact data associated with a second issue;

applying a second netting rule to said fact data for said second issue, said second netting rule selected based at least in part on said second issue; and

generating a netting determination based at least in part on said application of said netting rule and said second netting rule.

7. The method of claim 6, further comprising:

identifying fact data associated with a third issue;

establishing a new netting rule based at least in part on said fact data and said third issue;

applying said new netting rule to said fact data for said third issue;

generating a netting determination based at least in part on said application of said netting rule and said new netting rule.

8. The method of claim 5, further comprising:

updating a credit database based on the generated netting determination.

9. The method of claim 5, further comprising:

updating a FASB database based on the generated netting determination.

10. An apparatus for performing netting analysis of counterparty netting agreements, comprising:

a processor;

a communications device in communication with said processor, receiving counterparty agreement data; and

a memory unit in communication with said processor and storing a program, wherein the processor is operative with said program to;

identify, from said counterparty netting agreement data, a party, a counterparty to said counterparty netting agreement, and facts governing said counterparty netting agreement, the facts of said counterparty netting agreement including;

a form of agreement, a governing law, a country of organization, a state or province of organization, a legal structure, and a parent company country of organization;

receive at least one issue associated with said agreement, the at least one issue based on an existence or non-existence of particular facts in the facts governing said netting agreement;

analyze said agreement by comparing, said facts governing said netting counterparty netting agreement data with a netting rule that applies to said counterparty netting agreement for said at least one issue, said netting rule is established by training a netting decision engine; and

generate a netting determination for said counterparty netting agreement based at least in part on a result of said analyzing and indicative of an ability of the party and counterparty to net under said counterparty netting agreement, wherein said netting determination includes a qualification of said netting agreement and a level of confidence indicative of enforceability, wherein the level of confidence is retrieved from a rule database based on an outcome of the rule application.

11. A processor-readable medium storing a plurality of processing instructions, for performing a netting analysis of a netting agreement, comprising issuable instructions by a processor to:

identify fact data associated with said netting agreement, said fact data including data identifying a contracting entity and data identifying a counterparty;

identify a default set of issues associated with said netting agreement, said default set of issues based on an existence or non-existence of particular facts governing said netting agreement;

identify facts in said fact data associated with said netting agreement and associated with a first issue from said default set of issues, said facts including;

a form of agreement, a governing law, a country of organization, a state or province of organization, a legal structure, a parent company country of organization, and a parent company legal structure;

analyze said netting agreement by applying a netting rule to said fact data for said first issue, said netting rule selected based at least in part on said first issue, said netting rule is established by training a netting decision engine; and

generate a netting determination based at least in part on said analyzing and indicative of an ability of the party and counterparty to net under said netting agreement, wherein said netting determination includes a qualification of said netting agreement and a level of confidence indicative of enforceability, wherein the level of confidence is retrieved from a rule database based on an outcome of the rule application.