Method and apparatus for facilitating transactions on a commercial network system

• US 6,236,972 B1
• Filed: 12/21/1998
• Issued: 05/22/2001
• Est. Priority Date: 12/02/1998
• Status: Expired due to Term

• Current Assignee: Red Hat, Inc. (International Business Machines Corporation)
• Original Assignee: Shkedy, Gary
• Inventors: Shkedy, Gary
• Primary Examiner(s): Trammell, James P.
• Assistant Examiner(s): Tesfamariam, Mussie
• Application Number:
  US09/217,663
• Time in Patent Office: 883 Days
• Field of Search: 705/1, 705/26, 705/37, 705/75, 705/77, 705/80, 713/173, 713/186, 340/825.31, 340/825.34, 380/25
• US Class Current: 705/26.1
• CPC Class Codes: G06Q 10/087 Inventory or stock management, e.g. order filling, procurement or balancing against orders
• CPC Class Codes: G06Q 20/00 Payment architectures, schemes or protocols apparatus for performing or posting payment transactions G07F7/08, G07F19/00; electronic cash registers G07G1/12
• CPC Class Codes: G06Q 20/085 involving remote charge determination or related payment systems
• CPC Class Codes: G06Q 20/12 specially adapted for electronic shopping systems
• CPC Class Codes: G06Q 20/208 Input by product or record sensing, e.g. weighing or scanner processing
• CPC Class Codes: G06Q 20/401 Transaction verification
• CPC Class Codes: G06Q 30/06 Buying, selling or leasing transactions
• CPC Class Codes: G06Q 30/0601 Electronic shopping [e-shopping]
• CPC Class Codes: G06Q 30/0611 Request for offers or quotes
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 50/188 Electronic negotiation

Abstract

A method and device for using a computer to facilitate a transaction of secondary market shares of an investment company such as a mutual fund between a buyer and a seller, having the steps of: a customer determining the mutual fund to be traded receiving a schedule of fees from the central controller, the customer selecting the class of shares and inputting the quantity to be traded, the customer selecting the order type and adding any special instructions. The customer then submits the order to the central controller. The central controller will match buyers and sellers and determine which orders were executed. For all executions, the central controller will provide the seller with payments and the buyer with shares in the selected mutual fund.

Claims

1. A computer based method for facilitating a secondary market transaction of shares of investment companies between at least one buyer, an intermediate, and a seller, comprising:

receiving at the intermediate a sell order to sell in the secondary market shares of an investment company from the seller, binding the seller to said intermediate, said intermediate having a central controller including database storage;

assigning a sell tracking identification, corresponding to said sell order and said seller;

storing said sell order and sell tracking identification in said database;

receiving a buy order from the buyer,

assigning a buy tracking identification company to said buy order and said buyer;

storing said buy order and buy tracking identification to said database;

scanning the database for matching sell and buy orders;

binding the buyer to the intermediate;

executing trade upon a match;

forwarding trade confirmation to a transfer agent; and

forwarding confirmations of transaction to the buyer and the seller.

2. The method of claim 1, wherein either the buyer or the seller stipulates a discount or premium off the NAV.

3. The method of claim 1, wherein either the buyer or the seller stipulates a price for the shares they will trade.

4. The method of claim 1, wherein the purchase stipulation is a commission or cancellation fee defined by the intermediate.

5. The method of claim 2, wherein said buy or sell order further includes a settlement date.

6. The method of claim 2, wherein the buy or sell order further comprises a quantity specifier.

7. The method of claim 6, wherein the buyer or seller specifies additional conditions on the shares in the order.

8. The method of claim 6, further comprising the step of authenticating by the central controller the identification and authority of the customer.

9. The method of claim 8, wherein the step of authentication of the customer'"'"'s identification is by comparing the customer'"'"'s identification, with a customer identification stored in the central controller database.

10. The method of claim 8, wherein the step of authentication of the customer'"'"'s identity is by authenticating the customer'"'"'s smart card with a smart card issuer.

11. The method of claim 8, wherein the step of authentication of the customer'"'"'s identification is by cryptographic means.

12. The method of claim 11, wherein the to cryptographic means includes a symmetric or asymmetric key algorithm including one of DSA, DES, hash protocols and digital signatures.

13. The method of claim 8, wherein the step of authentication of the customer'"'"'s identification is by biometric means.

14. The method of claim 8, wherein the step of authentication of the authority of multiple persons at a single customer is performed by cryptographic means.

15. The method of claim 1, further comprising the step of providing a payment to the seller.

16. The method of claim 15, wherein the step of providing payment to the seller has an automatic payment management system.

17. The method of claim 8, wherein the payment is currency.

18. The method or claim 8, wherein the payment is barter.

19. The method of claim 1, further comprising the step of transferring said shares to the buyer.

20. The method of claim 1, wherein communications between the buyer, intermediary, and the seller is conducted over an electronic network.

21. The method of claim 1 wherein the communication of buyer and seller with the central controller is achieved by the use of software agents.

22. The method of claim 1, wherein communications between the buyer, intermediary, and the seller is conducted over a telecommunications network.

23. The method of claim 1, further including the step of facilitating retrieval of buy or sell orders at said central controller by anyone having access to said central controller.

24. The method of claim 1, wherein said investment company is a mutual fund.

25. The method of claim 1, wherein said investment company is a hedge fund.

26. The method of claim 1, wherein said buy or sell order is created by said intermediary.

27. The method according to claim 1, wherein another buyer or seller stipulates derivatives on said shares.

28. A device having stored programs executable by a computer to perform method steps for facilitating transactions of shares of an investment company between a seller, a buyer, and an intermediate, the method steps comprising:

receiving at the intermediate a sell order to sell in a seconday market shares of an investment company from the seller, binding the seller to said intermediate;

assigning a sell tracking identification corresponding to said sell order and said seller;

assigning said sell order and sell tracking identification in said database;

receiving a buy order from the buyer binding the buyer to said intermediate;

assigning a buy tracking identification to said buy order;

storing said buy order and buy tracking identification in said database;

scanning the database for matching sell and buy orders;

executing trade upon a match;

forwarding trade confirmation to a transfer agent; and

forwarding confirmations of transaction to the buyer and the seller.

29. A controller having stored programs for facilitating a secondary market transaction of shares of an investment company between a seller, a buyer, and an intermediate, the method steps comprising:

means in said intermediate to act as one of a seller, an intermediate, and a buyer;

means for receiving at the intermediate a sell order to sell in the secondary market shares of an investment company from the seller, binding the seller to said intermediate;

means for assigning a sell tracking identification corresponding to said sell order and said seller;

means for assigning said sell order and sell tracking identification in said database;

means for receiving a buy order from the buyer, binding the buyer to said intermediate;

means for assigning a buy tracking identification to said buy order;

means for storing said buy order and buy tracking identification in said database;

means for scanning the database for matching sell and buy orders;

means for executing trade upon a match;

means for forwarding trade confirmation to a transfer agent; and

means for forwarding confirmations of transaction to the buyer and the seller.