Systems and methods relating to the formulation of a multi-party contract

• US 7,822,676 B2
• Filed: 12/12/2006
• Issued: 10/26/2010
• Est. Priority Date: 05/29/1992
• Status: Expired due to Fees

• Current Assignee: Alice Corporation Pty Limited
• Original Assignee: Alice Corporation Pty Limited
• Inventors: Shepherd, Ian Kenneth
• Primary Examiner(s): Havan; Thu Thao
• Application Number:
  US11/637,002
• Publication Number:
  US 20070106601A1
• Time in Patent Office: 1,414 Days
• Field of Search: 705 37- 38
• US Class Current: 705/37
• CPC Class Codes: G06Q 10/06 Resources, workflows, human or project management; Enterprise or organisation planning; Enterprise or organisation modelling
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 30/08 Auctions
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• 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 40/06 Asset management; Financial planning or analysis
• CPC Class Codes: G06Q 40/08 Insurance
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

Methods and apparatus which deal with the management of risk relating to specified, yet unknown, future events are disclosed.

‘Sponsor’ stakeholders specify a particular product relating to an event or phenomenon for which there is a range of possible future outcomes.

‘Ordering’ stakeholders then offer contracts relating to the predetermined phenomenon and corresponding range of outcomes. The offered contracts specify an entitlement or (pay-off) at the future time of maturity for each outcome, and a consideration (or premium) payable, in exchange, to a ‘counter-party’ stakeholder.

Independently of the offered contracts, the ‘counter-party’ stakeholders input data as to their view of the likelihood of occurrence of each outcome in the predetermined range into the future, or specifically at the predetermined date of maturity.

Each offered contract is priced by the processing units by calculating counter-party premiums from the registered data, and a match attempted by a comparison of the offered premium with the calculated premiums.

Matched contracts can be further traded until maturity, and at-maturity processing handles the exchange of entitlement as between the matched parties to the contract.

Claims

1. A data processing system to enable the formulation of a multi-party risk management contract, the system comprising:

a data storage unit having stored therein information about at least one product, each product having a set of possible outcomes at a future time of maturity; and

a computer, coupled to said data storage unit that is configured to;

(a) receive from a first party, contract data relating to a first product, the contract data specifying an entitlement for each said possible outcome due to the first party at maturity and a consideration due to a second party;

(b) receive from at least one of said second parties, independently of said first party, registering data as to a likelihood of each outcome in said set of possible outcomes relating said first product;

(c) price and match a contract from said contract data and said registering data, the pricing including calculating a counter consideration from said registering data and said contract data, and the matching including comparing said consideration with each said counter consideration to match an offered contract with at least one of said second parties; and

(d) confirm match of said offered contract to said first party and said at least one of said second parties.

2. The data processing system of claim 1, wherein said entitlement is the same for each said possible outcome due to the first party.

3. A computer-implemented method to enable the formulation of a multi-party risk management contract, the method comprising:

(a) electronically maintaining information about at least one product, each product having a set of possible outcomes at a future time of maturity;

(b) electronically receiving from a first party, contract data relating to a first product, the contract data specifying an entitlement for each said possible outcome due to the first party at maturity and a consideration due to a second party;

(c) electronically receiving from at least one of said second parties, independently of said first party, registering data as to a likelihood of each outcome in said set of possible outcomes relating said first product;

(d) electronically pricing and matching a contract from said contract data and said registering data, the pricing including calculating a counter consideration from said registering data and said contract data, and the matching including comparing said consideration with each said counter consideration to match an offered contract with at least one of said second parties; and

(e) electronically confirming match of said offered contract to said first party and said at least one of said second parties.

4. The method of claim 3, further comprising specifying the same entitlement for each said possible outcome due to the first party.

5. A data processing system to enable the formulation of a multi-party contract, the system comprising:

a data storage unit having stored therein, information about at least one product, each product having a time of maturity; and

a computer, coupled to said data storage unit that is configured to;

(a) receive from a first party contract data relating to a first product, the contract data specifying a deposit/loan or exchange entitlement due to the first party, and a limit on a consideration due to the second party;

(b) receive from at least one of said second parties, independently of said first party, counter-consideration registering data relating to said first product;

(c) match a contract from said contract data and said registering data, by comparing said limit on a consideration with each said counter-consideration to match an offered contract with at least one of said second parties; and

(d) confirm match of said offered contract to said first party and said at least one of said second parties.

6. The data processing system of claim 5, wherein said time of maturity is immediately upon match of the contract.

7. The data processing system of claim 5, wherein said time of maturity is after match of the contract.

8. A computer-implemented method to enable the formulation of a multi-party contract, the method comprising:

(a) electronically maintaining information about at least one product, each product having a time of maturity;

(b) electronically receiving from a first party contract data relating to a first product, the contract data specifying a deposit/loan or exchange entitlement due to the first party, and a limit on a consideration due to the second party;

(c) electronically receiving from at least one of said second parties, independently of said first party, counter-consideration registering data relating to said first product;

(d) electronically matching a contract from said contract data and said registering data, by comparing said consideration with each said counter-consideration to match an offered contract with at least one of said second parties; and

(e) electronically confirming match of said offered contract to said first party and said at least one of said second parties.

9. The method of claim 8, wherein said time of maturity is immediately upon matching of said contract.

10. The method of claim 8, wherein said time of maturity is after matching of said contract.

11. A data processing system to enable the formulation of a multi-party contract, the system comprising:

a data storage unit having stored therein information about at least one product, each product having an immediate time of maturity; and

a computer, coupled to said data storage unit that is configured to;

(a) receive from a first party contract data relating to a first product, the contract data specifying an entitlement due to the first party and a consideration due to a second party, both the consideration and entitlement being due on match or a contract;

(b) receive from at least one of said second parties, independently of said first party, counter-consideration registering data relating to said first product;

(c) match a contract from said contract data and said registering data, by comparing said consideration with each said counter-consideration to match an offered contract with at least one of said second parties; and

(d) confirm match of said offered contract to said first party and said at least one of said second parties.

12. A computer-implemented method to enable the formulation of a multi-party contract, the system comprising:

(a) electronically maintaining information about at least one product, each product having an immediate time of maturity;

(b) electronically receiving from a first party contract data relating to a first product, the contract data specifying an entitlement due to the first party and a consideration due to a second party, both the consideration and entitlement being due on match or a contract;

(c) electronically receiving from at least one of said second parties, independently of said first party, counter-consideration registering data relating to said first product;

(d) electronically matching a contract from said contract data and said registering data, by comparing said consideration with each said counter-consideration to match an offered contract with at least one of said second parties; and

(e) electronically confirming match of said offered contract to said first party and said at least one of said second parties.