CA2634085A1 - Systems and methods for processing transactions relating to securities associated with multiple currencies - Google Patents

Abstract

A system for processing trades of at least one security priced in a second currency for at least one account configured for a first currency, the system including a processor, and a data store coupled to the processor for storing account data associated with each account, wherein the account data comprises a first cash balance in the first currency, a dummy security code representing the second currency, and a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency;
wherein the processor is configured to receive information about a request for at least one trade of the at least one security to be executed in association with a particular account; and update the account data in that account after completion of each trade by (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

Description

Title: Systems and Methods for Processing Transactions Relating to Securities Associated with Multiple Currencies Technical Field [0001] This invention relates to systems and methods for processing financial transactions, and in particular, to processing transactions relating to securities associated with multiple currencies.

Background [0002] Typical Canadian Registered Savings Plan (RSP) accounts, such as RRSP, RESP, LIRA, RIF and LIF accounts, only permit the account holder to hold cash deposits in Canadian dollars. As a result, RSP account holders making trades involving foreign securities (which are valued in a foreign currency, for example US securities traded in US dollars) must convert the cost of the security or the proceeds from the sale thereof between Canadian dollars and the corresponding foreign currency. This conversion often requires the account holder to pay extra charges to a bank or another financial institution, and may significantly impact any potential profits realized by the account holder when making the trade.

[0003] For example, if a RSP account holder wants to purchase $10,000 USD worth of a US security (e.g. 100 shares in Company A, valued at $100 USD
per share), the required amount of Canadian cash must be first converted to US
dollars, based on the prevailing currency exchange rate between Canadian and US dollars. Banks and other financial institutions typically charge services fees associated with this conversion of between 1% and 2% per trade. Thus, an account holder purchasing $10,000 USD of US securities by converting Canadian dollars into US dollars may pay an extra $100 to $200 simply for the currency conversion when buying the securities.

[0004] Similarly, where the account holder owns US securities (e.g. 100 shares of Company A valued at $100 per share, with a total market value of $10,000 USD) and decides to sell the securities, the resulting proceeds must be converted into Canadian dollars to be held within the RSP account. Thus, the account holder may pay a service fee of between $100 and $200 on the sale of securities.

[0005] These service fees may be particularly disadvantageous where the account holder makes a significant number of trades within a short period of time.
For example, if the account holder buys and sells multiple foreign securities within a given day, the account holder pays service fees for currency conversion for each and every trade of securities, based on the value of each and every trade. This is true even when the net value of the trades made in a particular day results in only a small or even no change in the total value of the holdings of foreign securities (meaning that there is little or no net change in the value of the US dollar securities held by the account holder).

[0006] Where there is no net change in total value of the trades, this is called "wash" trading. For example, if an account holder purchases shares of Company A for $10,000 US dollars, and sells shares of Company B (a different US security) for $10,000 US dollars in the same day, the account holder would pay currency conversion service fees associated with $20,000 US dollars, notwithstanding the fact that the total value of the securities held by the account holder remained constant and the trades "washed" each other out. This can be a significant disincentive to trading in US dollar securities and securities traded in other foreign currencies.

[0007] One obstacle to reducing these service fees is technological. The record-keeping software systems currently in use for managing RSP accounts do not allow account holders to hold foreign currencies within an RSP account.
Accordingly, account holders must keep all cash in their accounts in Canadian dollars. The costs to modify these record-keeping software systems to accommodate foreign currencies are believed to be significant. Furthermore, many financial institutions generate significant revenues from the currency conversion service fees, and thus have little economic incentive to invest in or support changes to the current record-keeping software systems that would permit account holders hold cash balances in foreign currencies. Finally, regulatory requirements present a further disincentive, as foreign currency contributions made to an account must be reported in Canadian dollars, which complicates the record keeping requirements.

[0008] Under the present conditions, the account holder has no real choice, and must continue to pay currency conversion fees each time a trade is made in a foreign security in a RSP account. Accordingly, there is a need to develop systems and methods that will allow account holders to trade in foreign securities while reducing currency conversion service fees.

Summary [0009] According to some embodiments, a system for processing trades of at least one security priced in a second currency for at least one account configured for a first currency is provided. The system comprises a processor, and a data store coupled to the processor for storing account data associated with each account. The account data comprises: a first cash balance in the first currency, a dummy security code representing the second currency, and a unit number associated with the dummy security code, where the unit number represents a second cash balance in the second currency. The processor is configured to: (i) receive information about a request for at least one trade of the at least one security to be executed in association with a particular account, and (ii) update the account data in that account after completion of each trade by: (a) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (b) debiting the unit number of the dummy security code with a cost of the at least one security.

[0010] The processor may be further configured to determine, for each trade associated with the at least one account, if the cost of the at least one security exceeds the unit number of the dummy security for that account, and if so, then: determine an account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number, and debit the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and an account exchange rate.

[0011] The processor may be further configured to determine, for a predetermined period, a master conversion amount that is equal to: the sum of the account conversion amount for each of the at least one trades during the predetermined period, reduced by a sum of any offsetting conversions of the second currency into the first currency for the at least one account during the predetermined period, execute a master currency conversion event by: obtaining a master exchange rate based on the master conversion amount, and determine a master converted funds amount equal to the product of the master conversion amount and the master exchange rate, and determine the account exchange rate for the at least one account based on a predetermined relationship of the account conversion amount to the master converted funds amount.

[0012] According to some embodiments, the account exchange rate for the at least one account may be substantially equal to the master exchange rate.

[0013] The processor may be further configured to receive information about a request for a further trade of a further security priced in the first currency to be executed in association with the particular account, and update the account data in that account after completion of the further trade by: (i) crediting the cash balance with proceeds of a sale of the further security, or (ii) debiting the cash balance with a cost of the further security.

[0014] The processor may be further configured to determine, for each further trade associated with the at least one account, if the cost of the further security exceeds the cash balance for that account, and if so, then determine a second account conversion amount equal to the amount by which the cost of the further security exceeds the cash balance, and debit the unit number of the dummy security for that account by an amount equal to the product of the second account conversion amount and a second account exchange rate.

[0015] According to some embodiments, the account exchange rate may be equal to a product of the master exchange rate and a modifying factor.

[0016] According to some embodiments, the offsetting conversions of the second currency into the first currency may include the second account conversion amount. The offsetting conversions may include a debit amount applied to the unit number of the dummy security converted into a credit amount applied to the cash balance based on a user request received by the processor.

[0017] The system may further comprise a communications device linked to the processor for receiving requests to trade the at least one security.

[0018] According to other embodiments, a system for processing trades of at least one security priced in a second currency for at least one account configured for a first currency is provided. The system comprises a processor configured to receive information about a request to trade the at least one security, and a data store coupled to the processor for storing account data associated with each account. The processor is configured to determine a master conversion amount for a predetermined period, where the master conversion amount includes the sum of at least one account conversion amount for at least one trade executed during the predetermined period, reduced by a sum of any offsetting conversions occurring during the predetermined period.
The processor is also configured to execute a master currency conversion event by obtaining a master exchange rate based on the master conversion amount, determine a master converted funds amount equal to the product of the master conversion amount and the master exchange rate, and determine an account exchange rate for the at least one account based a predetermined relationship of the account conversion amount for each trade to the converted funds amount.

[0019] The account data may include a first cash balance in the first currency, a dummy security code representing the second currency, and a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency, and the processor may be configured to receive information about a trade request for at least one trade of the at least one security to be executed in association with a particular account, and update the account data in that account after completion of each trade by:
(i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

[0020] The processor may be further configured to determine, for each trade associated with the at least one account, the account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number, and if the cost of the at least one security exceeds the unit number of the dummy security for that account, then debit the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and the account exchange rate.

[0021] According to yet other embodiments, a method for processing trades of at least one security priced in a second currency for at least one account configured for a first currency is provided. The method comprises:

[0022] (a) receiving information about a request for at least one trade of the at least one security executed in association with a particular account, wherein the account has associated account data including a first cash balance in the first currency, a dummy security code representing the second currency, and a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency; and [0023] (b) updating the account data in that account after completion of each trade by: (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

[0024] The method may further comprise determining, for each trade associated with the at least one account, if the cost of the at least one security exceeds the unit number of the dummy security for that account, and if so, then determining an account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number, and debiting the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and an account exchange rate.

[0025] The method may further comprise determining, for a predetermined period, a master conversion amount that is equal to the sum of the account conversion amount for each of the at least one trades during the predetermined period, reduced by a sum of any offsetting conversions of the second currency into the first currency for the at least one account during the predetermined period, executing a master currency conversion event by obtaining a master exchange rate based on the master conversion amount, and determining a master converted funds amount equal to the product of the master conversion amount and the master exchange rate, and determining the account exchange rate for the at least one account based a predetermined relationship of the account conversion amount to the converted funds amount.

[0026] The method may further comprise receiving information about a further trade request for a further security priced in the first currency to be executed in association with the particular account, and updating the account data in that account after completion of the further trade by (i) crediting the cash balance with proceeds of a sale of the further security, or (ii) debiting the cash balance with a cost of the further security.

[0027] The method may further comprise determining, for each further trade associated with the at least one account, if the cost of the further security exceeds the cash balance for that account, and if so, then determining a second account conversion amount equal to the amount by which the cost of the further security exceeds the cash balance, and debiting the unit number of the dummy security for that account by an amount equal to the second account conversion amount divided by the account exchange rate.

[0028] According to yet other embodiments, a physical computer readable medium is provided. The computer readable medium includes computer executable instructions which, when executed on a computing device, cause the computing device to:

[0029] (a) receive information about a request for at least one trade of the at least one security to be executed in association with a particular account, wherein the account has associated account data including a first cash balance in the first currency, a dummy security code representing the second currency, and a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency, and [0030] (b) update the account data in that account after completion of each trade by: (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

[0031] The physical computer readable medium may be further configured to cause the computing device to determine, for each trade associated with the at least one account, if the cost of the at least one security exceeds the unit number of the dummy security for that account, and if so, then determine an account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number, and debit the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and an account exchange rate.

[0032] The physical computer readable medium may be further configured to cause the computing device to determine, for a predetermined period, a master conversion amount that is equal to the sum of the account conversion amount for each of the at least one trades during the predetermined period, reduced by a sum of any offsetting conversions of the second currency into the first currency for the at least one account during the predetermined period, execute a master currency conversion event by: obtaining a master exchange rate based on the master conversion amount, and determining a master converted funds amount equal to the product of the master conversion amount and the master exchange rate, and determine the account exchange rate for the at least one account based a predetermined relationship of the account conversion amount to the converted funds amount.

[0033] The physical computer readable medium may be further configured to cause the computing device to receive information about a further trade request for a further security priced in the first currency to be executed in association with the particular account, and update the account data in that account after completion of the further trade by: (i) crediting the cash balance with proceeds of a sale of the further security, or (ii) debiting the cash balance with a cost of the further security.

[0034] Further aspects and advantages of the embodiments described herein will appear from the following description taken together with the accompanying drawings.

Brief Description of the Drawings [0035] For a better understanding of the embodiments described herein and to show more clearly how they may be carried into effect, reference will now be made, by way of example only, to the accompanying drawings which show at least one exemplary embodiment, and in which:

[0036] Figure 1 is a schematic diagram showing a system for processing trades of securities with multiple currencies according to one embodiment;

[0037] Figure 2 is a schematic example of an account data structure for use with the system of Figure 1;

[0038] Figure 3 is a flowchart illustrating a method of processing trades of securities with multiple currencies using the system of Figure 1;

[0039] Figure 4 is a flowchart illustrating a method of calculating exchange rates for use with the system of Figure 1 ; and [0040] Figure 5 is a flowchart illustrating a method of updating buying power associated with a particular account according to one embodiment.
Detailed Description [0041] It will be appreciated that numerous specific details are set forth in order to provide a thorough understanding of the exemplary embodiments described herein. However, it will be understood by those of ordinary skill in the art that the embodiments described herein may be practiced without these specific details. In other instances, well-known methods, procedures and components have not been described in detail so as not to obscure the embodiments described herein. Furthermore, this description is not to be considered as limiting the scope of the embodiments described herein in any way, but rather as merely describing the implementation of the various embodiments described herein.

[0042] Figure 1 shows a system 10 for processing trades of securities with multiple currencies according to one embodiment. In particular, the system 10 is configured for the processing of trades of securities in association with an account having a cash balance in a first currency, where the securities are priced in a second currency that is different from the first currency, in order to preferably reduce or eliminate currency conversion service fees.

[0043] It will be understood that the first and second currencies may be any two currencies (e.g. Canadian dollars, US dollars, Euros, British pounds, etc.). However, for clarity the description herein will generally refer to Canadian dollars (CAD) as the first currency and US dollars (USD) as the second currency.

[0044] The system 10 generally includes a processor 12, such as one or more host servers generally configured to receive information about one or more trade requests. The information about a trade request may include: (i) the trade request itself (e.g. a request to trade a number shares or units of a particular security), (ii) other information associated with the trade request (e.g. a notification that one or more trade requests have been received and/or are being processed by another entity, such as a trading platform 44), or a combination of (i) and (ii).

[0045] As shown, the processor 12 may be provided by an account service provider 14, such as a brokerage.

[0046] The system 10 may also include a communications device 16, such as a terminal or any other networked computing device, which is linked to the processor 12. The communications device 16 is generally configured to receive trade requests that are input by a user 18 or account holder into the communications device 16.

[0047] The communications device 16 communicates information about the trade requests to the processor 12 preferably via one or more communication networks, such as the Internet. For example, the communications device 16 may be a terminal or a personal computer that displays a web page to the user 18 via a display 20. The user 18 may input a trade request into the communication device 16 via an input device 22, such as a keyboard or mouse associated with the communications device 16. The communication device 16 may communicate information about the trade requests to the processor 12.

[0048] In some examples, the above information may include actual trade requests that are received by the processor 12, and which may be processed by the account service provider 14 or forwarded to another entity for processing.
In other examples, the account service provider 14 may receive information about one or more trade requests (e.g. a notification that a trade request has been received) from another entity that is actually processing the trade requests, such as for example the trading platform 44.

[0049] In other embodiments, other communications devices could be used to receive trade requests. For example, the communications device 16 may be a telephone, smart phone, or cell phone (for example, permitting voice communication between the user 18 and a broker), a wireless data device such as a personal digital assistant (PDA) (allowing the trade request to be sent via an SMS or text message), or a computer or other device configured to send email with the trade request.

[0050] In other embodiments, the trade requests could be generated from another source. For example, the trade request could be triggered automatically based on predetermined market conditions, such as where a particular security reaches a predetermined buying or selling price (e.g. a stop loss order or a buy below market price order).

[0051] In some embodiments, the trade request may be received from the user 18 via the communications device 16 and information about the trade request is then sent to the account service provider 14 for processing. In other embodiments, the trade request may be processed by a third party, for example a service provider who operates a trading platform 44, before or while information about the trade request is sent to the processor 12. For example, the third party operating the trading platform 44 may receive and process one or more trade requests from one or more users 18 via web pages displayed on a plurality of displays 20, and may integrate with the account service provider 14 as well as with other brokerage entities (not shown). Information about the trade request may be forwarded to the account service provider 14 by the trading platform 44.

[0052] In some embodiments, the information about the one or more trade requests may be sent to the processor 12 at the account service provider 14 in real time or in substantially real time as each trade request is received or processed by the trading platform 44. In other embodiments, the information about the one or more trade requests may be sent to the processor 12 in one or more batches at one or more times within a predetermined period of time (e.g.
at the end of a trading day).

[0053] In some embodiments, the trading platform 44 may send the trade request to a clearinghouse 46 (either simultaneously or before or after sending the trade request to the account service provider 14). In some embodiments, the clearinghouse 46 may process the trade request, for example by buying and/or selling the requested securities via a trading marketplace 48. In other embodiments, (e.g. direct access trading), the trade request may be sent directly from the trading platform 44 to the marketplace 48 where the trade request may be executed.

[0054] In some embodiments, the account service provider 14, trading platform 44 and clearinghouse 46 may be integrated within a single entity. In other embodiments, one or more separate entities within the system 10 may perform the roles of account service provider 14, trading platform 44 and clearinghouse 46.

[0055] The system 10 also includes one or more data stores 24, such as databases associated with the account service provider 14. The data stores 24 may contain information about the trade requests, information about the securities being traded, information specific to accounts of particular users 18, and other related information. For example, the data stores 24 may include account data 26 associated with one or more accounts, where each account is associated with a corresponding user 18.

[0056] As shown in Figure 2, the account data 26 may include various data associated with a particular account for each user 18. For example, the account data 26 may include information such as an account number 30, a cash balance 32, a dummy code 34, a unit number 36 of dummy securities, other information 40 about other securities associated with each account, and personal information 42 about the user 18 associated with that account.

[0057] The account number 30 is a unique identifier associated with a particular account and serves to distinguish particular accounts from one another. For example, as shown a first account 31a has a first account number 001, a second account 31b has a second account number 002, and a third account 31c has a third account number 003.

[0058] The account data 26 also includes the cash balance 32 associated with each account. The cash balance 32 represents an amount of the first currency (in this embodiment Canadian dollars) that is currently associated with that account (i.e. deposited with the account service provider 14 or a third party).
As shown, the first account 31a has a first cash balance 32 of $10,000 CAD, the second account 31b has a second cash balance 32 of $5,000 CAD, and the third account 31 c has a third cash balance 32 of $0 CAD.

[0059] In some embodiments, where the accounts are Canadian Registered Savings Plan (RSP) accounts, the account may be limited to holding cash balances 32 in Canadian dollars, as generally discussed above.

[0060] In some embodiments, the cash balance 32 for each account may be modified by the user 18 associated with that account, by withdrawing or depositing CAD amounts. For example, the user 18 may deposit CAD funds into the cash balance 32, such as by electronically transferring funds to the account service provider 14 via a bank or another financial institution. Similarly, the user 18 may withdraw funds, for example by writing cheques on the account in CAD, or by transferring CAD funds from the cash balance 32 to another account, which may be at a bank or another financial institution.

[0061] The account data 26 may also include at least one dummy security code 34 associated with each account. Each dummy security code 34 represents a second currency (e.g. USD) that is different from the first currency (e.g.
CAD), and different dummy security codes 34 may be used to represent different currencies. As shown, for example, both the first account 31a and second account 31b each include a first dummy security code 34 populated with code "763", which in this embodiment is associated with USD. Conversely, the third account 31c has a second dummy security code 34 populated with code "982", which in this embodiment is associated with Euros.

[0062] In some embodiments, a particular account may have more than one dummy security code 34 associated with that account, and thus the account may be configured to handle security transactions in multiple different currencies.
For example, the first currency in an account may be CAD, the second currency may be USD, and a third currency may be Euros.

[0063] The account data 26 may also include at least one unit number 36 associated with the dummy security code 34 for each particular account. Each unit number 36 generally represent an amount of the "dummy units" equal to a predetermined amount of the second currency (in this embodiment, US dollars), in association with the dummy code 34 for that particular account. For example, in this embodiment, each dummy unit in the unit number 36 for the first account 31a and second account 31b has a predetermined value equal to one USD.
Accordingly, the first account 31a has a first unit number of 5000 (e.g. 5000 dummy units of dummy security code "763"), which represents a cash balance or position of $5,000 USD. Similarly, the second account 31b has a second unit number of 10,000 (e.g. 10,000 dummy units of dummy security code "763"), which represents a cash balance of $10,000 USD. Finally, in this embodiment each dummy unit for the unit number 36 of the third account 31c has a value equal one Euro. The third account 31c thus has a third unit number of 20,000 (e.g. 20,000 dummy units of dummy security code "982") that represents a cash position of 20,000 Euros.

[0064] Within each particular account, the unit number 36 is treated as a "dummy security", rather than as a cash deposit of USD or other currency.
Accordingly, current record-keeping software systems used for managing RSP
accounts will be capable of tracking and managing the unit numbers 36 as if they were actual securities, such as shares of common stock, rather than cash deposits associated with USD. Accordingly, this avoids some of the single-currency limitations imposed by current record-keeping software systems.

[0065] Furthermore, as will be discussed in greater detail below, this configuration allows the user associated with a particular account to manage buying and selling securities in two different currencies, such as CAD and USD.

This, in turn, may result in the user 18 being charged reduced currency conversion service fees, or in fact no service fees under certain conditions.

[0066] As with the cash balance 32 above, each user 18 associated with a particular account may withdraw and deposit funds into that account in association with the unit number 36 of dummy units. However, since the unit number 36 represents a cash balance in USD, the user 18 must convert deposits or withdrawals into USD. For example, it is possible to convert funds from the cash balance 32 into the unit number 36 within each account, and vice versa.
In doing so, however, the user 18 may incur currency conversion service fees associated with transferring funds between CAD and USD.

[0067] In some embodiments, it is possible to directly deposit and withdraw funds in association with the unit number 36, for example by transferring funds held in another USD account.

[0068] In some embodiments, while the unit number 36 of dummy units in each account represents a cash balance in USD, the actual cash (in USD) is held by another entity. For example, the actual cash for a particular account is preferably held by a trustee, who may be the account service provider 14 or some other third party.

[0069] The account data 26 may also include other information 40 about securities and other assets held in association with each particular account.
As shown for example, the first account 31a has 1000 shares of Company A
associated therewith, the second account 31b has 2000 shares of Company B
associated therewith, while the third account 31c has 200 shares of Company A
and 500 shares of Company C associated therewith.

[0070] The account data 26 may also include other data, including personal information 42 about the account holder or user 18 associated with each account. The personal information 42 may include name and address for the user associated with that account, social insurance numbers, and other information, such as information required to meet regulatory obligations. For example, in this embodiment, the first account 31a is associated with a user named "Joe Smith", the second account 31 b is associated with a user 18 named "Bill Johnson", and the third account 31c is associated with a user 18 named "Sam Peterson".

[0071] The personal information 42 may also include information about the trading history for that particular account, and whether that user 18 of that account is a preferred customer entitled to preferential treatment (such as for example reduced transaction fees for each trade or improved exchange rates).
For example, customers that execute a large number of trades, make trades having large dollar amount, or who have significant assets may pay reduced service fees and other rates.

[0072] The personal information 42 may also include a currency preference, for example a pre-selected currency into which all trades are to be resolved. For example, the personal information 42 may record that a particular user 18 wants all trades to be settled in CAD, USD, or the currency in which particular security is traded when purchased or sold.

[0073] A method 100 of processing trades according to an embodiment of the present invention will now be described with reference to Figures 1 and 3.

[0074] At step 102, a request is received for one or more trades of one or more securities to be executed in association with a particular account. The trade request may be input by the user 18 using the communications device 16. In turn, the communications device 16 communicates information about the trade request to the processor 12. Alternatively, the trade request may be an automated request, such as a stop loss order, which may be triggered automatically by the trading platform 44 or by the processor 12, for example.

[0075] At step 104, the processor 12 determines whether the trade request was for a security priced in CAD or whether the security is priced in USD. If the trade request was for a security priced in CAD, then the method 100 proceeds to step 122 and the trade is processed in CAD (as described in greater detail below). Otherwise, where the processor 12 determines that the security is priced in USD, the method 100 proceeds to step 106.

[0076] At step 106, the processor 12 determines the currency for settling the trade, based for example on the currency preference in the personal information 42 described above. For example, the user 18 may prefer that some or all trades are to be resolved or settled in CAD, and if so then the method proceeds to step 122 and the trade is processed in CAD. In such examples, all purchases or sales of securities may be resolved into CAD and held within the account in CAD, regardless of whether the securities are priced in USD or CAD, and the user 18 may pay service fees associated with converting the proceeds of the sale of USD securities into CAD. However, as discussed in further detail below, by pooling multiple trades of one or more users 18 within a predetermined period and offsetting required purchases and sales of CAD and USD against each other, the currency conversion service fees for a particular user 18 may still be reduced.

[0077] Alternatively, if the user 18 would like the trade to be settled in USD, then the method 100 proceeds to step 108.

[0078] In some examples, the user preference as to currency settlement may be stored in personal information 42 associated with each user account or with each user 18.

[0079] At step 108, the processor 12 determines whether the trade was for a purchase or a sale of the security priced in USD. For example, the trade request may be a request to buy $10,000 USD worth of a US security (e.g. 100 shares in Company A, valued at $100 USD per share). Alternatively, the trade request may be a request to sell $5,000 USD worth of a different US security (e.g. 25 shares in Company B, valued at $200 USD per share). Where the trade request is a sale of securities, the method 100 proceeds to step 110.
Conversely, where the trade request is a purchase of securities, the method 100 proceeds to step 112.

[0080] At step 110, the processor 12 updates the account data 26 for that particular account by crediting the unit number 36 of the dummy security code by an amount equal to the proceeds of the sale of the security. For example, where a sale of $10,000 USD worth of a US security was made in association with the first account 31a, the unit number 36 for that account would be updated from 5,000 to 15,000, representing a new cash balance or position of $15,000 USD. In this manner, sales of securities priced in USD may be made and held within the account without needing to convert any of the USD proceeds into CAD
as part of the execution of the trade. Accordingly, currency conversion service charges associated with such trades may be eliminated.

[0081] In some embodiments, the processor 12 may send a unit trade file 52 to the clearinghouse 46, which indicates to the clearinghouse 46 that a particular amount of USD dummy units needs to be purchased or sold in association with that particular account. For the example given above, the processor 12 may send a unit trade file 52 to the clearinghouse 46 indicating that 10,000 dummy units should be purchased in association with the first account 31 a.

[0082] Returning to method 100, at step 112, where the trade request is a purchase of USD securities, a determination is made by the processor as to whether the unit number 36 represents a value of USD sufficient to cover the costs of the purchase of that particular security. Where the processor 12 determines that the value of the unit number 36 is sufficient to cover the cost of purchasing the desired security, then the method 100 proceeds to step 114.

[0083] At step 114, the processor 12 updates the account data 26 for that particular account by debiting the unit number 36 of the dummy security code by an amount equal to the purchase cost for that security. For example, where a purchase of $5,000 USD worth of a US security was performed in association with the second account 31b, the unit number 36 for that account would be updated from 10,000 to 5,000, representing a remaining cash balance or position of $5,000 USD. In this manner, certain purchases of securities priced USD may be made without converting any CAD into USD to execute the purchase.
Accordingly, currency conversion service charges associated with the trade may be eliminated.

[0084] In some embodiments, the processor 12 may then send the unit trade file 52 to the clearinghouse 46, which indicates to the clearinghouse 46 that 5000 USD dummy units need to be sold in association with the second account 31 b.

[0085] As described above, the user 18 may decide that some or all trades are to be resolved into a predetermined currency (e.g. CAD or USD), regardless of the currency of the security being traded. In such embodiments, the user 18 may therefore have to pay currency conversion service fees. However, as discussed above, the pooling of multiple trades may tend to reduce the currency conversion service fees paid by any particular user 18.

[0086] Returning to step 112, where the processor 12 determines that the cost of purchasing the desired security exceeds the value of the available unit number 36 of dummy securities, then the method 100 proceeds to step 116.

[0087] In a preferred embodiment, the system 10 may be configured such that the cash balance 32 and/or the unit number 36 must always be equal to or greater than zero (i.e. no account may have a negative cash balance 32 or negative unit number 36) or another preset limit. This may be a regulatory requirement (for example, when dealing with RSP accounts), or may be based on desired criteria of the account service provider 14, for example to reduce risks associated with extending credit to one or more users 18.

[0088] Suppose for example that a purchase of $13,000 USD worth of Company A shares was requested in association with the second account 31b.

The unit number 10,000, representing a cash balance $10,000 USD, is less than the purchase price of $13,000 US dollars. The available unit number 36 of dummy units is therefore insufficient to cover the cost of the trade, and execution of the trade using only USD dummy units would result in a unit number balance 36 less than zero. In some embodiments, this may inhibit the trade from proceeding. Preferably, however, the trade continues, with a portion of the cash balance 32 of CAD being converted into USD to make up the difference.

[0089] Therefore, at step 116, a determination is made as to the amount by which the purchase price of the security exceeds the value of the available units 36 of USD (i.e. how much USD cash must be purchased to execute that trade). In particular, the processor 12 determines an account conversion amount (ACA) that is equal to the purchase cost of the securities minus the value of the available unit number 36 of USD dummy securities. For example, as described above where $13,000 USD worth of Company A shares are being purchased in the second account 31b, the account conversion amount (ACA) would be equal to ($13,000 USD - (10,000 dummy units X $1 US dollar/dummy unit)) = $3,000 USD.

[0090] Accordingly, in order for the requested trade to be executed, an additional $3,000 USD must be obtained. This additional amount may be obtained by converting funds held in the cash balance 32 of that account from CAD into USD to make up the ACA.

[0091] At step 118, the account foreign exchange rate (AFX) is determined. In some embodiments, the AFX is determined based on a current market rate by purchasing a quantity of USD in real time or substantially in real time. The AFX may include one or more currency conversion service fees charged by a bank or financial institution. For example, an additional 2%
currency conversion service fee may be applied by the financial institution executing the currency conversion.

[0092] Preferably, however, the AFX is determined based on a master foreign exchange rate (MFX), with a plurality of trades and other events being used to offset the total amount of currency that must be converted between CAD
and USD, as discussed in further detail below.

[0093] In some embodiments, the AFX may be determined by the account service provider 14 and may be sent to the clearinghouse 46 as an FX file 50, which specifies the exchange rate for conversion between CAD and USD for each particular account. In some embodiments, this may be done for each account. Preferably, however, the FX file 50 is only done for the MFX.

[0094] At step 120, the cash balance 32 of the account is debited by an amount equal to the product of the ACA (e.g. $3,000 USD in the example listed) multiplied by the AFX. For example, if the CAD to USD AFX is 0.90 and no service fees are charged, $3333.33 CAD is debited against the cash balance 32 for the second account 31b, resulting in a cash balance 32 after the trade of $1667.67 CAD. At step 114, the processor 12 then debits the unit number 36 for that particular account by the remaining amount of USD needed for the particular trade, which reduces the unit number 36 to zero.

[0095] In this manner, purchases of securities priced in USD may be made by converting only some CAD into USD to execute the trades, as opposed to converting the entire USD purchase price. Accordingly, service charges associated with currency conversion between CAD and USD may be reduced.

[0096] At step 122, a similar process may be performed with respect to purchase of securities that are priced in CAD. In particular, the cash balance may be credited or debited by the proceeds and costs (respectively) associated with particular trades made for securities that are priced in CAD.
Furthermore, where the purchase cost of a particular security priced in CAD exceeds the balance of the cash balance 32, the processor 12 may determine a second account conversion amount (SACA) equal to the amount by which the cost of the CAD security exceeds the available cash balance 32, and a second account foreign exchange rate (SAFX) based on the market rate to convert USD into CAD. The processor 12 may then debit the unit number 36 of the USD dummy security for that account by an amount equal to the product of second account conversion amount multiplied by the second account exchange rate (i.e. = SACA
x SAFX).

[0097] In this manner, purchases of securities priced in CAD may be made by converting only some USD into CAD to execute the trades, as opposed to converting the entire CAD purchase price. Accordingly, service charges associated with currency conversion between USD and CAD may be reduced.

[0098] As discussed in greater detail below, the service fees may be further reduced by pooling multiple trades of securities together within a predetermined period, and by offsetting the amounts of the various currencies that are purchased (i.e. offsetting the quantities of CAD to be converted to USD, and vice versa, for different trades for one or more users 18 of the system 10).

[0099] For example, as shown in Figure 4, in some embodiments, a method 200 of pooling trades and other currency conversion events may be used to at least partially offset some of the costs of currency conversion between CAD
and USD.

[00100] At step 202, a predetermined period is defined during which the trades will be pooled together. Preferably, the predetermined period is a single day of active trading. In other examples, the predetermined period may be two or more days or a week of active trading, or a subset of a day (for example a one-hour period). The predetermined period may be set automatically by the processor 12, for example based on a certain quantity or volume of trading performed. Preferably, however, the predetermined period is determined manually.

[00101] At step 204, the processor 12 determines a master conversion amount (MCA) for the predetermined period. The MCA is calculated by adding up all of the ACAs for the predetermined period and subtracting any offsetting conversions. Offsetting conversions include transactions or events that result in:
(i) a USD gain (such as a sale of a security priced in USD), or (ii) a conversion of USD into CAD. One example of such an offsefting event is a request by a user 18 to convert USD cash balance (i.e. dummy unit amount 36) into CAD to be added to CAD cash balance 32. Another example may be a SACA event, where the purchase cost of a security priced in CAD exceeded the available CAD cash balance, and USD funds were converted to CAD (and deducted from the USD
dummy unit amount 36). Preferably, a single MCA is calculated from all of the transactions executed in all accounts of the account service provider 14 during the predetermined period.

[00102] At step 206, a master foreign exchange rate (MFX) is determined.
The MFX may be determined by obtaining a current market rate for currency conversion based on the total or a pooled amount of the MCA. For example, the system 10 may send a FX file 50 to the clearinghouse 46 after the predetermined period (i.e. at the end of a trading day or shortly thereafter), allowing an MFX to be determined for the entire MCA.

[00103] At step 208, the processor 12 may then execute a currency conversion event, converting CAD funds into USD funds. The currency conversion event occurs by determining a converted funds amount equal to the product of the MCA multiplied by the MFX (=MCA x MFX). The currency conversion event may take place at one or more different times, for example at the end of the predetermined period (e.g. at the end of a trading day).

[00104] By offsetting different conversion events within the predetermined period (i.e. conversions from CAD into USD and conversions from USD into CAD
that occurred within the trading day), the master conversion amount (MCA) may be reduced. For instance, in the example above $3,000 USD must be purchased to cover a share purchase of $13,000 USD worth of Company A shares in the second account 31b. At the same time, consider a further trade request to purchase $12,000 CAD worth of Company D shares (e.g. 1200 shares of Company D, priced at $10 CAD per share) in association with the first account 31a. Since only $10,000 CAD is available in the cash balance 32 in the first account 31a, an additional $2,000 CAD is needed to complete the trade.

[00105] Under conventional currency conversion systems, assuming the going exchange rate to purchase and sell is $1.00 CAD = $0.90 USD (for clarity, the normal spread between buying and selling foreign exchange rates will be ignored), the first account 31a would have to exchange $1,800 USD dollars to cover the shortfall of $2,000 CAD. This may be accomplished by debiting 1800 to the unit number 36 of dummy units. With conventional currency conversion service fees of 2%, the first account 31 a would also be charged an additional $40 CAD service fee. Similarly, in the second account 31b, $3333.33 Canadian dollars would have to be debited to make up the shortfall of $3,000 USD. If the same 2% service fees were charged, the second account 31b would be charged service fees of about $66.67 CAD. In total, service fees for the two transactions are approximately $106.67 CAD.

[00106] However, according to method 200, the $3000 USD purchase from the second account 31b may be offset by the $1800 sale of USD in the first account 31a. Accordingly, the MCA leads to a net purchase of only $1200 USD.
Even if a 2% service fee is charged on this conversion, the total service fees will be only about $24 USD (or about $26.67 CAD) resulting in savings of about 75%
on the service fees.

[00107] At step 210, the processor 12 determines the account exchange rate (AFX) for each account based a relationship between the account conversion amount (ACA) and the converted funds amount. In some embodiments, the AFX rate is equal to the MFX. In other embodiments, the AFX
is equal to the MFX multiplied by a modifying factor.

[00108] With the AFX rate for each account being calculated, the total savings for each account may be determined. For instance, in the example above the total service fee savings was about 75%. Accordingly, in some embodiments each user 18 or account holder may be charged a reduced currency conversion service fee. For example, the service fee for the first account 31a may be only ($40) X (25%) = 10$ CAD. Similarly, the service fee for the second account 31b may be only ($66.67) X (25%) = $16.67 CAD. In other embodiments, the particular savings may not be passed directly on to the users.
Rather, the reduced currency conversion fees may be predetermined and may be fixed, and the account service provider 14 may retain any resulting profits.

[00109] In some examples, a particular AFX may be modified depending on factors such as the trading history for a particular customer, the amount of a particular trade, etc. For example, a preferred customer (for example, a high volume trader or a customer with significant assets) may pay a reduced AFX, such as for example 95% of the MFX, while a customer who rarely makes trades or who is considered a high risk customer may pay a premium AFX, such as for example 105% of the MFX.

[00110] A method 300 of determining the buying power of a particular user 18 according to an embodiment will now be described with reference to Figures and 5. Method 300 may include estimating the buying power of the user 18 as a trade request is processed by the system 10 by calculating the buying power in real-time or substantially in real-time, and by communicating the estimated buying power back to the user 18 during a particular predetermined period.
This method 300 may also include determining an actual buying power at the end of a predetermined period. The buying power generally represents the available value of trades that a user 18 may make. Where the cost of purchasing a security exceeds the total buying power available for a particular account, then the trade request may be rejected, and a notification may be sent to the user 18. For example, a user 18 with a buying power of $10,000 CAD may purchase $10,000 CAD worth of securities, but may be prohibited from purchasing $20,000 CAD
worth of securities.

[00111] At step 302, information about a trade request is received at the trading platform 44 via the communication device 16, with account data 26 being displayed to the user 18 via a display 20.

[00112] At step 304, the trade is executed. This may include the processor 12 determining whether sufficient funds are available in the CAD cash balance 32 and/or the unit number 36 of USD dummy units and determining account conversion amounts as generally discussed above.

[00113] At step 306, based on the execution of the trade, the system 10 determines an updated estimated buying power for that particular user 18. In some embodiments, the estimated buying power may be communicated back to the user 18 via the display 20. The estimated buying power is generally proportional to the amount of CAD cash balance 32 and the unit number 36 of USD dummy units available within that user's account. For example, the estimated buying power may equal a sum of the cash balance 32 and USD
available funds (equal to a product of the unit number 36 and an estimated account exchange rate). The estimated account exchange rate may be determined by examining current market conditions, by using historical data, or using projections based on the total currency conversions that have occurred within the predetermined period.

[00114] For example, the first account 31a may have an estimated buying power that includes $10,000 CAD (from the CAD cash balance 32) plus the product of 5,000 (unit number 36 of USD dummy units) and an estimated account exchange rate (e.g. $1.00 CAD = $0.90 USD). Thus, the estimated buying power of the first account 31 a may be $15,555.56 CAD.

[00115] At step 308, the FX file 50 and unit trade file 52 may be generated by the processor 12, and may be sent to the clearinghouse 46 so that the clearinghouse 46 can record the transactions made during the predetermined period.

[00116] At step 310, the processor 12 obtains the master exchange rate (MFX) after the predetermined period, and based on the MFX, calculates an actual account exchange rate for the trades made by the account during the predetermined period.

[00117] At step 312, the actual buying power for the account is determined.
The actual buying power may be equal to a sum of the CAD cash balance 32 and a product of the unit number 36 of USD dummy units and the actual account exchange rate. For example, the first account 31a may have an actual buying power that includes $10,000 CAD (from the CAD cash balance 32) plus the product of 5,000 (unit number 36 of USD dummy units) and an actual account exchange rate (e.g. $1.00 CAD = $0.95 USD), which may be different from the estimated exchange rate. Thus, in this example, the actual buying power of the first account 31a may be $15,263.16 CAD.

[00118] While the above description provides examples of the embodiments, it will be appreciated that some features and/or functions of the described embodiments are susceptible to modification without departing from the spirit and principles of operation of the described embodiments.
Accordingly, what has been described above has been intended to be illustrative of the invention and non-limiting and it will be understood by persons skilled in the art that other variants and modifications may be made without departing from the scope of the invention as defined in the claims appended hereto.

Claims (23)

1. A system for processing trades of at least one security priced in a second currency for at least one account configured for a first currency, the system comprising:

a. a processor; and b. a data store coupled to the processor for storing account data associated with each account, wherein the account data comprises:

i. a first cash balance in the first currency;

ii. a dummy security code representing the second currency; and iii. a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency;

c. wherein the processor is configured to:

i. receive information about a request for at least one trade of the at least one security to be executed in association with a particular account; and ii. update the account data in that account after completion of each trade by: (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

2. The system of claim 1, wherein the processor is further configured to:

a. determine, for each trade associated with the at least one account, if the cost of the at least one security exceeds the unit number of the dummy security for that account, and b. if so, then:

i. determine an account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number; and ii. debit the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and an account exchange rate.

3. The system of claim 2, wherein the processor is further configured to:

a. determine, for a predetermined period, a master conversion amount that is equal to:

i. the sum of the account conversion amount for each of the at least one trades during the predetermined period, ii. reduced by a sum of any offsetting conversions of the second currency into the first currency for the at least one account during the predetermined period;

b. execute a master currency conversion event by:

i. obtaining a master exchange rate based on the master conversion amount; and ii. determine a master converted funds amount equal to the product of the master conversion amount and the master exchange rate; and c. determine the account exchange rate for the at least one account based on a predetermined relationship of the account conversion amount to the master converted funds amount.

4. The system of claim 3, wherein the account exchange rate for the at least one account is substantially equal to the master exchange rate.

5. The system of claim 3, wherein the processor is further configured to:

a. receive information about a request for a further trade of a further security priced in the first currency to be executed in association with the particular account; and b. update the account data in that account after completion of the further trade by: (i) crediting the cash balance with proceeds of a sale of the further security, or (ii) debiting the cash balance with a cost of the further security.

6. The system of claim 5, wherein the processor is further configured to:

a. determine, for each further trade associated with the at least one account, if the cost of the further security exceeds the cash balance for that account; and b. if so, then i. determine a second account conversion amount equal to the amount by which the cost of the further security exceeds the cash balance; and ii. debit the unit number of the dummy security for that account by an amount equal to the product of the second account conversion amount and a second account exchange rate.

7. The system of claim 3, wherein the account exchange rate is equal to a product of the master exchange rate and a modifying factor.

8. The system of claim 5, wherein the offsetting conversions of the second currency into the first currency includes the second account conversion amount.

9. The system of claim 5, wherein the offsetting conversions include a debit amount applied to the unit number of the dummy security converted into a credit amount applied to the cash balance based on a user request received by the processor.

10. The system of claim 1, further comprising a communications device linked to the processor for receiving requests to trade the at least one security.

11. A system for processing trades of at least one security priced in a second currency for at least one account configured for a first currency, the system comprising:

a. a processor configured to receive information about a request to trade the at least one security;

b. a data store coupled to the processor for storing account data associated with each account;

c. wherein the processor is configured to i. determine a master conversion amount for a predetermined period, the master conversion amount including the sum of at least one account conversion amount for at least one trade executed during the predetermined period, reduced by a sum of any offsetting conversions occurring during the predetermined period;

ii. execute a master currency conversion event by obtaining a master exchange rate based on the master conversion amount;
and iii. determine a master converted funds amount equal to the product of the master conversion amount and the master exchange rate; and iv. determine an account exchange rate for the at least one account based a predetermined relationship of the account conversion amount for each trade to the converted funds amount.

12. The system of claim 11, wherein:
a. the account data comprises:

i. a first cash balance in the first currency;

ii. a dummy security code representing the second currency; and iii. a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency;

b. and the processor is configured to:

i. receive information about a trade request for at least one trade of the at least one security to be executed in association with a particular account; and ii. update the account data in that account after completion of each trade by: (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

13. The system of claim 11, wherein the processor is further configured to:

a. determine, for each trade associated with the at least one account, the account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number; and b. if the cost of the at least one security exceeds the unit number of the dummy security for that account, then debit the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and the account exchange rate.

14. The system of claim 11, further comprising a communications device linked to the processor for receiving information about trade requests of the at least one security.

15. A method for processing trades of at least one security priced in a second currency for at least one account configured for a first currency, comprising:

a. receiving information about a request for at least one trade of the at least one security executed in association with a particular account, wherein the account has associated account data including:

i. a first cash balance in the first currency;

ii. a dummy security code representing the second currency; and iii. a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency; and b. updating the account data in that account after completion of each trade by: (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

16. The method of claim 15, further comprising:

a. determining, for each trade associated with the at least one account, if the cost of the at least one security exceeds the unit number of the dummy security for that account, and b. if so, then:

i. determining an account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number; and ii. debiting the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and an account exchange rate.

17. The method of claim 16, further comprising:

a. determining, for a predetermined period, a master conversion amount that is equal to:

i. the sum of the account conversion amount for each of the at least one trades during the predetermined period, ii. reduced by a sum of any offsetting conversions of the second currency into the first currency for the at least one account during the predetermined period;

b. executing a master currency conversion event by:

i. obtaining a master exchange rate based on the master conversion amount; and ii. determining a master converted funds amount equal to the product of the master conversion amount and the master exchange rate; and c. determining the account exchange rate for the at least one account based a predetermined relationship of the account conversion amount to the converted funds amount.

18. The method of claim 17, further comprising:

a. receiving information about a further trade request for a further security priced in the first currency to be executed in association with the particular account; and b. updating the account data in that account after completion of the further trade by: (i) crediting the cash balance with proceeds of a sale of the further security, or (ii) debiting the cash balance with a cost of the further security.

19. The method of claim 19, further comprising a. determining, for each further trade associated with the at least one account, if the cost of the further security exceeds the cash balance for that account; and b. if so, then:

i. determining a second account conversion amount equal to the amount by which the cost of the further security exceeds the cash balance; and ii. debiting the unit number of the dummy security for that account by an amount equal to the second account conversion amount divided by the account exchange rate.

20. A physical computer readable medium including computer executable instructions which, when executed on a computing device, cause the computing device to:

a. receive information about a request for at least one trade of the at least one security to be executed in association with a particular account, wherein the account has associated account data including:

i. a first cash balance in the first currency;

ii. a dummy security code representing the second currency; and iii. a unit number associated with the dummy security code, the unit number representing a second cash balance in the second currency; and b. update the account data in that account after completion of each trade by: (i) crediting the unit number of the dummy security code with proceeds of a sale of the at least one security, or (ii) debiting the unit number of the dummy security code with a cost of the at least one security.

21. The physical computer readable medium of claim 20, further configured to cause the computing device to:

a. determine, for each trade associated with the at least one account, if the cost of the at least one security exceeds the unit number of the dummy security for that account, and b. if so, then i. determine an account conversion amount equal to the amount by which the cost of the at least one security exceeds the unit number; and ii. debit the first cash balance in the at least one account by an amount equal to the product of the account conversion amount and an account exchange rate.

22. The physical computer readable medium of claim 21, further configured to cause the computing device to:

a. determine, for a predetermined period, a master conversion amount that is equal to:

i. the sum of the account conversion amount for each of the at least one trades during the predetermined period, ii. reduced by a sum of any offsetting conversions of the second currency into the first currency for the at least one account during the predetermined period;

b. execute a master currency conversion event by:

i. obtaining a master exchange rate based on the master conversion amount; and ii. determining a master converted funds amount equal to the product of the master conversion amount and the master exchange rate; and c. determine the account exchange rate for the at least one account based a predetermined relationship of the account conversion amount to the converted funds amount.

23. The physical computer readable medium of claim 22, further configured to cause the computing device to:

a. receive information about a further trade request for a further security priced in the first currency to be executed in association with the particular account; and b. update the account data in that account after completion of the further trade by: (i) crediting the cash balance with proceeds of a sale of the further security, or (ii) debiting the cash balance with a cost of the further security.