WO2001009788A1

WO2001009788A1 - Selling heavily negotiated items

Info

Publication number: WO2001009788A1
Application number: PCT/US2000/020428
Authority: WO
Inventors: Ronald Dekoven
Original assignee: Ereorg.Com Group, Inc.
Priority date: 1999-07-29
Filing date: 2000-07-27
Publication date: 2001-02-08
Also published as: AU6381800A

Abstract

An item auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user's terminal. The item is associated at the time of posting with settlement (934) terms selected from a set of predefined settlement terms. The item is associated at the time of posting with an individual previously registered (916) with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with. The user has previously registered with the automated auction system and been approved to bid for items by a contact of an organization that the individual is connected with. Consent to a sale associated with the posting is obtained from a third party having a legal right to consent the sale.

Description

SELLING HEAVILY NEGOTIATED ITEMS

BACKGROUND OF THE INVENTION

The present invention relates to an automated auction system and method for auctioning items which have been previously sold with substantial negotiation between parties.

Trading systems for items having substantial value generally are an automated version of a manual trading process. For example, securities trading systems are based on a model wherein a customer contacts a so-called retail broker to place an order. The broker, in turn, submits the order to a dealer who executes the order and returns an order confirmation to the broker. Other known systems automate the open outcry process used in trading pits. Importantly, securities trading is heavily regulated. Many of the terms and conditions prevalent in securities trades are limited by convention and regulation. Automated securites trading systems necessarily reflect these constraints.

Consumer-directed Internet-based auction systems have recently become popular. Most of these systems function primarily as advertising and bid collection systems, and do not provide facilities for post-trade activities such as payment and delivery. Some auction systems have payment functions, but the payment is directed to a specific well-defined process such as credit card authorization or debiting or the like. Furthermore, these systems deliberately do not verify the identity or authority of parties to participate in the auction process.

Many valuable items, such as debt of corporations owed to either a bank or a trade creditor, are presently traded between financial institutions and financial funds in a manner that is unsuitable for the aforementioned trading and auction systems. Due to the nature of the item, buyers conduct due diligence reviews prior to the sale and sellers respond to buyers' questions. Buyers and sellers must negotiate and then execute a plethora of documents to transfer the item, and require consent from the agent bank or issuer of debt, to the sale. These transactions are not regulated. The particular terms and conditions of each sale may vary widely, depending on the nature of the item, perceived risk, practices of the particular seller and buyer, the nature of the item, the negotiations between parties and so on.

Despite the many differences in the terms and conditions of trading in such items, it is desirable to automate such trading, to improve efficiency and increase market liquidity. There is no known automated system that is satisfactory for trading such heavily negotiated items.

SUMMARY OF THE INVENTION In accordance with an aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user's terminal. The item is associated at the time of posting with settlement terms selected from a set of predefined settlement terms. From the terminal viewpoint, information about an item available for bids on an automated auction system is requested, and the information is displayed on the terminal. In a further aspect of this invention, the item is one of bank debt, trade debt, an emerging markets debt instrument and distressed commercial real estate.

In accordance with another aspect of this invention, a method of auctioning an item, comprises posting the item as available for bids on an automated auction system, sending information about the item to a user for display on the user^'s terminal, receiving a document download request from the user, and downloading a document to the user. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal, a document download is requested, and the downloaded document relating to the item is received.

In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user's terminal. A message is received from a seller of the item for the user, information identifying the seller is removed from the message to create an anonymous message, and the anonymous message is forwarded to the user. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal, and a message is received from the seller of the item for the user, the message lacking information identifying the seller.

In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user's terminal. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal. The item is associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with.

In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal. The user has previously registered with the automated auction system and been approved to bid for items by a contact of an organization that the individual is connected with.

In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal. Consent to a sale associated with the posting is obtained from a third party having a legal right to consent to the sale at the time of posting. In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal. After confirming that the user has defaulted on his or her winning bid, the item is transferred to a bidder's default market. From the terminal viewpoint, information is received about an item which has been auctioned on an automated auction market system to a winning bidder who has defaulted, and instruction is sent to the automated auction system to re-auction the item.

In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal. The automated auction system automatically arranges for the posted item to be insured against a risk of default by a winning bidder. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal, the item being automatically insured against risk of default by a winning bidder.

In accordance with another aspect of this invention, an item is auctioned by posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal. The user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system. From the terminal viewpoint, information about an item available for bids is requested and displayed on the terminal of a user who user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system. In accordance with another aspect of this invention, a method of collecting market data about auctions comprises collecting data about the item when its auction closes as closed market data, and storing the closed market data. From the terminal viewpoint, a method of receiving market data about auctions is provided, in which data is received about an auctioned item when its auction closes as closed market data, and the closed market data is stored.

In a further aspect of the invention, data about the item is collected and stored when the item clears.

It is not intended that the invention be summarized here in its entirety . Rather, further features, aspects and advantages of the invention are set forth in or are apparent from the following description and drawings.

BRIEF DESCRIPTION OF THE DRAWINGS

Fig. 1 is a block diagram of an automated auction system employing the present invention;

Fig. 2 is a chart showing the organization of pages available to users of the automated auction system shown in Fig. 1 ;

Figs. 3 and 4 are flowcharts showing a registration process for an organization and an individual, respectively; Fig. 5 is a flowchart showing a process for posting items for auction;

Fig. 6 is a flowchart showing an auction process; Fig. 7 is a flowchart showing post-auction processing; Fig. 8 is a flowchart showing use of the bidder's default market; Fig. 9 is a chart illustrating an auction posting page; and Fig. 10 is a diagram illustrating a display at a user terminal.

DETAILED DESCRIPTION OF EMBODIMENTS The present invention is directed to automated auctioning of heavily negotiated items. Users employ terminals to access a centralized auction computer system.

Referring now to the drawings, and in particular to Fig. 1, there is illustrated a block diagram of automated auction system 100 employing the present invention. Central system 150 of automated auction system 100 is a general purpose computer programmed with software programs including server program 151, registration program 152, auction market program 154, market data program 156, and bidder's default market program 158.

Server program 151 functions to accept messages from terminals coupled to central system 150, and to provide responses thereto. In one embodiment, server program 151 is operative according to the hypertext transfer protocol (HTTP) used on the Internet, and is a WebLogic web server program running on a Microsoft NT operating system. Alternative!} . an Apache or Netscape web server program could be used. Other suitable web server programs will be known to those of ordinary skill in the art. Registration program 152 is operative to register new users with automated auction system 100. In one embodiment, unregistered users may search and view open auctions and open market data, but, to post items for sale, bid on items or view historical market data, a user must be registered. Registration is discussed in detail below with respect to Figs. 3 and 4. Auction market program 154 is operative to provide the functions of an auction market and to act as an anonymous remailer of messages between bidders and sellers. A commercially available program such as LiveExchange from Moai Technologies. San Francisco, California, is a suitable platform for auction market program 154, and is modified in accordance with the present system to include one or more of the following features:

• Real-time update capabilities

• Group-based security model allows access to auctions and groups of auctions to be limited to specific users or groups of users. Access can be specified as none, view only, or full bidding privileges. • Cross-platform Java-based architecture

• Configuration tool for modification of system parameters • Console log monitors various types of system events and information including warnings, audits, and errors

• Console status viewing shows number and list of users connected and logged in

• Integration with third party and custom applications through SQL database queries or custom Java extension module development

• Unlimited number of hierarchies in auction catalogs. The flexible database structure allows easily maintainable catalogs to be created with no limits to number of items or levels

• Featured auctions: lists of featured auctions can be designated for highlighting within templates

• Rotating auction ads, with a list of auctions designated for highlighting in ad window

• Auction search functionality based on auction attributes such as name, start time, specifications of posted debt

• Registration/security: viewing and bidding in auctions can be restricted to registered or validated users only. IP-based access rights for Java bidders, HTML bidders, and administrative user

• Standard SQL database tables allow easy integration with other applications or report generation

• E-mail error notifications to administrator • RSA encrypted connections

• Secure socket layer

• Secure ID token-based authentication system

• Java APIs allow network-based programmatic access to system data The system optionally supports the following auction formats and features: • English (traditional open-outcry, ascending price format)

• Dutch (open-outcry, descending price format)

• Private auctions (only bids from specified users accepted)

• Sealed bid auctions

• Sealed bid auctions wherein the high bidder obtains the item at the price bid by the next-to-highest bidder

• Reverse auctions (users list items they wish to purchase) Single items or multiple simultaneous items supported per auction

Auto-extend: closing time can be variable and can automatically extend while bidding activity continues

Close by price: auction can automatically close upon reaching a certain price

Proxy bidding (system bids for participant until bidder^'s maximum price is reached)

E-mail notifications for outbid, won. lost, new, open. List server type functionality for new e-mail notifications. All e-mail notifications are customizable via templates.

Reserve prices in auctions

Minimum bid limit in auctions

Limits on participation to include only bidders with specified credit profiles

Credit limits for users

Bid increments can be set as either fixed amount or percentage of last bid • Currency of bids (dollars, euros, yen and so on)

The auction process is discussed in detail below with respect to Figs. 5-7.

Market data program 156 is operative to collect bids placed via auction market program 154 as open market data, to store open market data, and to return stored open market data in response to search queries. Other financial instruments such as an option or future for an index on listed debt, not part of the present system, may depend on the market data. As described below, after an auction is completed, the auctioned item has a "closed" status until the item has cleared, that is. payment has been made and title transferred. Market data program 156 also collects information about completed and cleared auctions as closed and cleared auction market data, respectively; stores closed and cleared market data; and returns stored closed and cleared market data in response to search queries. Market data program 156 may also provide a so-called "ticker" for the open, closed and cleared market data, comprising real-time distribution of such market data. In some embodiments, market data program 156 maintains historical files of open, closed and cleared market data for subsequent statistical and activity analysis. Bidder's default market program 158 functions to accept items on which the winning bidder has defaulted, to offer these items to bidder^'s default market participants, and to notify appropriate parties as to which bidder's default market participant is substituting for the defaulting bidder. The bidder's default market is discussed in detail below with respect to Fig. 8.

Central system 150 is coupled to storage 160, which is a magnetic disk. Alternatively, storage 160 may be a combination of magnetic, optical an/or magneto-optic storage devices. Storage 160 functions to store software programs executed by central system 150, client software for downloading to user terminals to enable streaming market data to users, pages of information available to users, logs created by the software programs executed by central system 150, and databases of registered users, posted items, bid data for open and completed auctions, and market data.

Central system 150 also includes communication ports 170 and 180 for receiving news information and market data for related trading instruments, such as futures or options based on an index of items being traded.

Central system 150 is coupled to terminals 1 10-140 via appropriate communication interfaces, such as the Internet, a dialed connection over the public switched telephone network (PSTN), and dedicated wireline or wireless communication links. Alternatively, the communication interface may be a link to an in-house communication network of an organization. Other communication interfaces will be apparent to one of ordinary skill in the art. Terminal 120 is operated by a user. Terminal 120 is a general purpose personal computer executing the Microsoft Windows operating system and Internet browser 122 such as Netscape Navigator or Microsoft Internet Explorer. Alternatively, a different operating system may be used. In some embodiments, when the user registers with the automated auction system, applet 124 is downloaded to user terminal 120. Other suitable terminal interfaces will be apparent to one of ordinary skill in the art.

Terminal 1 10 is operated by a corporate contact. Terminal 1 10 is a general purpose computer programmed for accessing electronic mail directed to a specific electronic address. Terminal 1 10 functions to receive notices from central system 150 for a corporate contact, discussed below. Terminals 130 and 140 are similar to terminal 110, except that they function to receive notices from central system 150 for a third party having a legal right in an item being traded and a bidder's default market participant, discussed below. Fig. 2 is a chart showing an organization of pages available to users of the automated auction system shown in Fig. 1. In one embodiment, the pages of Fig. 2 are made available to users through the Internet, specifically, the World Wide Web, and are sometimes referred to as web pages. Page 200 is a homepage, the starting point for access to the automated auction system. Page 200 includes portions that can be indicated by a user, such as by clicking with a mouse, to activate a hyperlink, that is, a request initiated by a browser for a resource, such as a web page or image. Page 200 is hyperlinked to pages 210, 220, 230, 240, 250, 260, 270 and 280. To activate the hyperlinks to pages 270 and 280, a user must have previously registered and been suitably authorized.

Page 210 is a page providing information about the operator of the automated auction market system.

Page 220 is a page providing information on how to contact the operator of the automated auction market system. Page 230 is a page providing relevant news, such as stories received by central system 150 via communication interface 170.

Page 240 is a page providing help, frequently asked questions (FAQs) and answers thereto, and so on.

Page 250 is a page enabling a user to register with the automated auction market system. Page 250 is hyperlinked to pages 252, 254, 256, and 258, which enable registration as an organization, as an individual, as a third party which may have a legal interest in an item posted or about to be posted on the automated auction market system, and as a bidder^'s default market participant, respectively. Each of pages 252-258 supports creating a new registration and updating an existing registration. Registration as an organization and as an individual is discussed below. Registration as a third party or as a bidder's default market participant is according to a generally similar process. A registered user may be able to access pages which are not available to a non-registered user, such as by providing an appropriate password.

Page 260 is a page enabling access to the automated auction market. Page 260 is hyperlinked to pages 261 , 263, 265 and 267.

Page 261 enables a user to input search terms relating to open and completed auctions. Browser 122 sends an HTTP request with form data consisting of the inputted information to server program 151 of central system 150, which passes the request to auction market program 154. which, in turn, gathers information responsive to the request, formats the responsive information into a hypertext markup language (HTML) page, and passes the HTML page to server program 151 for transmission to browser 122. When the user locates an item of interest, and if the user is a registered user, the user may activate a hyperlink to page 262, which enables the user to bid on the posted item of interest.

Page 263 enables a user to research posted items. In one embodiment, page 263 comprises hyperlinks to information sources, such as the SEC Electronic Data Gathering and Retrieval (EDGAR) database, analyst reports on entities relevant to posted items and so on. In one embodiment, analyst reports are stored on auction market system 150. In another embodiment, links to analyst reports on other web site are provided. Additionally, qualified individuals may be listed as sources of information regarding the legal meaning of documents pertaining to posted items, as discussed below.

Page 265 enables a user who is registered with appropriate authorization to post items. Posting an item is discussed below with respect to Fig. 5.

Page 267 enables a registered user to view information pertaining to themselves. Individuals can request a page containing their postings and bids. Postings are shown as "'pending," that is, submitted but waiting for lapse of a waiting period and not yet commenced; "open," that is, an auction in-progress; "closed,'' that is, the auction has completed but settlement (transfer of payment and title) has not yet completed; or

"historical," that is, auctioned items for which settlement has completed. Bids are shown as open, closed, or historical, corresponding to the terminology used for postings. Open bids may be further indicated as being the high bid or as not being the high bid. Users who are corporate contacts can see information for all authorized individual users connected to their organization.

The automated auction market system also allows a user to download data pertaining to that user's activity. More specifically, an individual or organization can download data relating to their activity, for integration with their in-house trading and monitoring systems. Page 269 is an electronic bulletin board wherein users can post items they are interested in buying, to stimulate auction postings from users possessing such items and wishing to sell them. The electronic bulletin board may manifest as an anonymous system allowing users to negotiate bid and ask prices. Page 270 enables a user registered as a third party to request a page containing open auction postings for which consent to a sale associated with an auction posting has been granted, information relating to closed auctions for which consent has been granted, and historical auctions. Page 280 enables a user registered as a bidder^'s default market participant to request a page containing information relating to closed auctions in which they are involved, that is, auctions which are in the bidder's default market since the winning bidder defaulted, and completed auctions.

Figs. 3 and 4 are flowcharts showing a registration process for an organization and an individual, respectively.

To bid or sell on the automated auction market system, a user must register as an individual and be connected to a registered organization. Only individuals can bid, that is, organizations cannot place bids. Each individual account has only one user. An organizational account may have multiple users. At registration, the automated auction market system performs or facilitates a manual authentication check to confirm the identity of the organization or individual user and its qualification for use of the automated auction system. The organization is legally responsible for the actions of individuals connected thereto. Legally, the individuals connected to an organization are agents of the organization. Registered individuals and organizations may have confidentiality obligations for data obtained from the auction market system.

Turning now to Fig. 3, at step 310. the automated auction market system receives a completed organization registration form from an individual serving as a designated corporate contact. As used herein, "organization" refers to a legally recognized entity other than an individual, such as a corporation or partnership. The contact individual within the organization is referred to as a "corporate contact", although the organization may be other than a corporation. The registration information indicates the types of items the organization wishes to trade, and whether it wishes to do so as a buyer or seller or both. The registration information also includes data related to capacity to trade, such as Standard & Poor's rating, or amount of assets under management. The automated auction system may have minimum trading capacity requirements, by type of item being traded, and may also require previous experience. The registration information indicates a person as corporate contact, and provides a electronic mail address, a physical mail address, a telephone and a facsimile telephone number for the corporate contact.

At step 320, registration program 152, shown in Fig. 1 , automatically gathers information about the organization, such as requesting a Dun & Bradstreet report, downloading the organization^'s most recent 1 OK report from the SEC EDGAR database, finding the Internet site of the organization, obtaining recent news reports on the organization and so on. In some embodiments, registration program 152 also automatically gathers information about the corporate contact, verifies the electronic mail address of the corporate contact, and so on. At step 330, a human analyst reviews the information that was automatically collected in step 320, and places a telephone call to the corporate contact to confirm registration. The analyst then enters his or her identification and approval code to registration program 152, and, at step 340. the organization is registered. Fig. 4 depicts the registration process for an individual. At step 410, the automated auction system receives a completed individual registration form from an individual. The form includes descriptive information about the user, the organization with which the user is connected, and identifies which activities the user wishes to perform, such as bidding and/or selling, by type of item. The form also includes items of interest to the individual, referred to as interest criteria, so that the automated auction system can notify the user of items of interest. In some embodiments, the maximum bid and maximum total of all bids is part of the registration information; in these cases, the automated auction system will not accept bids beyond such amounts from the user.

At step 420, registration program 152 prepares a message to the corporate contact of the organization in the individual's registration information, requesting approval for the individual to perform the identified activities. The automated auction system requires each organization to guarantee the activity of registered individuals connected therewith, to minimize rogue activity by individuals. The message may be in the form of one or more of electronic mail, a facsimile transmission, paper mail, a voice-synthesized telephone message, or other appropriate format as will be known to one of ordinary skill in the art. Each registered organization and individual is legally bound by a master confidentiality agreement relating to confidential information obtained through the system, such as information relating to the characteristics of a posted item. The master confidentiality agreement is presented to each user during registration and the user must take an affirmative action, such as clicking on an AGREE button displayed on the user's terminal, to assent to the master confidentiality agreement. Existence of the master confidentiality agreement eliminates the need to establish confidentiality on a per- transaction basis, thereby reducing the time taken to sell an item on the automated auction system relative to conventional selling procedures.

At step 430, registration program 152 receives approval from the corporate contact for the proposed individual registration. The approval may be in the form of a returned electronic mail message with an authorization code, a facsimile or paper mail transmission indicating approval, or a telephone based approval, such as a voice recording or entry of an authorization code using the keypad of a telephone.

At step 440, registration program 152 updates the appropriate organization registration to reflect that there is a new authorized registered individual connected with the organization.

At step 450, registration program 152 notifies the corporate contact that there is a new authorized registered individual connected with the organization. Preferably, the notice method employed at step 450 is different than that employed at step 420, to improve the likelihood of detecting fraudulent authorization attempts. In some embodiments, registration program 152 waits for a predetermined amount of time before enabling the individual registration, to give the corporate contact time to object to the requested authorization.

At step 460, registration program 152 downloads applet 124 to the newly registered individual. Applet 124 enables terminal 120 to receive streamed market data, that is, market data sent to terminal 120 when the market data meets criteria pre-established by the individual, as opposed to being specifically requested by the user.

At step 470, the individual registration is complete.

Fig. 5 is a flowchart showing a process for posting an item for auction. Auction market program 154 of Fig. 1 performs the processing depicted in Fig. 5 in response to a posting request from an individual initiated via page 265 shown in Fig. 2.

At step 505, auction market program 154 receives the posting request. The posting request may indicate whether the seller wishes to use the bidder's default market, discussed below with respect to Fig. 8. In some embodiments, use of the bidder^'s default market is mandatory for all sales. As will be appreciated, using the bidder's default market is a way of having the automated auction system automatically arrange for the item to be insured against a risk of default by a winning bidder. The posting request indicates, inter alia, the duration of the auction, in days, hours and minutes, or the ending time of the auction by date and time. Short auctions may be for, e.g., 0 days, 0 hours and 15 minutes. Long auctions may be for, e.g., 10 days, 12 hours and 5 minutes.

At step 510, auction market program 154 checks whether the individual is authorized to post the item or items identified in the posting request. Specifically, auction market program 154 is adapted to receive information describing one item to be posted for auction, or describing a portfolio of items to be posted for auction. If the posting is for a portfolio of items, then the individual must be authorized by its connected organization to post each of the types of items in the portfolio. If the individual is not appropriately authorized, then the posting is refused. If the individual is authorized to post the items identified in his or her posting request, then at step 520, auction market program 154 stores descriptive information for the item(s), and terms and conditions of the auction, such as its length and the auction method to be used.

At step 530, auction market program 154 stores downloadable documents supplied by the individual. For certain items, such as bank debt or trade debt, it is customary for the seller to prepare a set of due diligence documents, that are distributed to prospective buyers by the broker-dealer representing the seller, who may thereby remain anonymous. The conventional document distribution process adds several days to the transaction time. Auction market system 150 eliminates the document distribution time by allowing prospective bidders to download documents from auction market system 150. Individuals who download the documents pertaining to an auction have confidentiality obligations under the above-described master confidentiality agreement relating to the documents which survive the termination of the auction.

At step 540, auction market program 154 stores the terms and conditions pertaining to settlement for the item. The automated auction system enables an individual to select settlement terms from among a set of predefined settlement terms. Such selection of settlement terms eliminates the need for negotiating and documenting the sale of the item by the seller to the buyer. Sample sets of predefined settlement terms are as follows, with "T" indicating the trade date, that is, the date on which the auction ends, and the numeral indicating a number of days:

(SET 1 ) Settlement on T + 1 , straight settlement (SET 2) Settlement on T + 3, straight settlement

(SET 3) Settlement on T + 10. straight settlement

(SET 4) Settlement on T + 3, net settlement

Straight settlement indicates that this item must be settled individually. Net settlement indicates that payment for this trade may be netted with other trades. Other arrangements will be appropriate for other items. Conventionally, title documents and payment are exchanged on the same date, but the present auction system is not limited to this, and supports settlement arrangements wherein the title documents and payment are exchanged on different dates.

Although the examples shown above for settlement terms relate to temporal duration, it will be appreciated that settlement terms may include other characteristics, such as settlement currency (dollars, euros, yen and so on).

At step 550, auction market program 154 determines if consent to a sale associated with an auction posting for the item is required from a third party having a legal right to consent to the sale based on the information received at step 505, such as an agent bank, and whether the third party is registered w ith the automated auction market system based on a list of registered third parties stored on storage 160 of Fig. 1. If no consent is required, auction market program 154 proceeds to step 560.

If consent is required, auction market program 154 proceeds to step 555. In an embodiment, when the third party is registered with the system, it may register in one of three ways:

• The third party may register as consenting in advance to any sale resulting from a posting on the system. Effectively, the third party is deciding that any bidder sufficiently qualified to be using the automated auction system is acceptable as a buyer. This is referred to as full automatic consent. • The third party may register as consenting in advance to a first set of specified bidders and/or withholding consent in advance to a second set of specified bidders, and requiring an opportunity to consent to all other bidders after an auction is completed. Consenting in advance to the first set of specified bidders is referred to as partial automatic consent. Denying consent in advance to the second set of bidders is referred to as partial automatic denial of consent. • The third party may register as not consenting in advance to anyone, that is, requiring an opportunity to consent to any bidder after an auction is completed.

Partial automatic denial of consent may operate so that, when a member of the set of bidders for whom consent was denied, referred to as a denied bidder, tries to place a bid for an item, the automated auction system refuses to accept the bid, and instead provides a message stating that consent to a sale to this bidder has been denied in advance. Alternatively, partial automatic denial may operate so that a denied bidder is not able to view detailed information about open auctions for which consent has been denied in advance to that bidder.

In another embodiment, the third party may not be a participant in the system. In this case, the auction posting is treated as if the third party requires an opportunity to consent to any bidder after the auction is completed.

Accordingly, at step 555, auction market program 154 determines whether there is full or partial automatic consent for any sale associated with the proposed posting from information stored on storage 160.

At step 560, auction market program 154 displays the proposed posting to the individual. Fig. 9 is an example of auction posting page 900. Areas outlined with a solid line can be clicked on by the user to activate hyperlinks or application programs. Areas outlined with a dashed line represent descriptive information supplied by auction market system 150.

Home button 910 of Fig. 9 is a hyperlink to homepage 200 of Fig. 2. Search button 912 of Fig. 9 is a hyperlink to search page 261 of Fig. 2.

Research button 914 of Fig. 9 is a hyperlink to research page 263 of Fig. 2. Registration button 916 of Fig. 9 is a hyperlink to registration page 250 of Fig. 2. Activity button 918 of Fig. 9 is a hyperlink to activity page 267 of Fig. 2. Help button 920 of Fig. 9 is a hyperlink to help page 240 of Fig. 2. Descriptive area 930 of Fig. 9 provides information regarding the posted item, such as the auction title, the quantity being sold, the type of the item, the specific description of the item, the item's maturity date and collateral, if any. Descriptive area 932 provides information relating to whether third party consent to the sale is required, and if so, whether such consent has been fully or partially granted in advance.

Descriptive area 934 provides information relating to settlement terms, as selected by the seller.

Descriptive area 940 provides information relating to the duration of the auction, such as its start date and time, end date and time, and amount of time remaining.

Descriptive area 950 provides information relating to bids, such as the minimum bid. if no bids have yet been received, or the current high bid, if at least one bid has been received, and whether the reserve price, if any, has been met. Additionally, the registered name of the current high bidder may be displayed, along with the number of bids made so far, and the number of times the downloadable documents, if any, have been downloaded.

Document description button 970 is a hyperlink to a description of the documents provided in the set of downloadable documents available through button 972. Download documents button 972 downloads the documents stored on auction market system 150 to the user.

Document advisor button 974 is a hyperlink to a web page of a party who has agreed to provide information to users relating to the legal meaning of or the perceived or real economic value of the documents available through button 972. In some embodiments, advisor button 974 is a hyperlink to a web page of auction market system 150 providing the e-mail address and/or telephone number of the document advisor. Auction market system 150 may automatically set up an e-mail template to the document advisor, filling in the e- mail address of the user, the auction title as the subject of the e-mail message, and a checklist of the documents which can be edited by the user. Bid history button 952 is a hyperlink to a page containing the bids submitted in the open auction. In some embodiments, bid history button 952 allows a user to activate a small window, shown in Fig. 10, containing a current bid list, with the window being automatically refreshed when a new bid is submitted and/or after a predetermined time interval. Fig. 10 shows user terminal 120 having main browser window 1000 and bid history window 1010. Bid item description 1020 is generated by browser 122 based on meta-tags associated with the page displayed in main browser window 1000. Bid history window 1010 includes item description section 1012 and bid listing section 1015. Bid listing section 1015 shows the amount of each bid and the time the bid was placed. The instant user's bid is indicated in bid listing section 1015.

Bid button 954 is a hyperlink to a page enabling the user to submit a bid in the open auction.

Other specific arrangements of auction posting page 900 will be apparent to those of ordinary skill. In some embodiments, data is automatically updated on page 900 as the data changes, for example, the high bid or the time remaining in the auction.

At step 570, auction market program 154 determines whether the individual has approved the proposed posting, such as by clicking on a "SUBMIT" area of a page, or by returning an authorization electronic mail. If not, then processing returns to step 520 so that the individual can make changes as appropriate. If the individual has approved, then at step 580, auction market program 154 configures central system 150 with the new posting as available for auction. At this point, the new posting can be viewed by unregistered users, and bid on by appropriately registered users. In some embodiments, the posting approved by the user may experience a holding period before becoming a live auction.

In another embodiment, reverse auction postings are accepted by auction market program 154, wherein a user commits to selling one or more items meeting a buyer's posting criteria. In another embodiment, an electronic bulletin board is provided wherein registered individuals can post items they are interested in buying, to stimulate auction postings from registered individuals possessing such items and wishing to sell them.

Fig. 6 is a flowchart showing an auction process.

At step 605, a new item posting becomes available through the process shown in Fig. 5. At step 610, auction market program 154 checks the interest criteria of registered users, and, if the new item posting meets their criteria, notifies them, such as by an electronic mail message to their registered electronic mail address.

At step 615, a user requests information about the posted item, such as by entering the item identifier directly into search page 261 of Fig. 2, as may occur when the user has previously viewed the item or has been notified of the item via electronic mail, or by clicking on the item when its identifier and a short description is returned to the user as a response to a search-by-parameter request made through search page 261. At step 620, auction market program 154 replies to the user with the requested information, namely, details of the posted item.

The page containing details of the posted item contains an area labelled "SEND ANONYMOUS E-MAIL". At step 625, the user may click on the labelled area to indicate that he or she wishes to send anonymous electronic mail (e-mail) to the seller of the posted item. If so, at step 627, auction market program 154 checks that the user is registered, and if so, returns an e-mail template to the user. At step 630, auction market program 154 receives the completed e-mail template, referred to hereafter as a message. At step 635, auction market program 154 strips the user's identifying information from the message to create an anonymous inquiry. At step 640, auction market program 154 for ards the anonymous inquiry to the seller.

Presuming that the seller replies, a similar anonymous forwarding occurs with the seller's reply. At step 645, auction market program 154 receives the reply from the seller to the user, also referred to as a bidder. At step 650, auction market program 154 strips the seller's identifying information from the reply to create an anonymous message. At step 655, auction market program 154 forwards the anonymous message to the bidder.

Anonymous electronic mail forwarding facilitates the fact-finding that presently occurs with heavily negotiated items. Since this occurs anonymously, market liquidity is improved, as buyers are more likely to inquire when their identity is not known. Because the automated auction system forwards electronic mail only from registered users, sellers know that a qualified part is inquiring and are more apt to reply than if any user, including unregistered users, were able to send electronic mail to the seller.

In another embodiment, instead of the two-way anonymous e-mail described with respect to steps 630-655 of Fig. 6, one-way anonymous e-mail is provided. In this case, the bidder's registered system name is disclosed to the seller, but the seller's registered system name is withheld from the bidder. Processing is generally as described above, except steps 635 and 640 are replaced by step 632 (not shown) in which the system forwards the bidder's message to the seller via electronic mail. Additionally, the bidder will know that his or her registered system name is disclosed to the seller. At step 660, the user places a bid, typically through page 262 of Fig. 2. Bids are typically in a percentage of par value rather than in absolute currency units. Auction market program 154 checks that the user is authorized to place the bid, and if so, appropriately stores the bid on disk 160 and reports the bid to market data program 156.

At step 665, auction market program 154 checks whether the new bid results in a prior bidder being outbid, and if so, notifies the prior bidder by sending an electronic mail message if the bidder specified that he or she wished to receive such notification.

At step 670, auction market program 154 checks whether the end of auction condition has been met, typically, a predetermined time interval has elapsed, or no bids have been received in a predetermined interval, and so on. If not, then processing returns to step 610, so that bidders interested only in popular auctions, that is, auctions having at least a certain number of bids, can be notified if appropriate.

If, at step 670, an end of auction condition is detected by auction market program 154, then at step 675, auction market program 675 updates the item posting to indicate that the auction is completed and the item is unavailable for auction. The final price and the system name of the registered individual may be retrieved by a search of closed auctions. Completion of an auction forms a binding agreement between the seller and winning bidder, if any. In one embodiment, when an auction is completed, a user may no longer send anonymous electronic mail to the seller. In another embodiment, even when an auction is completed, a user may send anonymous electronic mail to the seller.

Fig. 7 is a flowchart showing post-auction processing. At step 710, completion of an auction occurs, as depicted in Fig. 6. If there is a winning bidder, that is, the auction reserve and/or minimum price, if any, have been met, then auction market program 154 reports a closed sale to market data program 156. If there is a winning bidder and consent to the sale is not required from a third party, auction market program 154 proceeds to step 735. At step 715, auction market program 154 determines whether any full or partial advance consent was provided for this auction. If full consent to any sale associated with the posting was provided in advance, then auction market program 154 proceeds to step 730. If partial consent was provided, and the winning bidder is one of the set of automatically consented-to bidders, then auction market program 154 proceeds to step 730. If the winning bidder is one of the set of bidders for which consent is automatically denied, then auction market program 154 informs the seller. If the seller convinces the third party to consent, the seller notifies the system and processing proceeds to step 740. Otherwise, the seller may re-post the item for auction, and is responsible for notifying the winning bidder that the seller is unable to complete the sale.

If consent is required and automatic consent to the sale has not been obtained, then auction market program 154 proceeds to step 720. At step 720, auction market program 154 automatically requests consent to the sale from the third party

At steps 730, 735 and 740, auction market program 154 notifies the third party, seller and winning bidder, respectively, of the completion of the auction. The winning bidder is also referred to as the buyer. The notifications may include fees for the auction, such as posting fees and completion fees. In one embodiment, auction market program 154 also notifies the seller that the winning bidder has been contacted, alleviating the need for the seller to contact the buyer. In other embodiments, such as where the seller must provide additional information for payment or settlement to the buyer, then the seller must contact the buyer. The notices include appropriate identifying information for the buyer and seller.

At step 745, auction market program 154 receives notice from the seller that the auction has cleared, that is. the seller has transferred title to the buyer and received payment from the buyer. Accordingly, auction market program 154 reports a cleared sale to market data program 156. If auction market program 154 has not received notice of clearance from the seller by the time specified in the clearance terms selected when the item was posted, then auction market program 154 sends a query message to the seller, requesting notice that clearance completed or that the winning bidder defaulted.

Fig. 8 is a flowchart showing use of the bidder^'s default market. In one embodiment, when an item is posted, the seller indicates whether or not they wish to have the item transferred to the bidder's default market if a winning bidder defaults on his or her bid. The posting fee may include a first amount if the item is indicated as ineligible for the bidder's default market, and a second amount if the item is indicated as eligible for the bidder's default market. In another embodiment, the winning bidder may transfer the item to the bidder's default market upon payment of a fee. In another embodiment, all auction postings are transferred to the bidder's default market if the winning bidder defaults.

An organization meeting certain financial criteria may register as a participant in the bidder's default market. Registration may be by type of item, or by value of item, or by a combination of parameters. Hereafter, the term "participant" in the bidder^'s default market is used interchangeably with "insurer" since a participant is typically an insurance company. At step 810, bidder's default market program 158 receives notice from the seller that the winning bidder defaulted.

At step 820, bidder^'s default market program 158 confirms the default by the winning bidder, such as by sending an electronic mail message to the winning bidder, with a copy to the corporate contact, requiring a specified response to indicate that the winning bidder believes it has not defaulted. If the specified response is not received within a predetermined time, then bidder^'s default market program concludes that the winning bidder has defaulted. In some embodiments, the organization with which the winning bidder is connected substitutes the corporate contact as the winning bidder, to ensure that the organization never defaults. In some embodiments, when an individual defaults, that individual is prohibited from further use of the automated auction market. In other embodiments, after an individual defaults, subsequent bids by that individual are marked as being from a defaulting bidder, and may be refused by a seller.

At step 830, bidder's default market program 158 may notify any third party having a legal right in the item, such as an agent bank, that a default has occurred, and transfers the item to a "closed" category, as indicated in third party activity page 272 of Fig. 2.

At step 840, bidder's default market program 158 transfers the item to the bidder's default market. In one embodiment, bidder's default market program 158 operates the bidder's default market by selecting appropriate bidder's default market insurers, in round robin fashion, that is, a least recently used type of selection, to assume the rights and responsibilities of the winning bidder. In another embodiment, bidder's default market program 158 offers the item to the next-to-highest bidder prior to offering the item to the registered bidder's default market insurers. In another embodiment, bidder^'s default market program 158 selects the sole bidder's default market insurer for this type of item to replace the winning bidder. For example, one insurer may be allocated North American defaults, while another insurer is allocated Asian defaults. In yet another embodiment, the selected bidder's default market insurer may re-auction the item rather than directly replacing the defaulting bidder. In all embodiments, at the conclusion of step 840, there is a substitute buyer for the defaulting bidder. In some embodiments, the selected bidder's default market insurer has a choice of substituting for the defaulting bidder or forcing a re-auction of the item. If the insurer chooses to force a re-auction, then the insurer benefits from or is liable for any price difference between the first (original) auction and second (re-auction) auction.

At step 850, bidder^'s default market program 158 notifies the seller of the identity of the bidder's default market insurer selected as the buyer. At step 860, bidder^'s default market program 158 notifies any third party having a legal right in the item of the identity of the bidder's default market insurer selected as the buyer.

The above-described bidder's default market functions as a form of seller's insurance. In some embodiments, bidder's insurance is also available, either optionally or provided to all bidders. In these embodiments, the automated auction system automatically arranges for the winning bid to be insured against certain predefined risks. Risks covered by bidder's insurance may include one or more of the following situations:

• After a seller defaults, the insurer buys a cover item for the winning bidder and provides the cover item to the winning bidder for the amount of the winning bidder's winning bid;

• After a seller defaults, the insurer determines the market price for the item and, if the market price is less than the winning bid, the insurer pays the difference to the winning bidder;

• After a seller defaults, the winning bidder buys a cover item and, if the price of the cover item is more than the amount of the winning bid, the insurer pays the difference to the winning bidder;

• After a seller defaults, if the buyer has already paid for the item, the insurer compensates the buyer for its payment; and

• If the seller misrepresented the item, the insurer buys the item from the winning bidder for the amount of the winning bid.

Items that may be advantageously posted on the automated auction system will now be discussed.

"Bank debt" refers to loans made by commercial and investment banks to corporate clients. The syndicated loan market is not regulated by the Securities and Exchange Commission (SEC) or Commodity Futures Trading Commission (CFTC). During the 1990's, a secondary debt market trading these bank debt obligations has emerged. Companies that owe money are referred to as "issuers" of debt, while syndicators of debt are referred to as "agent banks." The agent banks typically retain the right to approve any subsequent transfer of debt they originated, that is, they must consent to a transfer of the item. In late 1999, Standard & Poor's and the Loan Syndication and Trading Association plan to unveil an index to measure the value of syndicated loans in the secondary market. Presently, about 100-200 large banks and funds form the secondary market for North

American syndicated loans. Each of these institutions has a syndicated loans trading desk staffed by specialized analysts, and employs specialized lawyers to prepare appropriate documents. When an analyst becomes aware of the availability of bank debt, he or she identifies and contacts, by telephone, potential buyers of the bank debt over an interval typically lasting one week. When at least one potential buyer is identified, the price of the bank debt is negotiated, and due diligence is conducted, in an interval typically lasting two weeks. Assuming all goes well, transfer documents are prepared and reviewed in an interval lasting approximately one week. When preparations are complete, consent is obtained from the agent bank in a process lasting about one week. Finally, closing, that is transfer of funds and title documents, occurs over an interval lasting a few days. As described, this process takes about 5-6 weeks. However, this process frequently is delayed and takes about 12 weeks.

Problems are rife in the secondary loan market. Banks may be unaware of the availability of the secondary market until they receive an offer from one of the institutions participating in the market. This offer is usually priced disadvantageously to the bank. Market data is not centrally collected, so it is difficult for the bank to evaluate the offered price. Due to the expense of operating and staffing a secondary loan trading desk, many smaller institutions are deterred from participating in the secondary loan market even if they have adequate capital and trading capacity. Some smaller institutions are deterred simply by feeling like a little player who will lose trying to compete with the "heavyweight" players. Fewer market participants reduces competition and reduces liquidity. Generally, transaction costs are high in this market, relative to other secondary markets. Many of the functions of the loan trading desk are directed to acting as a "middleman" in the transaction, thereby increasing costs. The need for lawyers on each transaction increases costs and delays. Generally the trading process takes a long time. Sometimes the issuer's circumstances materially change during the course of the trading process, but the sellers tend to conceal these changes so as not to sour the transaction. The need to obtain the agent bank's consent prolongs the trading process. Negotiating the terms and conditions of each transaction prolongs the trading process. Since the secondary syndicated loan market is unregulated, clearance is occasionally held up by unusual circumstances.

Use of the present invention removes or alleviates many of these problems. A central marketplace with readily available market data improves the so-called transparency of the market. The automated auction system of the present invention dramatically reduces the cost of operating and staffing a loan trading desk, and acts to "level the playing field" for smaller institutions, thereby improving their chances of participating, which in turn adds competition and liquidity to the market. Selecting from among standard terms and conditions for closing, at the time of posting, eliminates the negotiation and need for lawyers. Pre-arranging consent from agent banks reduces closing time. Since the closing time is dramatically reduced, exposure to changing circumstances is also reduced. In short, price improvement and risk reduction result from employing the present invention.

The qualification process employed when registering users and availability of a bidder's default market imbues the automated auction market with trust from sellers, who are thereby encouraged to use the automated auction market. Anonymity enables all sellers to post items for sale with the same "status" as large institutions.

The automated auction system may be employed in the primary market for bank debt. Conventionally, issuing bank debt involves negotiating and executing the following documents:

• an Offering Memorandum, created by the agent bank, similar to a prospectus;

• a draft loan agreement, created by the agent bank, promising to give money to the borrower;

• a security agreement, created by the borrower, pledging collateral in the event of a default by the borrower;

• a note, created by the borrower, promising to make certain payments; and

• a financing statement, created by the borrower, summarizing the collateral described in the security agreement and being filed with the Secretary of State pursuant to Article 9 of the Uniform Commercial Code, and with appropriate other authorities.

In the conventional process, each of these documents is negotiated by teams of lawyers, which incurs substantial expense and delay. With the automated auction system, each of these documents is electronically created by selecting from a menu of clauses covering the majority of situations encountered, avoiding the need for protracted, expensive negotiation. The due diligence process is similarly made faster and cheaper by use of a menu of terms. The documents may be created by either the agent bank or the borrower, depending on which of these parties is posting the debt on the automated auction market system.

"Trade debt" refers to an obligation created when a company extends credit to its trading partners, typically corporate customers. Occasionally, a company sells this debt obligation on a secondary market, either to meet an immediate cash need or when the organization that owes the money files for bankruptcy or shows some other obvious sign of weakness. The secondary market for trade debt has been growing at an annual compounded rate of about 25%. Much of the secondary market is distressed trade debt, obligations not likely to be timely paid. Like bank debt, it is sold at a discount, depending on the level of risk involved.

Presently, the secondary market for trade debt is similar to that for bank debt. The trading process is also similar, except that consent of an agent bank to the sale is not required. Problems in the secondary market for trade debt are similar to that for bank debt; in particular, companies holding trade debt are sometimes completely unaware that their trade debt, even if distressed, is marketable.

In the secondary market for trade debt, availability of the automated auction system makes debt holders aware of the ease of selling their asset.

The automated auction system may be employed in the primary market for trade debt, known as factoring or secured lending. The negotiations and documenting described above for the primary market for bank debt is, for the most part, applicable here, too.

An "emerging markets debt instrument" refers to debt of emerging economies that are usually characterized as having substantially underdeveloped economies and infrastructures. Emerging market debt instruments include loans issued by banks to institutions, which may include sovereign bank loans, local market debt instruments, and new issue capital markets instruments for sovereign, public sector and corporate borrowers. More information about emerging markets debt instruments is available from the Emerging Markets Trading Association (EMTA), New York, NY, and London, England, and in the

1997 Annual Report of EMTA, the disclosure of which is hereby incorporated by reference. "Distressed commercial real estate" refers to office buildings and/or large or costly land-holdings which are not profitable, generally due to an inconsistency in mortgage rates and rental rates. The market for distressed commercial real estate also is presently unautomated, has only a small number of large institutions participating, and is unregulated. Accordingly, distressed commercial real estate is an appropriate type of item for use with the present system.

Embodiments of the automated auction system may offer at least one of the following advantages:

• Eliminating negotiations and significantly reducing documentation, since settlement terms are selected in advance of trade rather than negotiated during and after a trade. This in turn reduces the need for specialized lawyers, thereby substantially decreasing costs.

• Improving the confidence of participants that individuals will actually perform in accordance with their bids, since users of the auction system are qualified at registration and their identity is verified.

• Faster trading, since negotiation over terms and conditions is eliminated, due diligence is accelerated by maintaining a state of confidentiality through a master confidentiality agreement and by automated document distribution, and the consent process is streamlined. • Improved liquidity, since users can anonymously post items for sale, and anonymously inquire about items for sale, thereby opening the marketplace to many more users.

• Improved confidence of sellers in the market due to the presence of the bidder's default market. Although an illustrative embodiment of the present invention, and various modifications thereof, have been described in detail herein with reference to the accompanying drawings, it is to be understood that the invention is not limited to this precise embodiment and the described modifications, and that various changes and further modifications may be effected therein by one skilled in the art without departing from the scope or spirit of the invention as defined in the appended claims.

Claims

What is claimed is:

1. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, the item being associated at the time of posting with settlement terms selected from a set of predefined settlement terms, sending information about the item to a user for display on the user^'s terminal, receiving a document download request from the user, and downloading a document relating to the item to the user, wherein the item is one of bank debt, trade debt, an emerging markets debt instrument and distressed commercial real estate, the item is associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with, the user has previously registered with the automated auction system and been approved to bid for items by a contact of an organization that the individual is connected with the automated auction system automatically arranges for the posted item to be insured against a risk of default by a winning bidder, and the user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system.

2. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, the item being associated at the time of posting with settlement terms selected from a set of predefined settlement terms, and sending information about the item to a user for display on the user's terminal.

3. The method of claim 2, wherein the type of the item determines its settlement terms.

4. The method of claim 2, further comprising receiving a document download request from the user, and downloading a document relating to the item relating to the item to the user.

5. The method of claim 2. further comprising receiving a message from a seller of the item for the user, removing information identifying the seller from the message to create an anonymous message, and forwarding the anonymous message to the user.

6. The method of claim 2, wherein the item is associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with.

7. The method of claim 1, wherein the user has previously registered with the automated auction system and been approved to bid for items by a contact of an organization that the individual is connected with.

8. The method of claim 2, wherein the item is a bank debt.

9. The method of claim 2, wherein the item is a trade debt.

10. The method of claim 2, wherein the item is an emerging market debt instrument.

1 1. The method of claim 2, wherein the item is distressed commercial real estate.

12. The method of claim 2, wherein consent to a sale associated with the posting was obtained from a third party having a legal right to consent to the sale.

13. The method of claim 2, further comprising receiving a winning bid for the item from the user, confirming that the user has defaulted on the winning bid, and transferring the item to a bidder's default market.

14. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, the item being associated at the time of posting with settlement terms selected from a set of predefined settlement terms, and means for sending information about the item to a user for display on the user^'s terminal.

15. The apparatus of claim 14, wherein the type of the item determines its settlement terms.

16. The apparatus of claim 14, further comprising means for receiving a document download request from the user, and means for downloading a document relating to the item to the user.

17. The apparatus of claim 14, further comprising means for receiving a message from a seller of the item for the user, means for removing information identifying the seller from the message to create an anonymous message, and means for forwarding the anonymous message to the user.

18. The apparatus of claim 14, wherein the item is associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with.

19. The apparatus of claim 14, wherein the user has previously registered with the automated auction system and been approved to bid for items by a contact of an organization that the individual is connected with.

20. The apparatus of claim 14, wherein the item is a bank debt.

21. The apparatus of claim 14, wherein the item is a trade debt.

22. The apparatus of claim 14, wherein the item is an emerging market debt instrument.

23. The apparatus of claim 14, wherein the item is distressed commercial real estate.

24. The apparatus of claim 14, wherein consent to a sale associated with the posting was obtained from a third party having a legal right to consent to the sale.

25. The apparatus of claim 14, further comprising means for receiving a winning bid for the item from the user, means for confirming that the user has defaulted on the winning bid. and means for transferring the item to a bidder^'s default market.

26. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, the item being associated at the time of posting with settlement terms selected from a set of predefined settlement terms, and displaying the information about the item on a user^'s terminal.

27. The method of claim 2, wherein the type of the item determines its settlement terms.

28. The method of claim 26, further comprising: requesting a document download, and receiving the downloaded document, the document relating to the item.

29. The method of claim 26, further comprising receiving a message from a seller of the item for the user, the message lacking information identifying the seller.

30. The method of claim 26. wherein the item is associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with.

31. The method of claim 26, wherein the user is previously registered with the automated auction system and is approved to bid for items by a contact of an organization that the individual is connected with.

32. The method of claim 26. wherein the item is a bank debt.

33. The method of claim 26. wherein the item is a trade debt.

34. The method of claim 26, wherein the item is an emerging market debt instrument.

35. The method of claim 26. wherein the item is distressed commercial real estate.

36. The method of claim 26, wherein consent to a sale associated with the item was obtained from a third party having a legal right to consent to the sale.

37. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, the item being associated at the time of posting with settlement terms selected from a set of predefined settlement terms, and means for displaying the information about the item on a user's terminal.

38. The apparatus of claim 37, wherein the type of the item determines its settlement terms.

38. The apparatus of claim 37, further comprising: means for requesting a document download, and means for receiving the downloaded document, the document relating to the item.

39. The apparatus of claim 37, further comprising means for receiving a message from a seller of the item for the user, the message lacking information identifying the seller.

40. The apparatus of claim 37, wherein the item is associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with.

41. The apparatus of claim 37, wherein the user is previously registered with the automated auction system and is approved to bid for items by a contact of an organization that the individual is connected with.

42. The apparatus of claim 37. wherein the item is a bank debt.

43. The apparatus of claim 37, wherein the item is a trade debt.

44. The apparatus of claim 37, wherein the item is an emerging market debt instrument.

45. The apparatus of claim 37, wherein the item is distressed commercial real estate.

46. The apparatus of claim 37, wherein consent to a sale associated with the item was obtained from a third party having a legal right to consent to the sale.

48. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, sending information about the item to a user for display on the user^'s terminal, receiving a document download request from the user, and downloading a document relating to the item to the user.

49. The method of claim 48, further comprising sending information to the user about how many times the document has previously been downloaded.

50. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, means for sending information about the item to a user for display on the user's terminal, means for receiving a document download request from the user, and means for downloading a document relating to the item to the user.

51. The apparatus of claim 50, further comprising means for sending information to the user about how many times the document has previously been downloaded.

52. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, displaying the information about the item on a user^'s terminal, requesting a document download, and receiving the downloaded document, the document relating to the item.

53. The method of claim 52, further comprising receiving information about how many times the document has previously been downloaded.

54. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, means for displaying the information about the item on a user's terminal, means for requesting a document download, and means for receiving the downloaded document, the document relating to the item.

55. The apparatus of claim 54, further comprising means for receiving information about how many times the document has previously been downloaded.

56. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, sending information about the item to a user for display on the user's terminal, receiving a message from a seller of the item for the user, removing information identifying the seller from the message to create an anonymous message, and forwarding the anonymous message to the user.

57. The method of claim 56, further comprising receiving a message from the user for the seller, removing information identifying the user from the message to create an anonymous inquiry, and forwarding the anonymous inquiry to the seller.

58. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, means for sending information about the item to a user for display on the user's terminal, means for receiving a message from a seller of the item for the user, means for removing information identifying the seller from the message to create an anonymous message, and means for forwarding the anonymous message to the user.

59. The apparatus of claim 58, further comprising means for receiving a message from the user for the seller, means for removing information identifying the user from the message to create an anonymous inquiry, and means for forwarding the anonymous inquiry to the seller.

60. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, displaying the information about the item on a user^'s terminal, and receiving a message from a seller of the item for the user, the message lacking information identifying the seller.

61. The method of claim 60, further comprising receiving a message from the user for forwarding to the seller along with an indication from the user that the message is to be forwarded to the seller without information identifying the user.

62. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, means for displaying the information about the item on a user^'s terminal, and means for receiving a message from a seller of the item for the user, the message lacking information identifying the seller.

63. The apparatus of claim 62, further comprising means for receiving a message from the user for forwarding to the seller along with an indication from the user that the message is to be forwarded to the seller without information identifying the user.

64. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, the item being associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with, and sending information about the item to a user for display on the user's terminal.

65. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, the item being associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with, and means for sending information about the item to a user for display on the user's terminal.

66. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, the item being associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with, and displaying the information about the item on a user's terminal.

67. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, the item being associated at the time of posting with an individual previously registered with the automated auction system, the individual being approved to post items by a contact of an organization that the individual is connected with, and means for displaying the information about the item on a user's terminal.

68. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal, the user being previously registered with the automated auction system and being approved to bid for items by a contact of an organization that the individual is connected with.

69. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, and means for sending information about the item to a user for display on the user's terminal, the user being previously registered with the automated auction system and being approved to bid for items by a contact of an organization that the individual is connected with.

70. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, and displaying the information about the item on a user^'s terminal, the user being previously registered with the automated auction system and being approved to bid for items by a contact of an organization that the individual is connected with.

71. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, and means for displaying the information about the item on a user's terminal, the user being previously registered with the automated auction system and being approved to bid for items by a contact of an organization that the individual is connected with.

72. A method of auctioning bank debt, comprising: posting the bank debt as available for bids on an automated auction system, and sending information about the bank debt to a user for display on the user's terminal.

73. A method of auctioning trade debt, comprising: posting the trade debt as available for bids on an automated auction system, and sending information about the trade debt to a user for display on the user's terminal.

74. A method of auctioning an emerging market debt instrument, comprising: posting the emerging market debt instrument as available for bids on an automated auction system, and sending information about the emerging market debt instrument to a user for display on the user^'s terminal.

75. A method of auctioning distressed commercial real estate, comprising: posting the distressed commercial real estate as available for bids on an automated auction system, and sending information about the distressed commercial real estate to a user for display on the user's terminal.

76. An apparatus for auctioning bank debt, comprising: means for posting the bank debt as available for bids on an automated auction system, and means for sending information about the bank debt to a user for display on the user^'s terminal.

77. An apparatus for auctioning trade debt, comprising: means for posting the trade debt as available for bids on an automated auction system, and means for sending information about the trade debt to a user for display on the user's terminal.

78. An apparatus for auctioning an emerging market debt instrument, comprising: means for posting the emerging market debt instrument as available for bids on an automated auction system, and means for sending information about the emerging market debt instrument to a user for display on the user^'s terminal.

79. An apparatus for auctioning distressed commercial real estate, comprising: means for posting the distressed commercial real estate as available for bids on an automated auction system, and means for sending information about the distressed commercial real estate to a user for display on the user^'s terminal.

80. A method of auctioning bank debt, comprising: requesting information about bank debt available for bids on an automated auction system, and displaying the information about the bank debt on a user's terminal.

81. A method of auctioning trade debt, comprising: requesting information about trade debt available for bids on an automated auction system, and displaying information about the trade debt on a user^'s terminal.

82. A method of auctioning an emerging market debt instrument, comprising: requesting information about emerging market debt instrument available for bids on an automated auction system, and displaying the information about the emerging market debt instrument on a user's terminal.

83. A method of auctioning distressed commercial real estate, comprising: requesting information about distressed commercial real estate available for bids on an automated auction system, and displaying the information about the distressed commercial real estate on a user's terminal.

84. An apparatus for auctioning bank debt, comprising: means for requesting information about bank debt available for bids on an automated auction system, and means for displaying the information about the bank debt on a user^'s terminal.

85. An apparatus for auctioning trade debt, comprising: means for requesting information about trade debt available for bids on an automated auction system, and means for displaying information about the trade debt on a user^'s terminal.

86. An apparatus for auctioning an emerging market debt instrument, comprising: means for requesting information about the emerging market debt instrument available for bids on an automated auction system, and means for displaying the information about the emerging market debt instrument on a user's terminal.

87. An apparatus for auctioning distressed commercial real estate, comprising: means for requesting information about distressed commercial real estate available for bids on an automated auction system, and means for displaying the information about the distressed commercial real estate on a user^'s terminal.

88. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, consent to a sale associated with the posting having been obtained from a third party having a legal right to consent to the sale, and sending information about the item to a user for display on the user's terminal.

89. The method of claim 88, wherein the item is bank debt.

90. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, consent to a sale associated with the posting having been obtained from a third party having a legal right to consent to the sale, and means for sending information about the item to a user for display on the user's terminal.

91. The apparatus of claim 90, wherein the item is bank debt.

92. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, consent to a sale associated with the item having been obtained from a third party having a legal right to consent to the sale, and displaying information about the item on a user's terminal.

93. The method of claim 92, wherein the item is bank debt..

94. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, consent to a sale associated with the item having been obtained from a third party having a legal right to consent to the sale, and means for displaying information about the item on a user^'s terminal.

95. The apparatus of claim 94, wherein the item is bank debt..

96. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, sending information about the item to a user for display on the user^'s terminal, receiving a winning bid for the item from the user, confirming that the user has defaulted on the winning bid, and transferring the item to a bidder's default market.

97. The method of claim 96, wherein the bidder^'s default market has only one participant for receiving the item.

98. The method of claim 96, wherein a participant in the bidder^'s default market forces a re-auction and benefits from or is liable for any price difference between the auction and the re-auction.

99. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, means for sending information about the item to a user for display on the user's terminal, means for receiving a winning bid for the item from the user, means for confirming that the user has defaulted on the winning bid, and means for transferring the item to a bidder's default market.

100. The apparatus of claim 99, wherein the bidder's default market has only one participant for receiving the item.

101. The apparatus of claim 99, wherein a participant in the bidder^'s default market forces a re-auction and benefits from or is liable for any price difference between the auction and the re-auction.

102. A method of auctioning an item, comprising: receiving information about an item which has been auctioned on an automated auction system to a winning bidder who has defaulted, and sending an instruction to the automated auction system to re-auction the item.

103. An apparatus for auctioning an item, comprising: means for receiving information about an item which has been auctioned on an automated auction system to a winning bidder who has defaulted, and means for sending an instruction to the automated auction system to re-auction the item.

104. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user^'s terminal, wherein the automated auction system automatically arranges for the posted item to be insured against a risk of default by a winning bidder.

105. The method of claim 104, further comprising receiving a winning bid for the item from the user, and wherein the automated auction system automatically arranges for the winning bid to be insured against a predefined risk.

106. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, and means for sending information about the item to a user for display on the user's terminal, wherein the automated auction system automatically arranges for the posted item to be insured against a risk of default by a winning bidder.

107. The apparatus of claim 106. further comprising means for receiving a winning bid for the item from the user, and wherein the automated auction system automatically arranges for the winning bid to be insured against a predefined risk.

108. A method of auctioning an item, comprising: requesting information about an item as available for bids on an automated auction system, and displaying information about the item on a user^'s terminal, wherein the item has been automatically insured against a risk of default by a winning bidder by the automated auction system.

109. The method of claim 108, further comprising placing a winning bid for the item from the user's terminal, and wherein the winning bid has been automatically insured against a predefined risk by the automated auction system.

1 10. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, and a user's terminal for displaying information about the item, wherein the item has been automatically insured against a risk of default by a winning bidder by the automated auction system.

1 1 1. The method of claim 1 10, wherein the user's terminal is also for placing a winning bid for the item, the winning bid being automatically insured against a predefined risk by the automated auction system.

1 12. A method of auctioning an item, comprising: posting the item as available for bids on an automated auction system, and sending information about the item to a user for display on the user's terminal, wherein the user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system.

1 13. The method of claim 1 12, wherein the automated auction system has a plurality of users and each of the plurality of users agreed to the same master confidentiality agreement while respectively registering to use the automated auction system.

1 14. An apparatus for auctioning an item, comprising: means for posting the item as available for bids on an automated auction system, and means for sending information about the item to a user for display on the user^'s terminal, wherein the user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system.

1 15. The apparatus of claim 1 14, wherein the automated auction system has a plurality of users and each of the plurality of users agreed to the same master confidentiality agreement while respectively registering to use the automated auction system.

1 16. A method of auctioning an item, comprising: requesting information about an item available for bids on an automated auction system, and displaying information about the item on a user's terminal, wherein the user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system.

1 17. The method of claim 1 16, wherein the automated auction system has a plurality of users and each of the plurality of users agreed to the same master confidentiality agreement while respectively registering to use the automated auction system.

1 1 8. An apparatus for auctioning an item, comprising: means for requesting information about an item available for bids on an automated auction system, and a user's terminal for displaying information about the item, wherein the user agreed to a master confidentiality agreement of the automated auction system while registering to use the automated auction system.

1 19. The apparatus of claim 1 18, wherein the automated auction system has a plurality of users and each of the plurality of users agreed to the same master confidentiality agreement while respectively registering to use the automated auction system.

120. A method of collecting market data about auctions, comprising: collecting data about an auctioned item when its auction closes as closed market data; and storing the closed market data.

121 . The method of claim 120, further comprising collecting data about the item when it clears as cleared market data; and storing the cleared market data.

122. The method of claim 120, wherein the item is a bank debt.

123. The method of claim 120, wherein the item is a trade debt.

124. The method of claim 120. wherein the item is an emerging market debt instrument.

125. The method of claim 120. wherein the item is distressed commercial real estate.

126. An apparatus for collecting market data about auctions, comprising: means for collecting data about an auctioned item when its auction closes as closed market data; and means for storing the closed market data.

127. The apparatus of claim 126, further comprising means for collecting data about the item when it clears as cleared market data; and means for storing the cleared market data.

128. The apparatus of claim 126, wherein the item is a bank debt.

129. The apparatus of claim 126, wherein the item is a trade debt.

130. The apparatus of claim 126, wherein the item is an emerging market debt instrument.

131. The apparatus of claim 126. wherein the item is distressed commercial real estate.

132. A method of receiving market data about auctions, comprising: receiving data about an auctioned item when its auction closes as closed market data; and storing the closed market data.

133. The method of claim 132, further comprising receiving data about the item when it clears as cleared market data; and storing the cleared market data.

134. The method of claim 132, wherein the item is a bank debt.

135. The method of claim 132. wherein the item is a trade debt.

136. The method of claim 132, wherein the item is an emerging market debt instrument.

137. The method of claim 132, wherein the item is distressed commercial real estate.

138. An apparatus for receiving market data about auctions, comprising: means for receiving data about an auctioned item when its auction closes as closed market data; and means for storing the closed market data.

139. The apparatus of claim 138, further comprising means for receiving data about the item when it clears as cleared market data; and means for storing the cleared market data.

140. The apparatus of claim 138, wherein the item is a bank debt.

141. The apparatus of claim 138, wherein the item is a trade debt.

142. The apparatus of claim 138, wherein the item is an emerging market debt instrument.

143. The apparatus of claim 138, wherein the item is distressed commercial real estate.