Electronic trading confirmation system

• US 20030093362A1
• Filed: 09/17/2002
• Published: 05/15/2003
• Est. Priority Date: 11/13/2001
• Status: Active Grant

• Current Assignee: Intercontinental Exchange Holdings, Inc. (Intercontinental Exchange, Inc.)
• Original Assignee: Intercontinental Exchange, Inc.
• Inventors: Worley, Cynthia L., Rane, Sanjay, Tullis, Henry D. III, Hughes, Tracy, Tupper, Bruce, Xia, DongChun, Vice, Charles
• Granted Patent: US 8,005,743 B2
• Time in Patent Office: Days
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: H02J 3/008 involving trading of energy or energy transmission rights
• CPC Class Codes: Y04S 10/50 Systems or methods supporting the power network operation or management, involving a certain degree of interaction with the load-side end user applications
• CPC Class Codes: Y04S 50/10 Energy trading, including energy flowing from end-user application to grid

Abstract

A system and method of confirming trades of financial instruments such as OTC derivatives is disclosed. The system includes a data interface which accepts data relating to a trade from both the trader and counter party. The data includes different data fields of differing importance. The system includes a matching engine which compares the submitted data and assigns the trade a status depending on which of the data fields match. The system allows a user to filter trades on their status and display the details relating to that trade. The system also allows a user to display the data fields and change the data fields in order to change the status of the trades. The system thus allows a user to electronically confirm a trade and also identify unmatched trades and the information necessary to reconcile such unmatched trades.

Claims

1. A system of determining the status of trades between a trader and a counter party based on an electronic submission of a data file representing details in data fields of a trade by the trader and a second data file representing details in data fields of the trade by the counter party, the system comprising:

a data interface engine which reads the data files and data fields;

a matching engine coupled to the data interface engine which matches selected data fields in the data files and assigns a status to the trade based on whether the data fields submitted matches; and

a database coupled to the matching engine which stores the resulting trade data to confirm the trade if all of the key details in the two data files match.

2. The system of claim 1 further comprising a web based server which sends a webpage to display a graphical user interface on a connected computer to enable a user to activate the data interface engine and the matching engine.

3. The system of claim 2 wherein the webpage includes scripts to allow the submission of data files including data fields for a trade.

4. The system of claim 3 wherein the scripts include an XML interface for use with an application specific interface capable of running on the connected computer.

5. The system of claim 3 wherein the scripts include a https interface capable of receiving a secure data file from the connected computer.

6. The system of claim 1 wherein the selected data fields are further defined as key data fields and required data fields;

and wherein the matching engine compares the selected data fields with the same data fields submitted by the counter party.

7. The system of claim 6 wherein the selected data fields are further defined as informational data fields having data which is for informational purposes only and product master data fields which have a singular value stored in a product master in the database.

8. The system of claim 7 wherein the user may display all of the data fields of a specific trade and wherein each field has a symbol indicating whether it is a key data field, a required data field, informational field or a product master data field.

9. The system of claim 6 wherein the matching engine defines the status of the trade based on the matching of key and required data fields, wherein the status of the trade is further defined as:

matching indicating that all data fields match;

unmatched indicating that key data fields match but at least one other data field does not;

pending indicating that one or more key data fields do not match;

alleged indicating that the counter party alleges having made a trade; and

canceled indicating that the trade has been withdrawn.

10. The system of claim 2 wherein the results of the match are displayed to the connected computer to show which trades are matched.

11. The system of claim 10, wherein the webpage has script allowing a user to submit new values for unmatched data fields and submit the new values to the matching engine.

12. The system of claim 10 where the webpage has script to allow a user to display trades with information meeting a certain defined criteria.

13. The system of claim 12 wherein the matching engine allows a user to rename data fields.

14. A method of electronically confirming trading of financial products which include data fields which are agreed upon between a trader and a counter party, the method comprising:

submitting trader data including different data fields relating to the trade via an electronic interface;

submitting counter party data including different data fields relating to the trade via an electronic interface;

comparing the data fields submitted by the trader and the counter party to determine which fields match;

confirming the trade if certain data fields match.

15. The method of claim 14 further comprising:

entering data fields in a data record contained in a data file, wherein submitting the trader data and the counter party data is performed by sending the data file; and

translating the data fields in the data file to a standard data format for a specific trade type.

16. The method of claim 14 wherein submitting trader data and counter party data are accomplished via a web interface and wherein the data is converted via web script to a standard data format.

17. The method of claim 14 further comprising grouping the data fields submitted by the trader and the counter party into different categories of importance to confirming the trade.

18. The method of claim 17 further comprising assigning the trade a status according to the data fields which match in the different categories of importance, wherein the data fields include key fields and required fields.

19. The method of claim 18 wherein the status of the trade is further defined as:

matching indicating that all data fields match;

unmatched indicating that key data fields match but at least one other data field does not;

pending indicating that one or more key data fields do not match;

alleged indicating that a counter party has submitted the trade; and

canceled indicating that the trade has been withdrawn.

20. The method of claim 14 further comprising editing a data field entry which does not match between the trader and the counter party and recomparing the data fields to determine which fields.

21. The method of claim 19 further comprising displaying the trade and the data fields by the status of the trade and highlighting data fields which do not match between the trader and the counter party.

23. The method of claim 21 wherein the trader and counter party pay the owner of the matching engine a fee for each matched trade.

22. A method of electronically confirming trades of financial products between a party and a counter party having a master agreement governing the trades of the financial products, comprising:

amending the master agreement to allow electronic confirmation;

connecting both the trader and the counter party electronically to a matching engine;

submitting trader data including different data fields relating to a trade to the matching engine;

submitting counter party data including different data fields relating to the trade to the matching engine; and

confirming the trade by matching certain data fields.

24. A system for electronically confirming trading of financial products which include data fields which are agreed upon between a trader and a counter party, the method comprising:

a data interface for reading trader data including different data fields relating to the trade and counter party data including different data fields relating to the trade via an electronic interface;

a matching means for comparing the data fields submitted by the trader and the counter party to determine which fields match; and

a confirmation means for confirming the trade if certain data fields match.