Billing workflow system for crediting charges to entities creating derivatives exposure

• US 7,814,003 B2
• Filed: 02/06/2004
• Issued: 10/12/2010
• Est. Priority Date: 12/15/2003
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase & Co
• Inventors: Pham, Tuan, Toghill, Julian Mark, Miller, Harold
• Primary Examiner(s): Dixon; Thomas
• Assistant Examiner(s): Vizvary; Gerald C
• Application Number:
  US10/774,357
• Publication Number:
  US 20050131804A1
• Time in Patent Office: 2,440 Days
• Field of Search: None
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/102 Bill distribution or payments
• CPC Class Codes: G06Q 30/04 Billing or invoicing
• 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

Abstract

An automated billing workflow system receives credit valuation adjustment (CVA) amounts associated with derivatives trades. The automated billing workflow system interacts with an Accounting System in order to make appropriate Profit and Loss (P&L) entries for the CVA amounts. The CVA amounts are billed to the business units which actually created the risk. The invention employs a plurality of Workflow Queues. As an item makes it way through the billing workflow, it may be slotted in one or more of these queues where further action will take place.

Claims

1. A computer system for allocating charges related to derivatives trading to a business unit in a business organization, comprising:

a computer memory configured to receive reserve amount information based on an exposure associated with a derivative trade; and

a computer processor operatively coupled to the computer memory, the computer processor configured to review the derivative trade and the reserve amount information and allocate a risk-related charge based on the reserve amount information to a business unit involved in the derivative trade for processing by at least one of a plurality of workflow queues, wherein the computer processor includes an accounting component for posting Profit and Loss (P&

L) amounts based on the reserve amount information.

2. The system of claim 1, wherein the reserve amount information includes a reserve amount to set aside.

3. The system of claim 2, wherein the reserve amount is based on an estimation of risk of counter-party default.

4. The system of claim 1, wherein the reserve amount is held in a special queue for further review, if the reserve amount exceeds a predetermined amount.

5. The system of claim 1, wherein at least one of the plurality of queues is viewable by a user via an interface.

6. The system of claim 5, wherein at least one of the viewable queues is modifiable.

7. The system of claim 1, wherein a reserve amount found to be invalid is reversed.

8. The system of claim 1, wherein the computer processor is configured to generate an invoice associated with the risk-related charge for the business unit involved in the derivative trade.

9. A method for allocating charges related to derivatives trading to a business unit in a business organization, comprising:

receiving, by a computer processor, reserve amount information based on an exposure associated with a derivative trade;

identifying, by the computer processor, a business unit creating the exposure associated with the derivative trade;

reviewing, by the computer processor, the derivative trade and the reserve amount information;

allocating, by the computer processor, a risk-related charge based on the reserve amount information to the business unit creating the exposure for processing by at least one of a plurality of workflow queues; and

posting, by the computer processor, a Profit and Loss (P&

L) amount for the derivative trade.

10. The method of claim 9, wherein the reserve amount information includes a reserve amount to set aside.

11. The method of claim 10, wherein the reserve amount is based on an estimation of risk of counter-party default.

12. The method of claim 10, wherein the reserve amount is held in a special queue for further review, if the reserve amount exceeds a predetermined amount.

13. The method of claim 9, wherein at least one of the plurality of queues is viewable by a user via an interface.

14. The method of claim 13, wherein at least one of the viewable queues is modifiable.

15. The method of claim 10, further including the step of reversing the reserve amount, if the reserve amount is invalid.

16. The method of claim 9, further including the step of generating an invoice for the business unit creating the exposure.

17. A program storage device readable by a machine, tangibly embodying a program of instructions executable on the machine to perform method steps for allocating charges to a business unit within a business organization, the method steps comprising:

receiving reserve amount information based on an exposure associated with a derivative trade;

identifying a business unit creating the exposure associated with the derivative trade;

reviewing the derivative trade and the reserve amount information;

allocating a risk-related charge based on the reserve amount information to a business unit involved in the derivative trade for processing by at least one of a plurality of workflow queues; and

posting a Profit and Loss (P&

L) amount for the derivative trade.