Systems and methods for facilitating settlement of cross-border securities transactions

• US 20040083159A1
• Filed: 06/13/2003
• Published: 04/29/2004
• Est. Priority Date: 07/21/1999
• Status: Abandoned Application

• Current Assignee: Crosby C. Steven, Edward R. Merchant
• Original Assignee: Crosby C. Steven, Edward R. Merchant
• Inventors: Merchant, Edward R., Crosby, C. Steven
• Application Number:
  US10/461,929
• Publication Number:
  US 20040083159A1
• Time in Patent Office: Days
• 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 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange

Abstract

Systems and methods for facilitating settlement of a securities transaction. A communications mechanism is adapted to accept incoming electronic messages related to the securities transaction. A processing mechanism, coupled to the communications mechanism, determines compatibility between any two or more incoming electronic messages. The processing mechanism transmits an indication message over the communications mechanism that specifies at least one of: (i) compatibility between any two or more incoming electronic messages; and (ii) incompatibility between any two or more incoming electronic messages.

Claims

1. A system for facilitating settlement of a securities transaction comprising:

(a) a communications mechanism adapted to receive incoming electronic messages setting forth one or more parameter values related to a securities transaction;

(b) a processing mechanism, coupled to the communications mechanism, and adapted to determine matches between one or more parameter values of any two or more incoming electronic messages;

wherein the processing mechanism is further adapted to transmit an indication message over the communications mechanism, the indication message specifying at least one of;

(i) the existence of matches between one or more parameter values of any two or more incoming electronic messages; and

(ii) the non-existence of matches between one or more parameter values of any two or more incoming electronic messages.

2. The system of claim 1 wherein one or more respective parameter values are associated with corresponding tolerances setting forth a maximum acceptable deviation for the respective parameter value, and the processing mechanism is further adapted to identify matches between parameter values within the maximum acceptable deviation.

3. The system of claim 1 wherein the communications mechanism is further adapted to accept incoming electronic messages related to a first securities transaction and incoming electronic messages related to a second securities transaction;

and

wherein the processing mechanism includes a discrimination mechanism adapted to distinguish incoming electronic messages related to the first securities transaction from incoming electronic messages related to the second securities transaction;

the processing mechanism adapted to determine compatibility between two or more incoming electronic messages related to the first securities transaction, and the processing mechanism also adapted to determine compatibility between two or more incoming electronic messages related to the second securities transaction.

4. The system of claim 1 wherein the incoming electronic messages include parameter values specifying at least one of a settlement location or venue;

a source allocation for the securities transaction; and

an amount of net proceeds for the securities transaction.

5. The system of claim 1 wherein the incoming electronic messages include parameter values specifying at least one of:

(a) a first proposed settlement location,

(b) a first proposed source allocation, and

(c) a first proposed amount of net proceeds,

and parameter values specifying at least one of;

(d) a second proposed settlement location,

(e) a second proposed source allocation, and

(f) a second proposed amount of net proceeds,

wherein the processing mechanism determines compatibility by identifying any matches between the first and second proposed settlement locations, the first and second proposed source allocations, and the first and second proposed amounts of net proceeds.

6. A system for facilitating settlement of a cross-border securities transaction between a first party and a second party, the first party being a seller or a seller'"'"'s representative and the second party being a buyer or a buyer'"'"'s representative, the transaction being defined by a plurality of parameters, the system comprising:

an input mechanism adapted for receiving a message from the seller or the seller'"'"'s representative and a message from the buyer or the buyer'"'"'s representative, said messages each setting forth at least one value for at least one parameter relating to the transaction;

a processing mechanism comprising a data storage for parameter values and a processor for comparing parameter values for each of a plurality of parameters to identify at least one of compatible and incompatible parameter values; and

a communications mechanism coupled to the processing system for providing an output message indicative of at least one of;

(i) identification of compatible parameter values; and

(ii) identification of incompatible parameter values.

7. The system of claim 6, wherein a parameter comprises a value and a tolerance for the value.

8. The system of claim 7, wherein the processor determines whether a parameter received from the first party is within the tolerance for the value received from the second party.

9. The system of claim 6, wherein a parameter has a default value.

10. The system of claim 6, wherein a parameter has a default tolerance.

11. The system of claim 6, wherein a parameter identifies the seller or the seller'"'"'s representative and the buyer or the buyer'"'"'s representative.

12. The system of claim 6, wherein the processor assigns a unique identifier to a particular transaction.

13. The system of claim 6, wherein a parameter identifies a custodian for the seller'"'"'s security.

14. The system of claim 13, wherein a parameter further identifies a custodian for receipt of the buyer'"'"'s security.

15. The system of claim 13, wherein the processing mechanism notifies the custodian for the seller'"'"'s security and the custodian for receipt of the buyer'"'"'s security of a consummated transaction.

16. A system for facilitating settlement of a cross-border securities transaction between a seller'"'"'s representative and a buyer'"'"'s representative, the transaction being defined by a plurality of parameters, the security being held by a custodian, the system comprising:

a communications mechanism for receiving messages from the seller'"'"'s representative and the buyer'"'"'s representative, said messages comprising values for the parameters relating to the transaction;

a processing system comprising data storage for parameter values and notifying the seller'"'"'s representative and the buyer'"'"'s representative of the parameters for a consummated transaction; and

an indication mechanism for providing an indication to the communications mechanism which is indicative of one or more parameters for the consummated

17. A method for facilitating settlement of a securities transaction including the steps of:

(a) a communications mechanism receiving incoming electronic messages setting forth one or more parameter values related to a securities transaction;

(b) a processing mechanism for storing said, values and for parameter determining matches between one or more parameter values of any two or more incoming electronic messages;

(c) the processing mechanism transmitting an indication message over the communications mechanism, the indication message specifying at least one of;

(i) the existence of matches between one or more parameter values of any two or more incoming electronic messages; and

(ii) the non-existence of matches between one or more parameter values of any two or more incoming electronic messages.

18. The method of claim 17 further including the steps of:

(a) the communications mechanism accepting incoming electronic messages related to a first securities transaction and incoming electronic messages related to a second securities transaction;

(b) the processing mechanism distinguishing incoming electronic messages related to the first securities transaction from incoming electronic messages related to the second securities transaction; and

(c) the processing mechanism determining compatibility between two or more incoming electronic messages related to the first securities transaction.

19. The method of claim 18 further including the step of the processing mechanism determining compatibility between two or more incoming electronic messages related to the second securities transaction.

20. The method of claim 17 further including the steps of:

(a) the communications mechanism accepting incoming electronic messages related to a first securities transaction and specifying at least one of;

(a) a first proposed settlement location,

(b) a first proposed source allocation, and

(c) a first proposed amount of net proceeds,

(b) the communications mechanism accepting incoming electronic messages related to the first securities transaction and specifying at least one of;

(d) a second proposed settlement location,

(e) a second proposed source allocation, and

(f) a second proposed amount of net proceeds,

(c) the processing mechanism determining compatibility by identifying any matches between the first and second proposed settlement locations, the first and second proposed source allocations, and the first and second proposed amounts of net proceeds.

21. A post-trade, pre-settlement system for facilitating a securities transaction and comprising:

a. a computer processing mechanism;

b. an interfacing mechanism adapted for interfacing the computer processing mechanism with at least two of the following entities;

a seller of a securities instrument, a buyer of the securities instrument, and a holder of the securities instrument;

wherein, in response to the issuance of a notification of execution (NOE) message from the interfacing mechanism, the computer provides multilateral data communications between the at least two entities.

22. The post-trade, pre-settlement system of claim 21 wherein the multilateral data communications includes data specifying at least one of a settlement location or venue;

a source allocation for the securities transaction; and

an amount of net proceeds for the securities transaction.

23. The post-trade, pre-settlement system of claim 21 wherein, for a first securities transaction, data specifying at least one of:

(a) a first proposed settlement location,

(b) a first proposed source allocation, and

(c) a first proposed amount of net proceeds,

are entered into the interfacing mechanism, and, for the first securities transaction, data specifying at least one of;

(d) a second proposed settlement location,

(e) a second proposed source allocation, and

(f) a second proposed amount of net proceeds,

are entered into the interfacing mechanism;

the computer processing mechanism further including a matching mechanism for identifying any matches between the first and second proposed settlement locations, the first and second proposed source allocations, and the first and second proposed amounts of net proceeds.

24. The post-trade, pre-settlement system of claim 21 wherein the computer further includes a confirmation mechanism for sending a confirmation message to the interfacing mechanism, the confirmation message identifying matches, if any, between the first and second proposed settlement locations, the first and second proposed source allocations, and the first and second proposed amounts of net proceeds.

25. The post-trade, pre-settlement system of claim 24 wherein the interfacing mechanism includes at least a first interface situated within a first region defined with reference to geographic, economic, and/or political boundaries, and a second interface not situated within the first region, so as to facilitate a cross-border securities transaction.

26. The post-trade, pre-settlement system of claim 24 wherein, for a first securities transaction, a first data set specifying at least one of:

(a) a first proposed settlement location,

(b) a first proposed source allocation, and

(c) a first proposed amount of net proceeds,

are entered into the interfacing mechanism, and, for the first securities transaction, a second data set specifying at least one of;

(d) a second proposed settlement location,

(e) a second proposed source allocation, and

(f) a second proposed amount of net proceeds,

are entered into the interfacing mechanism; and

for a second securities transaction, a third data set specifying at least one of;

(a) a first proposed settlement location,

(b) a first proposed source allocation, and

(c) a first proposed amount of net proceeds,

are entered into the interfacing mechanism; and

for the second securities transaction, a fourth data set specifying at least one of;

(d) a second proposed settlement location,

(e) a second proposed source allocation, and

(f) a second proposed amount of net proceeds, are entered into the interfacing mechanism;

the computer processing mechanism further including a matching mechanism for matching the first data set to the second data set, for matching the third data set to the fourth data set, and for identifying any matches, as between the first and second data sets, for the first and second proposed settlement locations, the first and second proposed source allocations, and the first and second proposed amounts of net proceeds.