WO2001033463A1 - Systeme informatique d'adjudication de prets et d'emprunts de valeurs - Google Patents

Systeme informatique d'adjudication de prets et d'emprunts de valeurs Download PDF

Info

Publication number
WO2001033463A1
WO2001033463A1 PCT/US2000/030120 US0030120W WO0133463A1 WO 2001033463 A1 WO2001033463 A1 WO 2001033463A1 US 0030120 W US0030120 W US 0030120W WO 0133463 A1 WO0133463 A1 WO 0133463A1
Authority
WO
WIPO (PCT)
Prior art keywords
auction
securities
offers
security
lenders
Prior art date
Application number
PCT/US2000/030120
Other languages
English (en)
Other versions
WO2001033463A8 (fr
Inventor
David Lockwood
Original Assignee
David Lockwood
Priority date (The priority date is an assumption and is not a legal conclusion. Google has not performed a legal analysis and makes no representation as to the accuracy of the date listed.)
Filing date
Publication date
Application filed by David Lockwood filed Critical David Lockwood
Priority to US09/890,815 priority Critical patent/US7349881B1/en
Priority to AU13578/01A priority patent/AU1357801A/en
Publication of WO2001033463A1 publication Critical patent/WO2001033463A1/fr
Publication of WO2001033463A8 publication Critical patent/WO2001033463A8/fr

Links

Classifications

    • G—PHYSICS
    • G06—COMPUTING; CALCULATING OR COUNTING
    • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q40/00—Finance; Insurance; Tax strategies; Processing of corporate or income taxes
    • G06Q40/08—Insurance
    • G—PHYSICS
    • G06—COMPUTING; CALCULATING OR COUNTING
    • G06Q—INFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q30/00—Commerce
    • G06Q30/06—Buying, selling or leasing transactions
    • G06Q30/08—Auctions

Definitions

  • the present invention relates to the exchange of securities and cash among borrowers and lenders. More particularly, the present invention relates to conducting an electronic auction over a computer network, such as Internet.
  • a borrower of securities such as a hedge fund
  • That borrower of securities entered into various agreements with the broker relating to collateral, margining and payment in return for a variety of services.
  • a borrower of securities would arrange an account with another broker or in lender of securities.
  • the borrower of securities phones the broker, or lenders securities, and requests to take securities and give cash.
  • the broker would then call lenders of securities, which may include other brokers and custodial banks, and ask if they are willing to give securities and receive cash.
  • lenders of securities which may include other brokers and custodial banks, and ask if they are willing to give securities and receive cash.
  • the broker acts as intermediary, assuming the risk that either the borrower or lender of securities may default on their obligations. If the broker can find securities that the borrower wishes to receive at an acceptable price, then the broker may complete the transaction and moved the securities between the counterparties at agreed-upon date. In return for this service and assuming credit risk, the broker receives compensation from the borrower and lending the security in the form of a spread between the rate of interest paid on the cash from the taker of cash to the giver of cash.
  • the lenders securities may ask for the securities to be returned.
  • the broker will call the borrower of securities and asked the securities returned the broker for returning to the lender.
  • the borrower of securities may asked for the securities to begin back.
  • the broker will call the lenders securities and formed them that the securities will be returned.
  • the initial transaction is done for an open settlement date-that is no fixed agreed-upon settlement date. However, in some cases the borrower and lenders may agree on a fix settlement date.
  • a broker as an intermediary, however, incurs a number of disadvantages from the perspectives of the lenders and borrowers.
  • the broker earns money by maintaining a spread between the lender and borrower, which, if too high, can make certain otherwise desirable transactions too costly to execute. Consequently, it is difficult for lenders and borrowers to know the going fee for the loan of securities.
  • the broker's access to different lenders and borrowers may be very limited or very slow, thereby making it difficult to find lenders and borrowers of huge number of securities or within a desired amount of time.
  • the role of the broker in some cases, is replaced by a borrow and loan securities auction system that matches the prices and quantities for transactions among borrowers and lenders, using any one of various auctions.
  • the spread between the borrower and lender is reduced to zero, so that the borrower and lender agree to same fee in the loan of a specific quantity of securities.
  • the owner of the auction system makes his money not by the spread, but, for example, by charging an appropriate transaction fee.
  • consummated transactions are recorded and published, thereby fostering greater transparency in the securities loan market.
  • the auction system can also provide a central counterparty to replace the role of the broker as an assumptor of risk.
  • Some benefits and advantages include lower cost for borrower and lender by potentially eliminating one of the intermediaries; greater quantity of securities transacted for the borrower lender; greater transparency for the borrower and lender, to publishing of the prices; greater anonymity for the borrower lender, to eliminating the broker and supplying a central counterparty; greater knowledge of the market and therefore ability to buy and sell through a transparent mechanism to determine bids and offers for borrowers and lenders; faster response for borrowers and lenders in completing transactions, then phone calls between brokers; a price history of bids offers in transactions to a borrowers and lenders, not currently available since there is no centralize marketplace; and potentially less credit risk as be central counterparty of the exchange may be a superior credit to the individual brokers currently in the market.
  • FIG. 1 depicts a computer system that can be used to implement the present invention.
  • FIG. 2 shows a flowchart illustrating one embodiment of the present invention.
  • Computer system 100 includes a bus 102 or other communication mechanism for communicating information, and a processor 104 coupled with bus 102 for processing information.
  • Computer system 100 also includes a main memory 106, such as a random access memory (RAM) or other dynamic storage device, coupled to bus 102 for storing information and instructions to be executed by processor 104.
  • Main memory 106 also may be used for storing temporary variables or other intermediate information during execution of instructions to be executed by processor 104.
  • Computer system 100 further includes a read only memory (ROM) 108 or other static storage device coupled to bus 102 for storing static information and instructions for processor 104.
  • ROM read only memory
  • a storage device 110 such as a magnetic disk or optical disk, is provided and coupled to bus 102 for storing information and instructions.
  • Computer system 100 may be coupled via bus 102 to a display 112, such as a cathode ray tube (CRT), for displaying information to a computer user.
  • a display 112 such as a cathode ray tube (CRT)
  • An input device 114 is coupled to bus 102 for communicating information and command selections to processor 104.
  • cursor control 116 is Another type of user input device
  • cursor control 116 such as a mouse, a trackball, or cursor direction keys for communicating direction information and command selections to processor 104 and for controlling cursor movement on display 112.
  • This input device typically has two degrees of freedom in two axes, a first axis (e.g., x) and a second axis (e.g., y), that allows the device to specify positions in a plane.
  • the invention is related to the use of computer system 100 for a borrow and loan securities auction.
  • a borrow and loan securities auction is provided by computer system 100 in response to processor 104 executing one or more sequences of one or more instructions contained in main memory 106.
  • Such instructions may be read into main memory 106 from another computer-readable medium, such as storage device 110.
  • Execution of the sequences of instructions contained in main memory 106 causes processor 104 to perform the process steps described herein.
  • processors in a multi-processing arrangement may also be employed to execute the sequences of instructions contained in main memory 106.
  • hard- wired circuitry may be used in place of or in combination with software instructions to implement the invention.
  • embodiments of the invention are not limited to any specific combination of hardware circuitry and software.
  • Non-volatile media include, for example, optical or magnetic disks, such as storage device 110.
  • Volatile media include dynamic memory, such as main memory 106.
  • Transmission media include coaxial cables, copper wire and fiber optics, including the wires that comprise bus 102. Transmission media can also take the form of acoustic or light waves, such as those generated during radio frequency (RF) and infrared (IR) data communications.
  • RF radio frequency
  • IR infrared
  • Computer-readable media include, for example, a floppy disk, a flexible disk, hard disk, magnetic tape, any other magnetic medium, a CD-ROM, DVD, any other optical medium, punch cards, paper tape, any other physical medium with patterns of holes, a RAM, a PROM, and EPROM, a FLASH-EPROM, any other memory chip or cartridge, a carrier wave as described hereinafter, or any other medium from which a computer can read.
  • Various forms of computer readable media may be involved in carrying one or more sequences of one or more instructions to processor 104 for execution.
  • the instructions may initially be borne on a magnetic disk of a remote computer.
  • the remote computer can load the instructions into its dynamic memory and send the instructions over a telephone line using a modem.
  • a modem local to computer system 100 can receive the data on the telephone line and use an infrared transmitter to convert the data to an infrared signal.
  • An infrared detector coupled to bus 102 can receive the data carried in the infrared signal and place the data on bus 102.
  • Bus 102 carries the data to main memory 106, from which processor 104 retrieves and executes the instructions.
  • the instructions received by main memory 106 may optionally be stored on storage device 110 either before or after execution by processor 104.
  • Computer system 100 also includes a communication interface 118 coupled to bus 102.
  • Communication interface 118 provides a two-way data communication coupling to a network link 120 that is connected to a local network 122.
  • communication interface 118 may be an integrated services digital network (ISDN) card or a modem to provide a data communication connection to a corresponding type of telephone line.
  • ISDN integrated services digital network
  • communication interface 118 may be a local area network (LAN) card to provide a data communication connection to a compatible LAN.
  • LAN local area network
  • Wireless links may also be implemented.
  • communication interface 118 sends and receives electrical, electromagnetic or optical signals that carry digital data streams representing various types of information.
  • Network link 120 typically provides data communication through one or more networks to other data devices.
  • network link 120 may provide a connection through local network 122 to a host computer 124 or to data equipment operated by an Internet Service Provider (ISP) 126.
  • ISP 126 in turn provides data communication services through the worldwide packet data communication network, now commonly referred to as the "Internet” 128.
  • Internet 128 uses electrical, electromagnetic or optical signals that carry digital data streams.
  • the signals through the various networks and the signals on network link 120 and through communication interface 118, which carry the digital data to and from computer system 100, are exemplary forms of carrier waves transporting the information.
  • Computer system 100 can send messages and receive data, including program code, through the network(s), network link 120, and communication interface 118.
  • a server 130 might transmit a requested code for an application program through Internet 128, ISP 126, local network 122 and communication interface 118.
  • ISP 126 ISP 126
  • local network 122 ISP 126
  • communication interface 118 ISP 126
  • one such downloaded application provides for a borrow and loan securities auction as described herein.
  • the received code may be executed by processor 104 as it is received, and/or stored in storage device 110, or other non-volatile storage for later execution. In this manner, computer system 100 may obtain application code in the form of a carrier wave.
  • FIG. 2 is a flowchart illustrating the operation of one embodiment of the present invention, in which the major participants are the borrower, the lender, and the exchange.
  • the borrowers and lenders may be in either case brokers, hedge funds, custodial banks, corporations, mutual funds, pension plans, other financial market participants.
  • the securities may be equities, bonds, currencies, derivatives, and other financial instruments.
  • a central counterparty is also involved.
  • the borrowers and lenders may be members of the central counterparty, or alternatively, accept the credit risk of the opposing side of any transactions.
  • the lenders of securities will transmit electronic messages indicating offers to an auction server, in which each offer indicates a quantity of securities and a fee.
  • each offer indicates a quantity of securities and a fee.
  • one lender could transmit an offer for 100 shares of Acme, Inc. at 3%.
  • these are the only terms that the lender needs to specify, because the auction server will automatically determine the proper reference price, interest rate, the return date, and other parameters by published criteria, for example, the last sale price for the reference price of the security, and the federal funds rate for the interest rate.
  • the present invention is not limited to this preferred embodiment, and in order embodiments, the lender is allowed to specify additional terms in the offer, such as a reference price, and a trade date plus a settlement date.
  • the lenders of securities may specify a date in which the securities must be returned, which can be automatically set to the following day after the original settlement date.
  • the auction server can allow lenders of securities to decide which of multiple auctions in which to put their offers. Depending on the auction, additional information may be required. For example, if the auction is a periodic call, or as a fixed time, the lenders securities will have to input a time field as well, such as open or close or a given time interval. The auction server will then aggregate, on a continuous basis, if appropriate for that given type of auction, or a periodic or other basis if appropriate for another type of auction, the information above for all the lenders of securities and display that on the screen.
  • the borrowers of securities transmits offers to the auction server, indicating at least a desired quantity of security and a desired fee.
  • the borrowers can also specify a reference price and a trade date plus a settlement date.
  • the auction server conducts the auction to determine a match between a lender's offers and a borrower's offers, according to the auction rules in place for that particular option.
  • Various auctions are contemplated, but the present invention is not limited to any particular auction, for example, English auctions, Dutch auctions, first price sealed bid, uniform second price, double auctions, simultaneous bidding, hazard systems, handshake whisper time interval auctions, silent auctions, callable bid rotation auctions, the Swiss auction, etc.
  • the auction server can be configured to calculate the terms from set criteria and published information.
  • the auction server can determine the reference price as the last sale price of Acme (or the closing price or price at a specified time), and the interest rate to be charged as the fed funds rate.
  • the reference price of Acme is $10 per share
  • the fed funds rate is 5%.
  • the settlement date and the return date can be agreed upon, or automatically set to the current and next days, respectively.
  • the borrower would be informed that he can take the 100 shares of Acme and give $1000 cash to the lender on the settlement date, and the lender of the securities would get the $1000 cash and give the 100 shares.
  • Each transaction can be recorded in a database coupled to a web server so that participants can access the terms of the trades via web browsers, thereby making the securities loan market more transparent.
  • the auction server notifies the central counterparty that the borrowers and lenders of securities have an agreed-upon transaction.
  • the central counterparty then instructs that on the trade date the borrower of securities to receive securities and give cash and the lender of securities give securities and takes cash, in the amounts agreed to by both parties.
  • the amount of cash that the central counterparty both takes and receives for the borrower lender of securities may differ; for example, the central counterparty may require the borrower to over-collateralize the loan.
  • the central counterparty On the date agreed-upon to the securities to be returned, the central counterparty, if involved, notifies the borrower and lenders securities that the transaction be reversed, returning securities to the lender and lender returning the cash, with the borrower providing the securities and cash to complete the transaction.
  • Borrowers may decide they wish to continue to hold the securities and not returned him on the settlement date. In this case the borrower must go into the market and before a specified time, reach agreement either with the original borrower or another borrower, to retain possession of the securities. In this instance, if a central counterparty is involved, the borrower will not be required to return the securities, but may simply net against the central counterparty. If the central counterparty is not involved, then the borrower must return the securities to the original lender, and then the same time can agree to borrow additional securities from that original lender or another new lender.

Landscapes

  • Business, Economics & Management (AREA)
  • Accounting & Taxation (AREA)
  • Finance (AREA)
  • Engineering & Computer Science (AREA)
  • Theoretical Computer Science (AREA)
  • Economics (AREA)
  • Marketing (AREA)
  • Strategic Management (AREA)
  • Physics & Mathematics (AREA)
  • General Business, Economics & Management (AREA)
  • General Physics & Mathematics (AREA)
  • Development Economics (AREA)
  • Technology Law (AREA)
  • Entrepreneurship & Innovation (AREA)
  • Financial Or Insurance-Related Operations Such As Payment And Settlement (AREA)
  • Management, Administration, Business Operations System, And Electronic Commerce (AREA)

Abstract

La présente invention concerne un système (100) d'adjudication qui permet à des utilisateurs de participer par l'utilisation de leurs propres ordinateurs, de ceux de cambistes ou de courtiers, correctement connectés à ce système d'adjudication. Cette connexion peut utiliser l'Internet (128) ou une ligne privée de location ou un autre réseau. Cette invention à trait à un procédé et à un système qui offre des mécanismes d'adjudication, notamment une grande variété de types d'adjudication telles que décrites ci-dessous, et une contrepartie centrale permettant d'assumer le risque de crédit entre emprunteurs et prêteurs, si les emprunteurs et les prêteurs choisissent de ne pas effectuer la transaction entre eux. Ce procédé et ce système d'adjudication offre un moyen pour des emprunteurs et des prêteurs de se rencontrer d'une manière plus efficace, d'échanger à meilleur prix, d'échanger sur un plus gros marché, d'échanger plus rapidement, et dans certains cas d'éliminer le rôle du courtier en tant qu'intermédiaire entre l'emprunteur et le prêteur. Ce mécanisme facilite non seulement l'emprunt et la vente à découvert de valeurs qui suit celui-ci, mais également le financement de ces valeurs.
PCT/US2000/030120 1999-11-03 2000-11-02 Systeme informatique d'adjudication de prets et d'emprunts de valeurs WO2001033463A1 (fr)

Priority Applications (2)

Application Number Priority Date Filing Date Title
US09/890,815 US7349881B1 (en) 1999-11-03 2000-11-02 Computer borrow and loan securities auction system
AU13578/01A AU1357801A (en) 1999-11-03 2000-11-02 Computer borrow and loan securities auction system

Applications Claiming Priority (2)

Application Number Priority Date Filing Date Title
US16330399P 1999-11-03 1999-11-03
US60/163,303 1999-11-03

Publications (2)

Publication Number Publication Date
WO2001033463A1 true WO2001033463A1 (fr) 2001-05-10
WO2001033463A8 WO2001033463A8 (fr) 2001-09-20

Family

ID=22589403

Family Applications (1)

Application Number Title Priority Date Filing Date
PCT/US2000/030120 WO2001033463A1 (fr) 1999-11-03 2000-11-02 Systeme informatique d'adjudication de prets et d'emprunts de valeurs

Country Status (2)

Country Link
AU (1) AU1357801A (fr)
WO (1) WO2001033463A1 (fr)

Cited By (2)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
EP1505522A1 (fr) * 2003-08-08 2005-02-09 Sap Ag Méthode, logiciel et système pour la location d'instruments financiers
KR100705993B1 (ko) * 2001-06-06 2007-04-10 제이 치에 첸 상호 원조 대출 조합을 위한 안전 네트워크 시스템 및이의 데이터 처리 방법

Citations (5)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
US5077665A (en) * 1989-05-25 1991-12-31 Reuters Limited Distributed matching system
US5664115A (en) * 1995-06-07 1997-09-02 Fraser; Richard Interactive computer system to match buyers and sellers of real estate, businesses and other property using the internet
US5715402A (en) * 1995-11-09 1998-02-03 Spot Metals Online Method and system for matching sellers and buyers of spot metals
US5845266A (en) * 1995-12-12 1998-12-01 Optimark Technologies, Inc. Crossing network utilizing satisfaction density profile with price discovery features
US5966699A (en) * 1996-10-11 1999-10-12 Zandi; Richard System and method for conducting loan auction over computer network

Patent Citations (5)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
US5077665A (en) * 1989-05-25 1991-12-31 Reuters Limited Distributed matching system
US5664115A (en) * 1995-06-07 1997-09-02 Fraser; Richard Interactive computer system to match buyers and sellers of real estate, businesses and other property using the internet
US5715402A (en) * 1995-11-09 1998-02-03 Spot Metals Online Method and system for matching sellers and buyers of spot metals
US5845266A (en) * 1995-12-12 1998-12-01 Optimark Technologies, Inc. Crossing network utilizing satisfaction density profile with price discovery features
US5966699A (en) * 1996-10-11 1999-10-12 Zandi; Richard System and method for conducting loan auction over computer network

Cited By (2)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
KR100705993B1 (ko) * 2001-06-06 2007-04-10 제이 치에 첸 상호 원조 대출 조합을 위한 안전 네트워크 시스템 및이의 데이터 처리 방법
EP1505522A1 (fr) * 2003-08-08 2005-02-09 Sap Ag Méthode, logiciel et système pour la location d'instruments financiers

Also Published As

Publication number Publication date
AU1357801A (en) 2001-05-14
WO2001033463A8 (fr) 2001-09-20

Similar Documents

Publication Publication Date Title
US20220222748A1 (en) System and method for providing futures contracts in a financial market enviroment
US7349881B1 (en) Computer borrow and loan securities auction system
US11030687B2 (en) Bid/offer spread trading
US7483857B2 (en) Online e-commerce transactions incorporating effects of uncertainty and risk factors
US8626639B2 (en) Trade matching platform with variable pricing based on clearing relationships
US7974897B2 (en) System and method facilitating tri-party repurchase agreement transactions
US20070073608A1 (en) Cash only marketplace system for trading securities
US20070043648A1 (en) Foreign exchange trading platform
JP2001520421A (ja) 金融インスツルメントの電子取引のためのシステム、方法およびプログラム製品
CA2257428A1 (fr) Systeme informatise d'appariement des acheteurs et des vendeurs
US20030065598A1 (en) Methods and systems for managing a portfolio of securities
US20120296792A1 (en) Process for financing and interest rate price discovery utilizing a centrally-cleared derivative
US11449930B1 (en) Method and apparatus for trading assets in different currencies
US20230306512A1 (en) System for processing withholding payments
US20130006842A1 (en) System and method for creating and facilitating the trading of a foreign exchange deferred spot product
US20120197779A1 (en) Trade Matching Platform with Variable Pricing Based on Clearing Relationships
WO2007146989A2 (fr) Méthode et système permettant de négocier des biens matériels et immatériels
US20090265264A1 (en) Request for Market Stream
US20230030726A1 (en) Listed options position compression system
WO2001033463A1 (fr) Systeme informatique d'adjudication de prets et d'emprunts de valeurs
KR100964764B1 (ko) 인터넷 기반 외환거래 방법 및 시스템
Skora The Credit Default Swap''
AU2017200819A1 (en) System for providing futures contracts in a financial market environment

Legal Events

Date Code Title Description
AK Designated states

Kind code of ref document: A1

Designated state(s): AE AG AL AM AT AU AZ BA BB BG BR BY BZ CA CH CN CR CZ DE DK DM DZ EE ES FI GB GD GE GH GM HR HU ID IL IN IS JP KE KG KR KZ LC LK LR LS LT LU LV MA MD MG MK MN MW MX MZ NO NZ PL PT RO RU SD SE SG SI SK SL TJ TM TR TT TZ UA UG UZ VN YU ZA ZW

AL Designated countries for regional patents

Kind code of ref document: A1

Designated state(s): GH GM KE LS MW MZ SD SL SZ TZ UG ZW AM AZ BY KG KZ MD RU TJ TM AT BE CH CY DE DK ES FI FR GB GR IE IT LU MC NL PT SE TR BF BJ CF CG CI CM GA GN GW ML MR NE SN TD TG

121 Ep: the epo has been informed by wipo that ep was designated in this application
DFPE Request for preliminary examination filed prior to expiration of 19th month from priority date (pct application filed before 20040101)
AK Designated states

Kind code of ref document: C1

Designated state(s): AE AG AL AM AT AU AZ BA BB BG BR BY BZ CA CH CN CR CZ DE DK DM DZ EE ES FI GB GD GE GH GM HR HU ID IL IN IS JP KE KG KR KZ LC LK LR LS LT LU LV MA MD MG MK MN MW MX MZ NO NZ PL PT RO RU SD SE SG SI SK SL TJ TM TR TT TZ UA UG US UZ VN YU ZA ZW

AL Designated countries for regional patents

Kind code of ref document: C1

Designated state(s): GH GM KE LS MW MZ SD SL SZ TZ UG ZW AM AZ BY KG KZ MD RU TJ TM AT BE CH CY DE DK ES FI FR GB GR IE IT LU MC NL PT SE TR BF BJ CF CG CI CM GA GN GW ML MR NE SN TD TG

CFP Corrected version of a pamphlet front page
CR1 Correction of entry in section i

Free format text: PAT. BUL. 19/2001 UNDER (81) ADD "US"

WWE Wipo information: entry into national phase

Ref document number: 09890815

Country of ref document: US

REG Reference to national code

Ref country code: DE

Ref legal event code: 8642

122 Ep: pct application non-entry in european phase