SYSTEM AND METHOD FOR PROVIDING BORROW COVERAGE SERVICES TO SHORT SELL SECURITIES

• US 20110202452A1
• Filed: 02/18/2011
• Published: 08/18/2011
• Est. Priority Date: 02/18/2010
• Status: Active Grant

• Current Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Original Assignee: JP Morgan Chase Bank, N.A. (JP Morgan Chase & Co)
• Inventors: Bax, Matthew, Dobrick, Jeremy M., Sclafani, Jennifer, Fezza, Dean X., Chan, Tommy, Yadlapalli, Rajiv T.
• Granted Patent: US 8,738,514 B2
• Time in Patent Office: Days
• US Class Current: 705/38
• 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

Abstract

The present invention is directed to providing borrow coverage services to clients by a conduit lender, while the conduit lender maintains a flat position. The source of supply for the loans is a liquidity pool from existing agent lenders that have enrolled the conduit lender as a borrower.

Claims

1. A computer implemented method for executing a loan transaction comprising:

receiving, through a computer, a loan request from a borrower;

receiving, through the computer, assets from a plurality of lenders;

verifying, through the computer, that the assets received from the plurality of lenders satisfies the loan request; and

providing the borrower, through the computer, with sufficient assets to satisfy the loan request.

2. The method of claim 1, wherein the assets received from the plurality of lenders are stored in a pool of assets.

3. The method of claim 2, wherein the sufficient assets provided to the borrower are obtained from the pool of assets.

4. The method of claim 1, further comprising the step of receiving collateral for the loan request from the borrower.

5. The method of claim 4, further comprising the step of providing the collateral for the loan request to at least one of the plurality of lenders.

6. The method of claim 5, further comprising the step of determining the particular lenders from the plurality of lenders who provided the sufficient assets provided to the borrower.

7. The method of claim 4, wherein the collateral received from the borrower is stored in a pool of collateral.

8. The method of claim 7, further comprising the step of calculating the amount of collateral necessary to satisfy the lenders and providing the lender with the necessary collateral from the pool of collateral.

9. The method of claim 4, further comprising the step of verifying that the collateral satisfies the loan request.

10. The method of claim 1, wherein the loan request is for securities.

11. The method of claim 4, wherein the collateral is securities or cash.

12. The method of claim 1, wherein the steps are performed by a conduit lender.

13. The method of claim 12, wherein the conduit lender is a banking entity.

14. A computer implemented method for executing a loan transaction through a conduit lender comprising the following steps performed by the conduit lender:

receiving, through a computer, a loan request from a borrower;

storing, in the computer, details of the loan request;

receiving, through the computer, assets from a plurality of lenders;

storing, in the computer, details of the assets from the plurality of lenders;

storing, through the computer, the assets from the plurality of lenders in a pool of assets;

receiving from the borrower, through the computer, collateral for the loan request,

storing, through the computer, the collateral in a pool of collateral, matching, through the computer, assets from the pool of assets which satisfy the loan request and collateral from the pool of collateral which satisfies the lenders from the plurality of lenders;

providing the borrower, through the computer, with sufficient assets to satisfy the loan request; and

providing the matched lenders with collateral from the pool of collateral.

15. The method of claim 14, wherein the conduit lender is a banking entity.

16. The method of claim 14, wherein the loan is for securities.

17. The method of claim 14, wherein the collateral is securities or cash.

18. A system for executing a loan transaction comprising:

a programmable computer;

a database; and

one or more processors coupled to the programmable computer and the database, the processors configured to;

receive a loan request from a borrower;

store details of the loan request;

receive assets from a plurality of lenders;

store details of the assets from the plurality of lenders;

store the assets from the plurality of lenders in a pool of assets;

receive collateral for the loan request from the borrower;

store the collateral in a pool of collateral;

match assets from the pool of assets which satisfy the loan request and collateral from the pool of collateral which satisfies the lenders from the plurality of lenders;

provide the borrower, through the computer, with sufficient assets to satisfy the loan request; and

provide the matched lenders with collateral from the pool of collateral.

19. A system for executing a loan transaction comprising:

a programmable computer;

one or more processors coupled to the programmable computer and coupled to;

a principal component configured to receive a loan request from a borrower, receive assets from a lender, and transmit assets from the lender to the borrower;

a lending component configured to manage assets of the lender; and

a custody component configured to store assets.