Securities brokerage-cash management system

• US 4,346,442 A
• Filed: 07/29/1980
• Issued: 08/24/1982
• Est. Priority Date: 07/29/1980
• Status: Expired due to Term

• Current Assignee: Bank of America Corp.
• Original Assignee: Merrill Lynch Pierce Fenner & Smith Incorporated (Bank of America Corp.)
• Inventors: Musmanno, Thomas E.
• Primary Examiner(s): Smith, Jerry
• Application Number:
  US06/173,331
• Time in Patent Office: 756 Days
• Field of Search: 364/200, 364/300, 364/408, 364/900
• US Class Current: 705/36.00R
• CPC Class Codes: G06Q 20/403 Solvency checks
• 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 40/06 Asset management; Financial planning or analysis

Abstract

Data processing for an improved securities brokerage/cash management system supervises, implements and coordinates a margin securities brokerage account; participation in one or more short term money market or comparable funds; and subscriber-initiated use of electronically responsive subscriber identity credit/debit media and/or checking systems. Subscriber expenditures, effected as by "charge card" use, check and/or cash advance are applied on a hierarchal basis, seriatim, against the subscriber'"'"'s free credit balance, short term investment and the lendable equity in his securities account. On a periodic basis, e.g., daily, received card charges, check, securities and deposit transactions for the ensemble of account participants are verified and employed to compute an updated credit limit for each subscriber. The transactional data is reviewed against predetermined norms to detect abuses such as check kiting. The short term investment position of each account is modified as necessary to permit money market or comparable earned yields on the account free credit cash balance.

Claims

1. In combination in a system for processing and supervising a plurality of composite subscriber accounts each comprising a margin brokerage account, a charge card and checks administered by a first institution, and participation in at least one short term investment, administered by a second institution, said system including brokerage account data file means for storing current information characterizing each subscriber margin brokerage account of the second institution, manual entry means for entering short term investment orders in the second institution, data receiving and verifying means for receiving and verifying charge card and check transactions from said first institution and short term investment orders from said manual entry means, means responsive to said brokerage account data file means and said data receiving and verifying means for generating an updated credit limit for each account, short term investment updating means responsive to said brokerage account data file means and said data receiving and verifying means for selectively generating short term investment transactions as required to generate and invest proceeds for subscribers'"'"' accounts, wherein said system includes plural such short term investments, said system further comprising means responsive to said short term updating means for allocating said short term investment transactions among said plural short term investments, communicating means to communicate said updated credit limit for each account to said first institution.

3. A combination as in claim 1 or 2 wherein said updated credit limit generating means comprises means for accumulating the amount of charge card usage and checks for each subscriber, means responsive to said brokerage account data file means for generating a subscriber updated credit limit measured by the difference between the limiting residual subscriber brokerage account securities loan value augmented by the value of the subscriber'"'"'s short term investment, decremented by the value of the subscriber'"'"'s aggregate expenditures and funds required for brokerage account purposes, means for reporting said updated credit limit to said brokerage account data file means.

4. A combination as in claim 3 further comprising means for generating a subscriber loan record when the subscriber'"'"'s aggregated expenditures exceed the value of the short term investments and securities loan value as reported by said brokerage account data file means, and by said updated credit limit.

5. A combination as in claim 4 further comprising cross reference file means connected to said receiving and verifying means for assuring that received transactions are for customers having an entry in said cross reference file means.

6. A combination as in claim 5 wherein said short term transaction generating means comprises short term investment account buying and selling means, means for computing the difference between the brokerage account cash balance of said brokerage account data file and fund requirements representing the sum of the account expenditures and funds required for brokerage account and settlement purposes, and means for activating either said short term investment buying or selling means depending upon whether said account balance difference computing means senses a positive or negative difference.

2. In combination in a system for processing and supervising a plurality of composite subscriber accounts each comprising a margin brokerage account, a charge card and checks administered by a first institution, and participation in at least one short term investment, said system including brokerage account data file means for storing current information characterizing each subscriber margin brokerage account, manual entry means for entering short term investment orders, data receiving and verifying means for receiving and verifying charge card and check transactions from said first institution and short term investment orders from said manual entry means, means responsive to said brokerage account data file means and said data receiving and verifying means for generating an updated credit limit for each account, short term investment updating means responsive to said brokerage account data file means and said data receiving and verifying means for selectively generating short term investment transactions as required to generate and invest proceeds for subscribers'"'"' accounts, said system further comprising means for generating a stored record of each subscriber deposit, charge card and check transactions, and anti-kiting means for providing an output alert record responsive to either of said deposits, or the check or charge card expenditures exceeding predetermined maximum bounds in amount and frequency, communicating means to communicate said updated credit limit for each account to said first institution.