Systems, methods and computer program products for processing orders subject to investment restrictions

• US 7,912,778 B2
• Filed: 03/27/2006
• Issued: 03/22/2011
• Est. Priority Date: 03/27/2006
• Status: Active Grant

• Current Assignee: Tegra118 Wealth Solutions, Inc.
• Original Assignee: Checkfree Corporation (Fiserv Incorporated)
• Inventors: Nanjundamoorthy, Hari
• Primary Examiner(s): Merchant; Shahid R
• Assistant Examiner(s): GREGG, MARY M
• Application Number:
  US11/389,909
• Publication Number:
  US 20070226120A1
• Time in Patent Office: 1,821 Days
• Field of Search: None
• US Class Current: 705/37
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof
• CPC Class Codes: G06Q 40/04 Trading; Exchange, e.g. stocks, commodities, derivatives or currency exchange
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

Methods and systems process multiple trade orders subject to investment account restrictions. The restrictions are associated with the holding of one or more securities or with a cash position in an investment account. Each received order to perform an investment account management action is processed to determine whether performance of the action violates any stored restriction. The investment account is updated to reflect the result of executing the orders that did not violate any stored restriction. All received orders that are found to be in violation of a restriction are then processed again to determine whether performance of the action now violates any stored restriction. This technique allows for approving for execution as many trade orders subject to restrictions as possible.

Claims

1. A method, comprising:

receiving a group of trade orders, wherein the group includes at least a first trade order and a second trade order, for an investment account, wherein one or more restrictions are stored in association with the investment account;

processing, by a portfolio management system comprising one or more computers, the group of trade orders according to at least two phases by;

during a first phase, (i) placing the first trade order in a respective pending state based upon determining that the first trade order violates at least one of the one or more stored restrictions, whereby the first trade order is not approved for execution based upon its placement in the respective pending state;

(ii) placing the second trade order in a respective passed state subsequent to determining that the second trade order does not violate at least a subset of the one or more stored restrictions; and

(iii) updating at least one of a temporary cash holdings field or a temporary security holdings field associated with the investment account to reflect an anticipated effect of an execution of the second trade order, wherein the temporary cash holdings field or the temporary security holdings field is updated prior to the any actual execution of the second trade order; and

during a second phase following the first phase, reconsidering one or more trade orders in the respective pending state, thereby (i) determining, subsequent to updating at least one of the temporary cash holdings field or the temporary security holdings field of the investment account, that the first trade order does not violate no longer violates the at least one of the one or more stored restrictions, and (ii) moving the first trade order from the respective pending state to the respective passed state;

wherein a result of processing the group of trade orders is that both the first and second trade orders are both approved for execution based upon both the first and second trade orders being in the respective passed state.

2. The method of claim 1, further comprising:

ordering, by the portfolio management system, the received group of trade orders prior to processing the group of trade orders.

3. The method of claim 2, wherein ordering comprises ordering the received group of trade orders based on order type or trade value.

4. The method of claim 3, wherein ordering based upon order type comprises (i) grouping “

sell”

trade orders first, (ii) grouping “

buy”

trade orders first, or (iii) alternating “

sell”

trade orders and “

buy”

trade orders, and wherein ordering based upon trade value comprises (i) ordering by ascending trade value or (ii) ordering by descending trade value.

5. The method of claim 1, wherein determining that the first trade order violates at least one of the one or more stored restrictions comprises iteratively comparing each of the trade orders against at least a subset of the one or more stored restrictions.

6. The method of claim 1, further comprising:

executing, by the portfolio management system, the first trade order subsequent to processing the group of trade orders that resulted in the first trade order being in the respective passed state.

7. The method of claim 1, wherein the one or more stored restrictions are further associated with an investment style of a plurality of investment styles of the investment account, an investment program associated with the investment account, or a client associated with the investment account.

8. The method of claim 1, wherein the one or more stored restrictions:

prohibit holding of a security in the investment account;

prohibit holding less than a percentage of a security in the investment account;

prohibit holding less than a monetary value of a security in the investment account;

prohibit holding less than a pre-defined percentage of securities in a particular industry;

prohibit holding less than a pre-defined monetary value of securities in a particular industry;

require holding of a security in the investment account;

prohibit holding more than a percentage of a security in the investment account;

prohibit holding more than a monetary value of a security in the investment account;

prohibit holding more than a pre-defined percentage of securities in a particular industry;

or prohibit holding more than a pre-defined monetary value of securities in a particular industry.

9. The method of claim 1, wherein updating at least one of the temporary cash holdings field or the temporary security holdings field includes updating an asset allocation associated with the investment account to reflect an effect of an execution of the second trade order, wherein the updated asset allocation is utilized in determining that the first trade order does not violate the at least one of the one or more stored restrictions.

10. The method of claim 1, wherein actual cash holdings or actual security holdings are updated following actual execution of the first trade order or the second trade order.

11. The method of claim 1, wherein the group of trade orders includes a third trade order, and further comprising:

during the first phase, determining, that the third trade order violates at least one of the one or more stored restrictions, whereby the third trade order is placed in a respective pending state; and

during the second phase, ordering the trade orders that are in the respective pending state, including the first trade order and the third trade order, prior to determining, subsequent to updating at least one of the temporary cash holdings field or the temporary security holdings field associated with the investment account, that the first trade order no longer violates any of the one or more stored restrictions.

12. A system, comprising:

at least one memory configured to store one or more restrictions; and

at least one processor configured to receive a group of trade orders, wherein the group includes at least a first trade order and a second trade order, for an investment account;

wherein the at least one processor is configured to process the group of trade orders according to at least two phases by;

during a first phase, (i) place the first trade order in a respective pending state based upon determining that the first trade order violates at least one of the one or more stored restrictions, whereby the first trade order is not approved for execution based upon its placement in the respective pending state;

(ii) place the second trade order in a respective passed state subsequent to determining that the second trade order does not violate at least a subset of the one or more stored restrictions; and

(iii) update at least one of a temporary cash holdings field or security holdings field associated with the investment account to reflect an anticipated effect of an execution of the second trade order, wherein the temporary cash holdings field or the temporary security holdings field is updated prior to any actual execution of the second trade order; and

during a second phase following the first phase, reconsidering one or more trade orders in the respective pending state, thereby (i) determining, subsequent to updating at least one of the temporary cash holdings field or the temporary security holdings field of the investment account, that the first trade order no longer violates the at least one of the one or more stored restrictions, and (ii) moving the first trade order from the respective pending state to the respective passed state;

wherein a result of processing the group of trade orders is that both the first and second trade orders are both approved for execution based upon both the first and second trade orders being in the respective passed state.

13. The system of claim 12, wherein the at least one processor is further configured to order the received group of orders prior to processing the group of trade orders.

14. The system of claim 13, wherein the at least one processor is further configured to order the received group of trade orders based on order type or trade value.

15. The system of claim 14, wherein the at least one processor is configured to order based upon order type by (i) grouping “

sell”

trade orders first, (ii) grouping “

buy”

trade orders first, or (iii) alternating “

sell”

trade orders and “

buy”

trade orders, and wherein the at least one processor is configured to order based upon trade value by (i) ordering by ascending trade value or (ii) ordering by descending trade value.

16. The system of claim 12, wherein the at least one processor is further configured to iteratively compare each of the trade orders against all of the stored one or more restrictions.

17. The system of claim 12, wherein the at least one memory configured to store one or more restrictions further comprises at least one memory configured to store restrictions:

prohibiting holding of a security in the investment account;

prohibiting holding less than a percentage of a security in the investment account;

prohibiting holding less than a monetary value of a security in the investment account;

prohibiting holding less than a pre-defined percentage of securities in a particular industry;

prohibiting holding less than a pre-defined monetary value of securities in a particular industry;

requiring holding of a security in the investment account;

prohibiting holding more than a percentage of a security in the investment account;

prohibiting holding more than a monetary value of a security in the investment account;

prohibiting holding more than a pre-defined percentage of securities in a particular industry;

or

prohibiting holding more than a pre-defined monetary value of securities in a particular industry.

18. The system of claim 12, wherein the at least one processor is configured to update actual cash holdings or actual security holdings following actual execution of the first trade order or the second trade order.

19. The system of claim 12, wherein the group of trade orders includes a third trade order, and wherein the at least one processor is further configured to:

during the first phase, determine that the third trade order violates at least one of the one or more stored restrictions, whereby the third trade order is placed in a respective pending state; and

during the second phase, order the trade orders that are in the respective pending state, including the first trade order and the third trade order, prior to determining, subsequent to updating at least one of the temporary cash holdings field or the temporary security holdings field associated with the investment account, that the first trade order no longer violates any of the one or more stored restrictions.

20. The system of claim 12, wherein the at least one processor is further configured to execute the first trade order subsequent to processing the group of trade orders that resulted in the first trade order being in the respective passed state.

21. The system of claim 12, wherein the one or more stored restrictions are further associated with an investment style of a plurality of investment styles of the investment account, an investment program associated with the investment account, or a client associated with the investment account.

22. The system of claim 12, wherein the update of at least one of the temporary cash holdings field or the temporary security holdings field associated with the investment account includes updating an asset allocation associated with the investment account to reflect an effect of an execution of the second trade order, wherein the updated asset allocation is utilized in determining that the first trade order no longer violates the at least one of the one or more stored restrictions.