WO2007148995A2 - Improved method and system for transacting commodities - Google Patents
Improved method and system for transacting commodities Download PDFInfo
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- WO2007148995A2 WO2007148995A2 PCT/NZ2007/000162 NZ2007000162W WO2007148995A2 WO 2007148995 A2 WO2007148995 A2 WO 2007148995A2 NZ 2007000162 W NZ2007000162 W NZ 2007000162W WO 2007148995 A2 WO2007148995 A2 WO 2007148995A2
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- 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 is directed to an improved method for electronic transaction of commodities, allowing for the more secure transaction of funds and commodities in straight purchase and auction type scenarios.
- on-line auctions are increasing popular - some common examples including E-bay (www.ebay.com) and NZ' s TradeMe (www.trademe.co.nz).
- E-bay www.ebay.com
- NZ' s TradeMe www.trademe.co.nz
- Tiering may be based on trading history, other trader feedback, the amount of details supplied, or address confirmation (e.g. mailing back a confirmation letter posted by mail to the physical address provided by the registrant). Details about the tier which the registered transactor has achieved may be posted on the auction site, along with details of feedback from other transactors.
- Some high profile auctions can attract genuine high value bids. However a significant number of bogus bids can also be placed. Such bogus bids require manual identification and deletion by staff at the auction site, which is quite time consuming and only able to deal with obvious bogus bids. Hence, bids which are not intended to be honoured, can impact on the efficiency and reputation of sites conducting electronic transactions.
- a method for conducting an electronic transaction for commodities in return for consideration comprising: verifying that the prospective purchaser in the transaction has sufficient consideration to match a purchase offer or to complete the transaction, and locking against further use of the consideration so that the consideration remains available to complete the transaction while a valid transaction process is in place.
- an electronic transaction system comprising: transactor accounts for holding one or more of considerations, transaction funds, and commodities; communication access for transactors to participate in a transaction process and manage their accounts; a funds verifier configured to verify that a prospective purchaser in a transaction has sufficient consideration in one of the transactor accounts to match a purchase offer or to complete the transaction; and a locking device configured to lock against further use of the consideration so that the consideration remains available to complete the transaction while a valid transaction is in place.
- a method of trading commodities comprising: creating tradable shares and entitlements in a tradable interest; allowing the purchase of said shares and entitlements in return for a consideration; creating owner accounts in which traders may hold purchased shares and entitlements; managing owner accounts to hold funds for the sale and purchase of said shares; verifying the prospective purchaser in a transaction has sufficient consideration to match a purchase offer or to complete the transaction; and locking against further use of the consideration so that the consideration remains available to complete the transaction while a valid transaction process is in place.
- An 'Account' such as used for holding consideration shall typically be owned or accessible by a transactor and shall hold funds or entitlement to consideration (as herein defined). Typically the term account shall be construed in the normal context of banking accounts though may hold considerations other than just monetary funds.
- 'Auction' shall refer to a transaction process where a commodity is offered to more than one possible purchaser, and the purchaser chosen based on one or more criteria. Criteria may be based the highest price offered, but need not be so based.
- 'Commodity' shall refer to anything for whom title of possession may be transferred. It includes both tangibles and intangibles. It may, for ⁇ example, include items such as: real property, shares, stocks, bonds, information, bearer entitlements, bets, precious metals, memorabilia, etc.
- Computer system' shall refer to one or more computers, which may be networked, which network may comprise a wide area network, and which may include access to different communication technologies, particularly for involvement of transactors.
- 'Consideration' shall include any tradable item or currency of value.
- Typical types of consideration within the present invention, can include: funds and currencies, shares, and tradable commodities.
- 'Electronic trading' shall mean a form of trading conducted primarily over an electronic or telecommunications interface, system, or network. This may include, but not be restricted to, the internet, WANs and LANs, dedicated communications links, telephone and telecommunication networks (including land line, mobile, or satellite links), telecommunications message services, and such like. It also encompasses manually conducted requests or applications entered into an electronic system or network.
- 'Real Monetary Currency' shall mean a recognised currency of a nation or region of the world.
- 'Share' can be construed broadly to denote a part entitlement to a commodity, and can include 'stocks' and 'shares' in the traditional sense.
- 'Transaction Agent' shall refer to a party or entity overseeing or conducting a transaction process on behalf of others.
- 'Transaction Commission' shall refer to a commission taken by the transaction agent for services in relation to a transaction process or related services.
- Transaction Funds' shall refer to currency or funds of a monetary value for use in paying services relating to a transaction process.
- Transaction Process' shall refer to the process of conducting a transaction.
- the transaction process shall not be completed until a transaction is legally finalised.
- the transaction process shall continue throughout the bidding process and shall not end until at least the auction has been won and confirmed.
- the transaction process may be deemed in most cases to begin when a first offer for purchase has been made on a commodity, though in some instances the transaction process may be considered to begin earlier - such as when a commodity is first offered for sale.
- 'Transaction' shall refer to anything where ownership is to be traded for some form of consideration.
- ' Transactor' shall refer to someone involved in a transaction process, and will typically include parties such as 'bidder', 'seller', 'purchaser'.
- Figure 1 is a schematic chart of a preferred embodiment showing initial public offering of shares
- Figure 2 is a flowchart of a preferred embodiment of a share request process
- Figure 3 shows a preferred form flowchart for trading in shares
- Figure 4 shows a preferred form flowchart for trading in shares with funds lockdown
- Figure 5 shows a preferred form user interface by which account holders interact with trading facility accounts
- Figures 6 & 7 show a preferred form user interface enabling share request
- Figure 8 & 9 show a preferred form user interface enabling funds payment
- Figure 10 shows a preferred form user interface displaying a share request
- Figure 11 shows additional share requests by the user
- Figures 12, 13 and 14 show a preferred form user interface for sale by auction
- Figure 15 shows a preferred form share sale method
- Figure 16 shows a preferred form method including share lockdown
- FIGS 17, 18 and 19 shows further flowcharts of preferred form methods of the invention.
- commodities comprising interests in sports heroes, teams, or sports or interest are created and able to be bought or traded.
- These commodities may be created by legal means, perhaps be creating a company or corporation around an entity such as a team, sportsperson, racing animal, racing vehicle, an event, and so forth.
- sponsorship associated with naming rights, this enables individuals and entities to acquire and trade interests, with or without any benefits such as naming rights (some rights or benefits may be acquired depending on the degree or value of interest you have acquired). For many individuals, acquiring an investment which will increase in value is of less importance than contributing to their favourite team (etc.), and the present system intends to cater for this need.
- Figure 1 shows a preferred form initial public offering of shares. After incorporation, the system uses an on-line request process to offer shares to the public. Funds are raised on a best efforts basis and in the event that a share offer is not fully subscribed, all funds in the IPO trust account are returned to registered users of the site.
- Trading system 100 includes a trading facility processor 110.
- Processor 110 includes suitable processing software implemented on a computing device. Individual traders hold a trading facility account 120 and make a request for shares using a requesting device 130.
- Requesting device includes a credit card payment gateway, a user bank account payment gateway, cheque or telephone.
- the system further includes an IPO trustee account 140 a share offering 150, and a share registry 160. It is envisaged that trading facility account holders are informed of share offerings prior to members of the public. Account holders then request a parcel of shares. . It is expected that there is a minimum number of shares or block size that can be requested by such account holders. Account holders must view an investment statement prior to making a request and must further have access to a prospectus. It is expected that there be a fixed number of shares made available to trading facility account holders.
- account holders are not charged a commission for shares requested.
- the commissions are instead paid by share offering 150.
- Shares are typically distributed first to account holders then members of the public on a first come first served basis.
- the processor 110 tallies the number of shares requested at any given point in time. A share offer is considered over subscribed if at the time the offer is closed, the total number of shares requested is greater than the number of shares on offer. In this event all share requests that fall outside of the number of shares available are flagged as unsuccessful by the system.
- Trading facility account holders are able to change or cancel their share request prior to the share offer close date. After the offer close date requests cannot be withdrawn. Additional shares requested by trading facility account holders are treated as a new request by the system and are placed in the system request queue accordingly. Decreases in the number of shares requested or share requests cancelled by trading facility account holders move outstanding requests immediately below the decreased or cancelled request up the system queue.
- Trading facility account holders are informed by electronic means such as email as to the status of their share request at the share offer close date.
- System 100 is funded by taking a percentage of the funds raised.
- Figure 2 shows a preferred form flow chart of the share request process.
- the account holder first places an initial request.
- the request is queued 210. Most items in the queue will be requests placed by other account holders.
- the system may include a security portion to deal with dishonoured purchase offers. The security portion is further described below.
- shares are transferred to the account holder 240. If payment has not been cleared the account holder is notified that share request is unsuccessful 250.
- the change request decreases the number of shares 260 then the decreased share request retains its place in the queue 265 and a refund is made of the cash balance 270.
- the change request can also be cancelled by the account holder 285.
- shares may be created for sale to traders in the system. Such shares may be used to gather revenue, as well as creating a tradable commodity for traders. This can be used also to reduce the reliance on sponsorship funding for many sportspeople, and teams, providing another source of revenue generation.
- the first method is an auction facility.
- the second method is a traditional exchange facility.
- a Formula One racing driving may have just signed to that the Formula One from GP2. This is good news for the driver. If a person had brought shares in that driver at the initial offering price of say US$1 there will now be buyers that are prepared to pay US$2 for those shares. The share holder may decide to use this opportunity to sell the shares and make a capital gain. Another trading facility account holder may want to buy these shares because they believe the driver will have a big future in motor sport, perhaps with the potential to eventually sign with the top Fl team.
- FIG 3 shows a preferred form process for trading in the above shares with an option process.
- a seller 300 lists the seller's shares for sale on-line, thereby creating an auction listing 305.
- Sellers attract bids through other users.
- Sellers can list the shares at auction either with or without a reserve. If a reserve or minimum sale price is reached by the close of the auction, the shares are transferred to the highest bidder.
- the system first checks to make sure there are sufficient shares in the seller's account 310. This checking forms part of a security portion that is further described below. If there are sufficient shares, the shares are locked 315 so that they are not available for other trades. The locking process is further described below.
- a further method of trading shares is by using a traditional exchange facility. This is similar to a regular stock exchange. Users bid for shares that have been offered for sale by other account holders in a manner similar to trading on a stock exchange like the NZX, NYSE or Nasdaq using an online broker.
- the auction process For many people, the auction process generates excitement and is perhaps simpler to understand. On the other hand, there are slightly lower fees associated with using the Trading Facility. In addition, they may wish to buy shares that are not currently available for sale by auction. In this situation, by placing a bid for the shares on the Trading Facility, even if no sellers currently exist, they may tempt a potential seller to make a sale.
- Another advantage to using the Auction process is that, in some cases, there may be quite a large difference between the price that people are prepared to pay for a block of shares and the price that the seller wants. This may mean the shares are unable to be sold quickly on the Trading Facility, the market is "thin" and the shares just sit there with little chance of a sale being made. Once again, in this situation, a seller may prefer to list their shares for sale by Auction.
- a sports entity may create shares based around a person, a team, an event, a vehicle to be raced, or for a particular purpose. For instance, in Formula One Racing, shares may be issued to generate revenue for a particular driver to buy a drive in a particular race - allowing that driver to be able to compete. For amateur sports entities, revenue may be generated to cover travel costs to an event. There are a wide range of possibilities, the appeal to a prospective trader being that they are assisting their chosen sports entity.
- Tradable commodities need not be restricted to shares, and may include other commodities such as merchandised goods, rights and benefits, and so forth. Rights and benefits may also be provided to owners of certain commodities such as shares (though there may be a minimum ownership level, or levels of benefits). These may include benefits otherwise unattainable. Some possible benefits may include: commentaries by coaches or trainers (particularly of use in sports for which betting is allowed (e.g. the horse racing industry), commentaries by the sportspersons, vouchers and reduced rates for attending events, reduced rates of merchandised products, products exclusive to share holders, etc.
- One embodiment includes a security portion, particularly as it may often relate in the context of addressing dishonoured bids or purchase offers.
- This portion of the invention is relevant to all types of electronic, and semi-electronic trading. It is envisaged that it will be particularly useful for the trading of intangible or readily disposed commodities, such as will often be the case in many embodiments of the present invention.
- the security portion primarily comprises analysing a buyer's request for a particular purchase to determine whether they have sufficient funds to make the purchase offer and complete the transaction if accepted.
- the buyer will have at least one account in the system, in which trading 'consideration' is or can be held.
- Consideration in an account may be converted to a common denominator or currency, particularly for comparative purposes. For instance, say the US$ is the default currency, then accounts loaded with other currencies may have their held commodities converted to US$ for the purpose of trading and performing of the invention - though such conversions may be transparent to the actual user. Where other types of consideration are held, e.g.
- a nominal value which may, for instance, be the current market value on a predetermined stock exchange or relevant market
- More than one default currency (or denominator) may be provided.
- Other denominators may comprise particular types of shares, goods, or be linked against particular commodities (e.g. gold or precious metals, etc.).
- the nominal value may be determined a number of ways. Where the consideration in question is a commodity which is traded in the system, then the nominal value may be determined based on past trading values of the commodity. Corrections may be made for anomalous transactions (e.g. uncharacteristically high values), which might be artificially created by a trader. For currencies, current exchange rates may be applied. Options exist for service providers conducting currency transactions to be part of the system, or interfaced thereto. Traders could then shop for the best currency exchange deal for converting to other currencies. This may be extended to service providers willing to convert certain other tradable commodities into a currency, or to provide a valuation for the purpose of trading. Again a commission may be charged for such services.
- anomalous transactions e.g. uncharacteristically high values
- a determination will be made as to whether a prospective buyer has sufficient consideration (which may be based on the value of considerations in the account converted to a common currency) to make the purchase.
- a limitation may also be placed (either by the system, or the seller) as to the types of consideration to be used for making a particular purchase. If the prospective buyer has insufficient consideration of the right type to make the purchase, the application to buy is declined and the prospective buyer typically informed of the reason
- the seller may be informed, particularly if the prospective buyer is offering consideration of the wrong type, to check whether they might be interested.
- the system may also allow a prospective buyer to make offers outside the normal criteria (which may be listed by the seller) for consideration by the seller. If accepted, then the offer will be converted into a possible transaction, the result being dependent upon whether this is an outright sale, or auction scenario.
- An optional additional step is to verify that the seller also possesses the goods they have offered for sale. Where these are types of commodities which can be readily held in an account (particularly shares, currency, rights, and many intangibles), then the system can verify that the actual commodities are available for sale. If they do not exist in the account of the seller (this may also be a different type of account purely or predominantly for the selling of commodities) then the ability to list the sale in the system may be refused.
- the system may interrogate them about the items, or even require them to communicate with a third party which can verify at least one of: the existence of the goods, the quality or order of the goods, the true ownership of the goods and/or a valuation.
- a third party which can verify at least one of: the existence of the goods, the quality or order of the goods, the true ownership of the goods and/or a valuation.
- Such verification which may be in the form of a certificate or title, may be required by the system before such commodities are listed in the system.
- any request for listing a sale may be refused by the system.
- the system determines that the prospective purchaser has sufficient consideration in their account to make the purchase, and that it is a viable offer, then it will lock down the consideration (used to make the transaction) so that it cannot be withdrawn or used for other purchases or trades. This ensures that the funds are available to complete a transaction, and solves the problem of dishonoured bids and offers through non-payment.
- One embodiment provides the ability to lock down shares while the trade is in place. This locked down process ensures that buyers are confident that the shares listed for sale are in the seller's account and that the auction can be completed successfully. If the auction closes without reserve being met the shares are unlocked and made available for other trades. Listing and bidding for shares at auction is deemed to be a legally binding contract.
- Commodities being sold may be locked down to ensure that they are not sold elsewhere, transferred, or made unavailable for a purchaser. This does not preclude the seller following a set of procedures to unlock commodities by requesting withdrawal of the sale, offer, etc. The system ideally then checks whether such withdrawal is legitimate (particularly if an offer has been made), and informs appropriate parties, etc.
- 'locked down' in this context merely means that the consideration required for the transaction is not available for use by the prospective buyer or anyone else. This also applies to commodities to be sold, when they are 'locked down'. The consideration and/or commodities may be removed to a separate holding account, or merely electronically ear-marked by the system as not being available.
- the consideration will remain locked down until one or more events occur.
- events may differ in different embodiments, or scenarios (e.g. auction vs. fixed price offers, criteria listed by the seller, criteria imposed by the system, etc.).
- the common events may be as follows:
- the prospective buyer withdraws their application to purchase. In some trading scenarios, this may not be permitted;
- the seller releases or rejects the buyer's offer. In some trading scenarios, this may not be permitted;
- Such rules may be legally based (e.g. currency movement or trading restrictions from, into, or between certain countries; non compliance with licensing restrictions etc.);
- the system may include provisions to ensure that tangible commodities are safely received before consideration is released. There is an option for service providers to provide this service, such providers perhaps also taking care of delivery.
- additional consideration may be locked down to cover certain charges and fees.
- This may be on the part of the seller and/or the prospective purchaser, and may cover things such as: transaction agent commissions, taxes, duties, freight and transport.
- the transactor(s) may be required to lock down transaction funds. These funds can then be drawn upon to pay the necessary additional costs related to the transaction.
- These transaction funds may comprise a real monetary currency, or could comprise purchased artificial credits, points, artificial currency etc. These may also be held in another account of the transactors (other than that holding the commodities or consideration involved in a transaction).
- funds are locked by the system when trades are in progress in addition to the share lockdown outlined above.
- This alternative embodiment is particularly suitable when integrating the system with third party exchanges or betting facilities. It is also useful where the preferred embodiment of the system is for users to maintain an account with the system itself. In this configuration of the system, users maintain cash positions in the system that mirror that of that betting facility or system account.
- the system maintains and displays a real time record of respective cash balances.
- the system ensures that sufficient funds are available in third party or system accounts prior to placing a trade or making a request for shares.
- the system locks funds inclusive of any commissions or fees while a share request is in progress or the user is the current high bidder at auction.
- Locked down funds are not available for other trades. If a request is cancelled or decreased, the funds are unlocked by the system and made available for other trades. If outbid at auction the funds are unlocked by the system.
- FIG 4 shows a preferred form process with funds locked down.
- a buyer 400 views an auction description at a website home page for example at 405.
- the user views an auction listing 410.
- the user places a bid 415.
- the amount of value in the bid is checked against sufficient funds available from the buyer 420. If there are insufficient funds then a check is made to see if the buyer has made a new bid 425. If the buyer has made a new bid then that bid is placed 415 otherwise the buyer returns to the auction listing 410.
- the amount of the bid is checked against a minimum bid 425. If the amount is greater than or equal to a minimum bid then bid confirmation 430 is sought. If the bid is not confirmed then the user is returned to the auction listing 410.
- the bid is not the current highest bid 440 then the funds are released 445.
- the reserve is met 445, and auction is closed 450 then that buyer is the winner of the auction 455 and shares are transferred to the buyer and the buyer commission is deducted 460.
- the system checks 425 for a new bid.
- the bids are rechecked 440 to find the highest bid. If a user is the current bidder in an auction, the funds required to complete the trade, inclusive of commissions and fees, are locked down by the system and not available for other trades.
- Figure 5 shows a preferred form user interface by which account holders interact with trading facility accounts. As shown in the figure, no shares are currently owned and no funds are currently assigned to initial offers.
- a user selects an initial share offering by selecting a share symbol for that offering.
- One method of selecting a share symbol is to click on that symbol using a pointing and selecting device for example a mouse.
- the initial offering shows an offer close date, an offer price, the amount of shares offered and the offer of a prospectus.
- the account holder requests shares for example 1,000 shares in the selected offering. The user is then provided with the option of submitting a request.
- the account holder initiates a payment to the trustee account for that particular share offer.
- the user is emailed a receipt for the transaction.
- Funds can be transferred as needed to buy shares.
- Figure 9 shows a confirmation provided to the user that funds for the share request have been received and that the request has been queued in the system.
- FIG. 11 shows the user requesting an additional 1,200 shares. If additional shares are requested then additional funds are transferred to the trustee account for that particular share offer. If the request is successful, the shares are transferred to the account holder.
- Figure 12 shows a typical listing an account holder prepares. The user selects a symbol and name. The user specifies a block size, a reserve price, a buy now price, a minimum bid increment, an auction close date and optionally a bank account. Once the user has prepared the listing the user submits the listing details.
- Commissions can be taken as appropriate. This may be at the time of transaction completion. There may be a listing fee for listing a sales offer. Additional fees may be charged or collected on behalf of third party providers. Currency exchange may be recalculated at the time of transaction completion and appropriate commissions deducted where appropriate. As can be appreciated, various fees and commissions may be extracted at various stages of the process.
- the consideration can be transferred as appropriate. Where appropriate it may be a simple transfer from the purchaser's account to the seller's account. It may also be, for example, transfer to an escrow account, an account of an agent of the seller, a nominated different account of the seller, and/or a temporary holding pending transfer to the seller or a nominated agent thereof.
- the security portion of the present invention may be simply stated (for most cases) as providing for either or both of the securing of consideration used in a transaction offer, and commodities offered for sale in a transaction offer, wherein they cannot be released until the transaction is completed or otherwise fails (e.g. withdrawn, rejected, etc.). While relatively simple in explanation, these steps and options have the potential to address a significant issue - dishonoured bids and transactions - affecting many types of transactions conducted through trading and auction sites. Mention has been made about certain restrictions which may affect a transaction. These may be trading rules applying to users of the system, through to legal restrictions. For instance, trading rules may prevent certain types of commodities to be exchanged - e.g. offensive, or dangerous goods. These rules may also cover conduct, and attempts at dishonesty. These can also affect a registrant's right to continue to participate and be registered.
- certain criteria may prevent certain transactions not permitted across international boundaries. For instance, some countries have restrictions on funds and currencies which may be taken across their borders (physically or electronically), or on what can be sold or exported. Others may have restrictions preventing certain types of technologies from being sold into particular jurisdictions.
- Licensing restrictions can be another area.
- the system may also for licensors to enter licensing restrictions to ensure that certain types of commodities cannot be sold into, or exchanged between, certain jurisdictions.
- Such a service may be dependent on authorised licensors entering their restrictions, most likely in a particular format.
- a significant amount of the commodities likely to be traded may be subjected to licensing, or character merchandising.
- the security portion can be quite flexible and expandable, and can potentially include (or may be implemented as a separate module) a variety of checking criteria to govern transactions.
- An extended portion of the invention introduces new types of trading and commodities, potentially to a larger interested audience than already participate in on-line or electronic trading.
- the security portion previously mentioned is an integral part in preferred embodiments, where it can increase the degree of security, trust, and confidence, though lesser preferred embodiments may be absent this feature.
- the invention as thus far described may take many forms and is quite flexible in how in can be implemented. It is envisaged that such commodities will be best traded and offered electronically. It is open to sports related activities and entities, and may be incorporated with electronic betting systems to afford seamless interaction. Some benefits may be offered to share-holders or members of the trading system, such as being able to use consideration in their account for placing bets. The system may also be extended to allow members to buy relevant information (e.g. racing form, track condition, profiles, etc.) though may be restricted to shareholders. Again such knowledge and information can be another tradable or purchasable commodity.
- relevant information e.g. racing form, track condition, profiles, etc.
- figure 15 illustrates a preferred example of a security enhancing method according to the present invention.
- the purchaser will generally make an offer 1500, be it in a fixed price, minimum price or auction scenario etc.
- the system will optionally but preferably check that there is no reason or restriction preventing a transaction to be made. If the transaction is potentially viable 1505, it will be checked that the prospective buyer has sufficient funds or consideration to complete the transaction 1510. This step may be performed prior to a transaction viability step, or both before and prior (possibly considering different criteria or restrictions).
- the consideration will remained secured unless outbid or the transaction cancelled (1520, 1525). If the bid remains highest at the completion of the auction 1520, then the transaction will be completed, possibly being dependent on further checks by the system. If it is a successful transaction 1530 then the consideration and commodities are transferred 1535 as may be appropriate.
- the exact steps and sequence may vary in different embodiments, though will still retain steps to ensure that the correct consideration is available and remains available until the transaction is either completed or cancelled.
- the system will typically also take a commission when a successful transaction is made, though may still extract a commission in some other circumstances.
- Figure 16 illustrates a typical scenario for when commodities are locked down.
- the seller may be required 1605 to obtain a certificate 1610 detailing characteristics such as value, condition, true ownership and title, etc. This will typically be by a third party accredited or authorised by the system.
- Goods for sale are then locked down 1615 while a transaction or sale offer is in place 1620.
- the commodities may be locked down by the system, similar to funds or considerations for a prospective purchaser.
- the goods may be held by a third party authorised or accredited to the system. If the transaction can be completed 1625 then consideration is transferred 1630 otherwise the commodities are released 1635.
- This scheme applies a similar process flow to online auctions, particularly those involving any type of security, ticket, or tradable blocks of rewards points (e.g. Airline miles).
- rewards points e.g. Airline miles
- the method of the present invention may be implemented by existing transaction agents, including existing on-line auction systems, share and stock market trading, and virtually any other transaction based system for the transaction of commodities.
- This example relates to a particular application of the present invention as it may be applied to commodities.
- non-standard commodities have been used as examples.
- drivers and teams incorporate, issue shares in these companies and then make those shares available to the public via an online request process such as according to the invention as described in example 1.
- system is implemented as a web based platform for fans worldwide to trade existing shares based on the performance of drivers and teams. This adds a big '"down at the pub factor" and a new dimension to the motorsports fan's experience as they monitor the performance of their share portfolio.
- Buyers ideally first have an account within the system. They can then simply log on to their account to register their interest or, alternatively, they may call a customer service representative using an 0800 number. As long as there are sufficient funds in their account to cover the shares they are interested in buying they will be allocated shares on a first come first serve basis.
- Buyers can change the details of their share request or cancel their request at any time prior to the close of the initial offering. Buyers will be informed by email as to the success of their request the day the initial offering closes. Funds required to cover any outstanding requests will not be available for other trades. After the offer close date requests cannot be withdrawn.
- the auction process is similar to buying a block of tickets on auction sites like eBay. However, in this case, you are buying a block of shares in a Driver or Team. Sellers list their shares for sale online and attract bids from other users. Sellers can list shares at Auction either with or without a reserve. All users who bid on a seller's shares must have sufficient funds in their account in order to place a bid. This means sellers can be assured of payment. Providing the reserve (minimum sale price) is reached by the close of the auction, the shares will be transferred to the highest bidder. Details of the process can be seen in example 1.
- a crucial difference between this and other auction sites is that it monitors all transactions. It ensures that sellers have the shares they have listed for sale in their account. Similarly, it ensures that all bidders for shares have sufficient funds in their account to cover their auction bid. Funds allocated for outstanding bids are locked down and are not available for other trades until the user is outbid by another user. Similarly shares for sale are also locked down and are not available for other trades.
- Bidding at auction is set up to be deemed to be a legally binding contract.
- An Information Memorandum is a document providing a description of the Driver or Team and the terms of the deal being offered to future shareholders, and is ideally accessible to prospective transactors.
- the aim with this market niche is to enable racing fans to experience the thrill of horse ownership and at the same time help deserving breeders and trainers go racing.
- any monies received for the sale of the horse will be reimbursed to shareholders. It is hoped that partnering with the TAB will provide a mechanism for share account management via racing fans' existing TAB accounts. Existing shares will once again be able to be traded via Auction or a Trading facility similar to using an online brokerage.
- America's cup funding is an obvious choice. Potential monetary returns to shareholders would likely include a percentage of income from merchandise, film and book rights for the team as a whole and also for individual team members. Shareholders would also likely receive a percentage of future contracts negotiated by individual team members. Non monetary rewards for shareholders would again include exclusive access to the team, events, merchandise and data.
- Non monetary rewards would again include exclusive access to the band, shows, merchandise and new releases. Shares would be traded based on up and coming releases, hits, tours and band notoriety. Again, careful drafting of the shareholders agreement and understanding of this agreement by shareholders would be key, however non monetary rewards for shareholders may be a bigger driver of investment.
- One interesting potential driver of web site traffic would be a daily Top 40 based on Band Market Capitalization or value of shares issued.
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- Business, Economics & Management (AREA)
- Finance (AREA)
- Accounting & Taxation (AREA)
- Marketing (AREA)
- Development Economics (AREA)
- Economics (AREA)
- Entrepreneurship & Innovation (AREA)
- Strategic Management (AREA)
- Physics & Mathematics (AREA)
- General Business, Economics & Management (AREA)
- General Physics & Mathematics (AREA)
- Engineering & Computer Science (AREA)
- Theoretical Computer Science (AREA)
- Financial Or Insurance-Related Operations Such As Payment And Settlement (AREA)
- Management, Administration, Business Operations System, And Electronic Commerce (AREA)
Abstract
Description
Claims
Priority Applications (2)
Application Number | Priority Date | Filing Date | Title |
---|---|---|---|
AU2007261774A AU2007261774A1 (en) | 2006-06-19 | 2007-06-19 | Improved method and system for transacting commodities |
NZ574208A NZ574208A (en) | 2006-06-19 | 2007-06-19 | Improved method and system for transacting commodities |
Applications Claiming Priority (2)
Application Number | Priority Date | Filing Date | Title |
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NZ54803206 | 2006-06-19 | ||
NZ548032 | 2006-06-19 |
Publications (2)
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WO2007148995A2 true WO2007148995A2 (en) | 2007-12-27 |
WO2007148995A3 WO2007148995A3 (en) | 2008-06-26 |
Family
ID=38833878
Family Applications (1)
Application Number | Title | Priority Date | Filing Date |
---|---|---|---|
PCT/NZ2007/000162 WO2007148995A2 (en) | 2006-06-19 | 2007-06-19 | Improved method and system for transacting commodities |
Country Status (3)
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AU (1) | AU2007261774A1 (en) |
NZ (1) | NZ574208A (en) |
WO (1) | WO2007148995A2 (en) |
Citations (3)
Publication number | Priority date | Publication date | Assignee | Title |
---|---|---|---|---|
JP2002259873A (en) * | 2001-02-27 | 2002-09-13 | Nec Soft Ltd | Escrow system, method and program |
US6865559B2 (en) * | 2000-12-07 | 2005-03-08 | International Business Machines Corporation | Method and system in electronic commerce for inspection-service-based release of escrowed payments |
US20060025208A1 (en) * | 2004-07-27 | 2006-02-02 | Kirt Ramsey | Sports wagering method and system |
-
2007
- 2007-06-19 AU AU2007261774A patent/AU2007261774A1/en not_active Abandoned
- 2007-06-19 NZ NZ574208A patent/NZ574208A/en not_active IP Right Cessation
- 2007-06-19 WO PCT/NZ2007/000162 patent/WO2007148995A2/en active Application Filing
Patent Citations (3)
Publication number | Priority date | Publication date | Assignee | Title |
---|---|---|---|---|
US6865559B2 (en) * | 2000-12-07 | 2005-03-08 | International Business Machines Corporation | Method and system in electronic commerce for inspection-service-based release of escrowed payments |
JP2002259873A (en) * | 2001-02-27 | 2002-09-13 | Nec Soft Ltd | Escrow system, method and program |
US20060025208A1 (en) * | 2004-07-27 | 2006-02-02 | Kirt Ramsey | Sports wagering method and system |
Non-Patent Citations (2)
Title |
---|
'BBC - Spotdaq - How To Play', [Online] Retrieved from the Internet: <URL:http://www.bbc.co.uk/sportdaq/insideline/howtoplay.shtml> * |
DATABASE WPI Week 200278, Derwent Publications Ltd., London, GB; Class T01, AN 2002-717029 & JP 2002 259873 A (NIPPON DENKI SOFTWARE KK) 13 September 2002 * |
Also Published As
Publication number | Publication date |
---|---|
AU2007261774A1 (en) | 2007-12-27 |
NZ574208A (en) | 2012-03-30 |
WO2007148995A3 (en) | 2008-06-26 |
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