WO2014177599A1 - Commodity and liquidity platform (clip) - Google Patents

Abstract

Methods and systems described the use of a commodity and liquidity platform (CLiP) for a Commodity Murabaha transaction. Features of the systems and methods described herein include a central computer processing platform that receives an enquiry from a first entity (e.g., trader) for an amount and commodity based upon a proposed transaction with a second entity (e.g., purchaser), provides an offer from a third entity (e.g., supplier), provides for the sale of the commodity to a second entity (e.g., purchaser), and provides for the sale of the commodity from the second entity to a fourth entity (e.g., dealer). A financial services provider and supplier can facilitate these steps and process credits and debits accordingly. During this computer-implemented transaction, the system can track the movement of funds and the commodity to allow for auditing and compliance.

Description

COMMODITY AND LIQUIDITY PLATFORM (CLiP)

FIELD OF THE INVENTION

[0001] This invention relates generally to a computer-implemented solution for conducting Commodity Murabaha transactions in accordance to Sharia'a principles.

BACKGROUND

[0002] Financial institutions regularly exchange cash liquidity as interbank loans to cover liquidity shortages, regulatory requirements or simply to cover specific funding risks. For those lending liquidity, it brings profits in the form of interest paid by the lender. The practice is recognized as part of a well functioning and efficient banking system.

[0003] For Islamic banking, the involvement of interest in this exchange mechanism prevents Sharia'a (Islamic moral code and religious law) compliant institutions from participating in this liquidity pool. Hence, there is a lack of Sharia'a compliant liquidity servicing the Islamic finance industry today.

[0004] For the exchange of cash liquidity in Islamic banking, the main tool is the

Commodity Murabaha transaction structure. Different opinions in the Islamic Finance industry exist on the suitability of the way the Commodity Murabaha transaction is being used for liquidity management. Certain Sharia'a scholars have raised concerns on the practices and as a result, many organizations have been trying to innovate new mechanisms within the Commodity Murabaha transaction.

[0005] Whilst commodities have traditionally been used, any Sharia'a compliant identifiable asset can be used for the purposes of conducting Murabaha. Any reference herein to a commodity or commodities generally or generically is intended to include any Sharia'a compliant asset.

[0006] For many years, organizations have made efforts to launch into the Islamic finance arena various structured transactions to provide workable instruments to facilitate Sharia'a compliant liquidity. To date, there has been no realistic alternative that has reduced the dependency on the incumbent Commodity Murabaha structure. By popularity, the transactional principles of the Commodity Murabaha are desired and financial institutions are comfortable with its mechanism; but opportunities exist to improve aspects of its compliance with Sharia'a principles. SUMMARY

[0007] Methods and systems describe the use of a commodity and liquidity platform

(CLiP) for a Commodity Murabaha transaction. Features of the systems and methods described herein include a central computer processing platform that stores data on commodities available at the time of an enquiry by a first entity (e.g., trader) for an amount and commodity based upon a proposed transaction with a second entity (e.g., purchaser) provided on a regular basis by a third entity (e.g. supplier), such that in completing the enquiry form, the platform selects and informs the first entity through selection criteria optionality of the types of commodities available for transactions at that time enabling the first entity to tailor its enquiry for commodities of a type approved by its Sharia'a compliance requirements enabling the first entity to request an offer from the third entity to sell commodities matching the type and in the amount of the principal amount (cost price) of the Commodity Murabaha transaction undertaken with a second entity, that upon receipt of the request to get an offer matching the elements of the enquiry the platform searches through available commodities stored in the system and sales prices in respect of each commodity specified by the third entity (entities) and calculates the best fit of commodities and sale prices and generates and issues an offer, on behalf of the third entity, to sell allocated commodities of the type requested in the get an offer enquiry for a price equal to the principal amount (cost price) by rounding up the per unit price specified by the third entity to match the principal amount, that upon acceptance provides an offer to sell commodities to a second entity, that upon acceptance of the offer from the first entity by the second entity provides that the second entity can offer to sell the commodities to a fourth entity (e.g. dealer). A financial services provider (e.g. bank) and the supplier can facilitate these steps and process credits and debits in the cash and commodity accounts accordingly. During this computer- implemented transaction, the system can track the movement of funds and the commodity to allow for auditing and compliance.

[0008] In one embodiment, a computer-implemented method for conducting a

Commodity Murabaha transaction comprises receiving, by a computer, an input from a trader for a proposed amount and a commodity; generating, by the computer, an enquiry based on the input from the trader for a proposed transaction with a purchaser for a predetermined tenor and profit rate; determining, by a computer, whether commodities are available to match the proposed amount of the enquiry and what commodity types are available; presenting, by the computer, a request to a supplier for an offer based upon the enquiry from the trader; receiving, by the computer, an offer from the supplier; receiving, by the computer, an input from the trader indicating an acceptance of the offer; processing, by the computer, a payment from the trader to the supplier for purchase of the commodity; processing, by computer, a transfer of ownership of the commodity from the supplier to the trader; presenting, by the computer, an offer to sell the commodity to the purchaser; receiving, by computer, an input from the purchaser indicating an acceptance of the offer to sell the commodity; processing, by computer, a transfer of ownership of the commodity from the trader to the purchaser; presenting, by the computer, an offer to a dealer comprising an offer from the purchaser to sell the commodity; receiving, by computer, an input from dealer indicating an acceptance of the offer to sell the commodity to the dealer; processing, by the computer, a payment from the dealer to the purchaser for purchase of the commodity; and processing, by computer, a transfer of ownership of the commodity from the purchaser to the dealer.

[0009] In another embodiment, a computer-implemented method for conducting a transaction comprises receiving, by a computer, a message comprising an enquiry from a first entity for an amount and a commodity; automatically transmitting, by a computer, upon the account of the first entity being in receipt of funds, an instruction for payment from the first entity for purchase of the commodity from a second entity; processing, by a computer, a transfer of ownership of the commodity to the first entity; transmitting, by the computer, a message comprising an offer to a third entity for the commodity; processing, by the computer, a transfer of ownership of the commodity to the third entity; transmitting, by the computer, a message comprising an offer to a fourth entity for the commodity; automatically transmitting, by the computer, an instruction for payment from the fourth entity for purchase of the commodity; and processing, by the computer, a transfer of ownership of the commodity to the fourth entity.

[0010] In yet another embodiment, a system for conducting a Commodity Murabaha transaction comprises a central processing platform comprising a processor and a computer- readable storage medium, the central processing platform configured to receive a message comprising an enquiry from a first entity for an amount and a commodity; transmit a message comprising an offer from a second entity to sell the commodity to the first entity; transmit a message to process a payment from the first entity for purchase of the commodity from a second entity; transmit a message to process the transfer of ownership of the commodity to the first entity; transmit a message comprising an offer to a third entity for the commodity; transmit a message to process the transfer of ownership of the commodity to the third entity; transmit a message comprising an offer to a fourth entity for the commodity; transmit a message to process a payment from the fourth entity for purchase of the commodity from a third entity; and transmit a message to process the transfer of ownership of the commodity to the fourth entity.

[0011] Additional features and advantages of an embodiment will be set forth in the description which follows, and in part will be apparent from the description. The objectives and other advantages of the invention will be realized and attained by the structure particularly pointed out in the exemplary embodiments in the written description and claims hereof as well as the appended drawings.

[0012] It is to be understood that both the foregoing general description and the following detailed description are exemplary and explanatory and are intended to provide further explanation of the invention as claimed.

BRIEF DESCRIPTION OF THE DRAWINGS

[0013] The methods, systems and/or programming described herein are further described in terms of exemplary embodiments. These exemplary embodiments are described in detail with reference to the drawings. These embodiments are non-limiting exemplary embodiments, in which like reference numerals represent similar structures throughout the several views of the drawings, and wherein:

[0014] Figure 1 illustrates a conventional Commodity Murabaha transaction.

[0015] Figure 2 illustrates a CliP transaction structure according to an exemplary embodiment.

[0016] Figure 3 illustrates a method for performing a CLiP transaction according to an exemplary embodiment.

[0017] Figure 4 illustrates a graphical user interface according to an exemplary embodiment.

[0018] Figure 5 illustrates a graphical user interface according to an exemplary embodiment. [0019] Figure 6 illustrates a graphical user interface according to an exemplary embodiment.

[0020] Figure 7 illustrates a graphical user interface according to an exemplary embodiment.

[0021] Figure 8 illustrates a graphical user interface according to an exemplary embodiment.

[0022] Figure 9 illustrates a graphical user interface according to an exemplary embodiment.

[0023] Figure 10 illustrates a graphical user interface according to an exemplary embodiment.

[0024] Figure 11 illustrates a graphical user interface according to an exemplary embodiment.

[0025] Figure 12 illustrates a graphical user interface according to an exemplary embodiment.

[0026] Figure 13 illustrates a graphical user interface according to an exemplary embodiment.

[0027] Figure 14 illustrates a graphical user interface according to an exemplary embodiment.

[0028] Figure 15 illustrates a graphical user interface according to an exemplary embodiment.

[0029] Figure 16 illustrates a graphical user interface according to an exemplary embodiment.

[0030] Figure 17 illustrates a graphical user interface according to an exemplary embodiment.

[0031] Figure 18 illustrates a graphical user interface according to an exemplary embodiment.

[0032] Figure 19 illustrates graphical user interface according to an exemplary embodiment.

[0033] Figures 20 A and 20B illustrate graphical user interfaces according to an exemplary embodiment. [0034] Figure 21 illustrates a graphical user interface according to an exemplary embodiment.

[0035] Figure 22 illustrates graphical user interface according to an exemplary embodiment.

[0036] Figure 23 illustrates a graphical user interface according to an exemplary embodiment.

[0037] Figure 24 illustrates a graphical user interface according to an exemplary embodiment.

[0038] Figure 25 illustrates a graphical user interface according to an exemplary embodiment.

[0039] Figure 26 illustrates a graphical user interface according to an exemplary embodiment.

[0040] Figure 27 illustrates a graphical user interface according to an exemplary embodiment.

[0041] Figure 28 illustrates a graphical user interface according to an exemplary embodiment.

[0042] Figure 29 illustrates a graphical user interface according to an exemplary embodiment.

[0043] Figure 30 illustrates a graphical user interface according to an exemplary embodiment.

[0044] Figure 31 illustrates a graphical user interface according to an exemplary embodiment.

[0045] Figure 32 illustrates a graphical user interface according to an exemplary embodiment.

[0046] Figure 33 illustrates a graphical user interface according to an exemplary embodiment.

[0047] Figure 34 illustrates a graphical user interface according to an exemplary embodiment.

[0048] Figure 35 illustrates a graphical user interface according to an exemplary embodiment. [0049] Figure 36 illustrates a graphical user interface according to an exemplary embodiment.

[0050] Figure 37 illustrates a graphical user interface according to an exemplary embodiment.

[0051] Figure 38 illustrates a graphical user interface according to an exemplary embodiment.

[0052] Figure 39 illustrates a graphical user interface according to an exemplary embodiment.

[0053] Figure 40 illustrates a graphical user interface according to an exemplary embodiment.

[0054] Figure 41 illustrates a graphical user interface according to an exemplary embodiment.

[0055] Figure 42 illustrates a graphical user interface according to an exemplary embodiment.

[0056] Figure 43 illustrates a graphical user interface according to an exemplary embodiment.

[0057] Figure 44 illustrates a graphical user interface according to an exemplary embodiment.

DETAILED DESCRIPTION

[0058] Various embodiments and aspects of the invention will be described with reference to details discussed below, and the accompanying drawings will illustrate the various embodiments. The following description and drawings are illustrative of the invention and are not to be construed as limiting the invention. Numerous specific details are described to provide a thorough understanding of various embodiments of the present invention. However, in certain instances, well-known or conventional details are not described in order to provide a concise discussion of embodiments of the present invention.

[0059] The systems and methods described herein aim to be a Sharia'a compliant solution for the facilitation of interbank cash liquidity between Islamic Financial institutions with the potential for its further development to provide risk management opportunities. Subject to appropriate Sharia'a approvals, it can also be suitable for other conventional banks.

[0060] A commodity, as described herein, refers to a physical and tangible good or

Sharia'a compliant instrument (whether or not dematerialized) that is transferable to satisfy needs or market wants. In respect to Islamic finance, these are goods that do not contravene Islamic principles and so exclude, for example, gold, alcohol and pork, or instruments not linked to the same. Additionally, the commodities (assets) used must be fully owned and free of third party incumbencies for transactions.

[0061] A Murabaha, as described herein, is a cost plus financing transaction that includes an agreed profit margin, where the payment is deferred for an agreed period of time. A Commodity Murabaha, as described herein, is a purchase and sale of a commodity (asset) on a Murabaha basis that is immediately sold, i.e., on a spot basis, to a third party for cash.

[0062] Referring to FIG. 1, a conventional Commodity Murabaha transaction is shown. A Commodity Murabaha transaction is amongst the most popular instruments currently used for Islamic liquidity management purposes. In this example of a conventional transaction, Bank A has agreed to place money with Bank B for a pre-determined tenor and profit rate. Bank A and Bank B enter into a Commodity Murabaha contract where Bank A asks Bank B to act as its Agent to purchase from a Primary Broker a commodity against the payment of a cash amount. Bank A funds Bank B so that it can purchase the commodity on its behalf. Bank A then sells the property of the commodity to Bank B on deferred payment terms. Bank B then sells the commodity to a Secondary Broker and receives a cash amount, i.e., principal. At maturity, Bank B pays the principal and profit amount to Bank A, i.e., at a deferred sale price.

[0063] In this conventional transaction, these steps involve manual exchanges of paper with no external cash movement between Bank B and the Primary and Secondary Brokers. The only external cash movements occur between Bank A and Bank B where Bank A places funds with Bank B as its agent so that Bank B is funded by Bank A to purchase the commodities on behalf of Bank A. As a result, the method of execution of this structure as a suitable Islamic financial liquidity instrument is open to scrutiny by Islamic scholars for reasons such as: (a) cash does not move independently between all the parties concerned, instead it moves directly between the banks and is exclusive of the brokers trading the assets; (b) change of ownership of the underlying commodities is not always clearly evidenced between the parties; (c) the allocation of actual assets cannot always be proven to exist; and (d) a lack of transaction information lend to audit and transparency issues.

[0064] A commodity and liquidity platform (CLiP) described herein is an internet- delivered technology platform that facilitates a new controlled and transparent Commodity Murabaha transaction structure to provide better alignment to Sharia'a principles. This is achieved by integrating services of independent service providers (asset and financial service provider) within a contractual framework to CLiP, thereby enabling automated CLiP transaction flows for all participants. The framework can facilitate Islamic interbank liquidity management along with risk management opportunities, in accordance with the Sharia'a principles.

[0065] The CLiP platform can be hosted by a bank or another entity. The platform generally comprises at least one computing device, such as a server, which may be coupled to transmit information to and from a database that stores information. Users of the system (e.g., bank, broker, trader, purchaser, supplier, dealer) may access the system through secure means to transmit information to and from the user's computing device over a network (e.g., internet) to the CLiP platform, which comprises a processor and a computer-readable medium (e.g., as a server) for executing the functionality described herein. The CLiP platform may also be communicatively coupled to one or more databases storing records of user accounts, messages, transaction information, and audit details (e.g., listings of messages and payments). The user's computing device may be a server, desktop computer, workstation, laptop computer, tablet computer, personal data assistant ("PDA"), smartphone, or other computing device.

[0066] In one embodiment, a computer-implemented method for conducting a

Commodity Murabaha transaction comprises transmitting, by a computer, a first message comprising an enquiry from a trader for an amount and a commodity based upon a proposed transaction with a purchaser for a predetermined tenor and profit rate; receiving, by computer, a second message comprising information on whether commodities are available to match the proposed amount and if so what commodity types are available; transmitting, by the computer, a third message comprising requesting an offer from a supplier based upon the enquiry from the trader; receiving, by the computer, a fourth message comprising an offer from the supplier or on its behalf to the trader; transmitting, by the computer, a fifth message from the trader comprising accepting the offer, receiving, by computer, a sixth message to supplier comprising the acceptance from the trader of the offer from the supplier; transmitting, by computer a seventh message comprising an offer from the trader to the purchaser; receiving, by computer, an eighth message comprising an offer from the trader to sell the commodities to the purchaser, transmitting, by the computer, a ninth message comprising the acceptance by the purchaser of the offer; receiving, by computer, a tenth message comprising the acceptance from the purchaser of the offer from the trader to sell the commodities to the purchaser; transmitting, by a computer, an eleventh message comprising an offer from the purchaser to the dealer; receiving, by computer, an twelfth message comprising an offer from the purchaser to sell the commodities to the dealer, transmitting, by the computer, a thirteenth message comprising the acceptance by the dealer of the offer; receiving, by computer, a fourteenth message comprising the acceptance from the dealer of the offer from the purchaser to sell the commodities to the dealer; for each spot purchase and sale transmitting, by computer, messages prompting the processing, by computer, a first payment from the trader to the supplier for purchase of the commodity, a second payment from the supplier to the dealer and a third payment from the dealer to the purchaser with, in each case, the financial services provider receiving such messages; for each purchase and sale transmitting, by computer, messages prompting the processing, by computer, a first transfer of ownership of the commodities from the supplier to the trader, a second transfer of ownership of the commodities from the trader to the purchaser and a third transfer of ownership of the commodities from the purchaser to the dealer with, in each case the commodity depositary, custodian or record holder receiving such messages.

[0067] In another embodiment, a computer-implemented method for conducting a transaction comprises receiving, by a computer, a message comprising an enquiry from a first entity for an amount and a commodity; transmitting a message for processing, by the computer, a payment from the first entity for purchase of the commodity from a second entity; transmitting a message for processing the transfer, by the computer, of ownership of the commodity to the first party, transmitting, by the computer, a message comprising an offer to a third entity for the commodity; transmitting a message for processing the transfer, by the computer, of ownership of the commodity to the third party; transmitting a message for processing, by the computer, a payment from a fourth entity for the purchase of the commodity from the third entity; and transmitting a message for processing the transfer, by the computer, of ownership of the commodity to the fourth entity.

[0068] In yet another embodiment, a system for conducting a Commodity Murabaha transaction comprises a central processing platform comprising a processor and a computer- readable storage medium, the central processing platform configured to receive a message comprising an enquiry from a first entity for an amount and a commodity; transmit a message to process a payment from the first entity for purchase of the commodity from a second entity; transmit a message to process the transfer of ownership of the commodity to the first entity; transmit a message comprising an offer to a third entity for the commodity; transmit a message to process the transfer of ownership of the commodity to the third party; transmit a message to process a payment from a fourth entity for the purchase of the commodity from the third entity and transmit a message to process the transfer of ownership of the commodity to the fourth entity.

[0069] Referring now to FIGS. 2 and 3, FIG. 2 illustrates a CLiP transaction system

200 shown according to an exemplary embodiment, and FIG. 3 illustrates a method for performing a CLiP transaction is shown according to an exemplary embodiment. In this example, a trader 210 has agreed to place money with a purchaser 220 for a pre-determined tenor and profit rate. This agreement between trader 210 and purchaser 220 may occur before entering the CLiP platform 200.

[0070] In step 310, trader 210 enquires through CLiP 200 by transmitting a message regarding the availability of acceptable commodities, to the value of the principal amount and CLiP automatically responds to the enquiry during completion of the enquiry so that availability of commodity and type of commodity is populated automatically in response to the optional functionality of the enquiry mechanism. In step 312, trader 210 may transmit a message requesting an offer based upon an amount and a selected commodity. In step 314, supplier 230, who is acceptable to trader 210, transmits a message via CLiP 200 that offers available commodities for purchase. Trader 210 transmits a message via CLiP 200 that the trader 210 accepts this offer. In one embodiment, a single supplier 230 may not have a sufficient amount of commodities to satisfy the request of trader 210. In such an event, CLiP 200 can aggregate commodities available from more than one supplier 230 and aggregate those commodities together with a single reference number. In step 320, trader 210 accepts to purchase the commodity and makes payment to its account at a financial services provider 240 for CLiP 200 to facilitate on value date payment to pay the supplier 230. Financial services provider 240 is a computing device (e.g., a server) communicatively coupled to a user cash accounts database 260 that stores information about the account of the trader 210, supplier 230, purchaser 220, and dealer 250. The financial services provider 240 can be a server of an independent bank providing payments services for users of the platform 200. When a payment is made from one entity to another entity via CLiP, the financial services provider 240 debits an account of the payor and credits the account of the payee.

[0071] As described herein, CLiP can instruct a bank or financial institution to make a payment from one entity to another, and this instruction to make a payment (i.e., credit one account and/or debit another account) is automatically triggered upon the completion of a previous step. For example, when a trader makes a payment to a supplier for purchase of a commodity through CLiP, upon the trader indicating an acceptance of an offer from a supplier and funding its account at the financial services provider, CLiP automatically transmits a message having an instruction to a bank holding an account of the trader to debit the account for an amount of the payment, and CLiP automatically transmits a message having an instruction to a bank holding an account of the supplier to credit the account for an amount of the payment. Each time a payment is facilitated through CLiP, the system can automatically trigger the appropriate requests for instructing payments to and from the accounts.

[0072] In step 330, trader 210 offers to sell the commodity to purchaser 220 who on acceptance takes ownership of the commodity. Trader 210 and purchaser 220 may have already agreed the arrangements for the deferred principal plus profit payments for this transaction and this is conducted outside of the CLiP mechanism 200 on maturity.

[0073] In step 340, purchaser 220 sells the commodity to purchaser's choice of a dealer 250. The dealer 250 makes a payment facilitated by CLiP 200 to purchaser's account held at the financial services provider 240. In one embodiment, outside of CLiP 200, the dealer 250 may choose to sell back to the supplier 230.

[0074] In step 350, at the financial service provider, payment is made from the trader's account to the supplier's account, from the supplier's account to the dealer's account, and from the dealer's account to purchaser's account reflecting payment for each respective purchase of the commodity.

[0075] The financial services provider 240 is an entity that is independent of trader

210, purchaser 220, supplier 230, and dealer 250. At each leg or step of the transaction, CLiP 200 generates and transmits a message to the server of the financial services provider 240 that requests the financial services provider 240 to credit or debit funds accordingly. The server at the financial services provider 240 receives the request and processes the request in an associated database that stores information about the user's accounts. After processing the request, the financial services provider 240 generates and sends a message to CLiP 200 that confirms the processing or identifies that the processing could not be completed. These messages can be generated automatically by CLiP 200 and the financial services provider 240. As a result of these transmissions, messages, and confirmations, the system can provide an audit trail that allows a tracking of a delivery of cash and commodities upon completion of a previous action and with a time stamp. By inputting a CLiP identification or reference number into the CLiP system 200, a user, inspector, or other permissioned entity can retrieve a status of a transaction or a history of a transaction to ensure compliance.

[0076] In alternative embodiments, in an attempt to ensure a high degree of Sharia'a compliance, CLiP 200 also allows a number of options for the purchase and sale legs of the transactions. For example, the purchaser of the commodity may hold the commodities, may request to take delivery of the commodity, or may sell the commodity to another permitted party using CLiP 200.

[0077] CLiP 200 is an integrated platform that aims to bind all parties necessary to effect the sequential sale and purchase of commodities to give effect to the Commodity Murabaha agreed between the two transacting banks. CLiP can provide its members with independent contracts for the purchase and sale of commodities for the purposes of liquidity management.

[0078] CLiP has numerous advantages over a conventional Commodity Murabaha structure. CLiP integrates independent service providers for a "one stop shop" solution, reduces its available commodities to prevent double selling, provides real-time messaging to commodity custodians and financial service providers, provides straight through processing, allows for an order management system audit trail, has transaction transparency, is a secure environment, consolidates liquidity transactions, provides audit logs of assets and cash, provides system risk management tools, creates a standardized framework, is an enhanced Sharia'a compliant solution, and can be used for conventional or Islamic use.

[0079] Advantages of CLiP over a manual Commodity Murabaha structure include mitigation of human error factors, appropriately sequenced transactions to ensure ownership prior to sale of commodities, control and evidence of a transparent process, the timely offer, acceptance, sale, payment of commodities at the acceptable price, full automation of transaction cash movements based on the transfer of goods ownership, the non-disclosure of each participant's liquidity positioning, and protection of supplier asset holding positions prior to acceptance. Further, CLiP offers an electronic platform, whereas the conventional Commodity Murabaha structure is manually processed. CLiP is automated, whereas the conventional Commodity Murabaha structure requires an exchange of paper. CLiP involves an actual cash movement between all parties, whereas the conventional Commodity Murabaha structure is an external cash movement only between trader and purchaser. CLiP uses commodities as a legal transfer of asset ownership, whereas the transparency of commodity ownership movements in a current Commodity Murabaha structure may be a subject of doubt amongst some in the industry.

[0080] CLiP 200 brings together necessary service providers within an innovative computer-implemented process to facilitate the sequential transactions necessary to improve the current challenges for transparent Sharia'a compliance that is not always present in conventional structures. CLiP addresses the following areas of contention: (a) the control of available commodity and ownership; (b) the movement of cash in respect of the sale and purchase of commodity; and (c) documentation.

[0081] With regard to the control of available commodity and ownership, commodities used in CLiP 200 are provided by suppliers by means of their stock (asset) lists that are free from incumbencies and also recognized as current holdings of that supplier by a relevant commodity repository, central counterparty or intermediary. Within CLiP, stock (asset) ownership changes resulting from transactions are provided for by transfer of ownership interests from the custodian holding stock (assets) on behalf of the seller using the principals of the place of the relevant intermediary approach (PRIMA) deriving from the Unidroit Convention on Substantive Rules For Intermediated Securities (Geneva, 9 October 2009) triggered by real-time automated messages to the relevant registry or account maintainer being the commodity repository, central counterparty, intermediary or suppliers (where authorized to hold client assets). Assets that are in use by CLiP as a result of the initiating transaction cannot be reused in CLiP until full completion of the sequential transactions. This function in CLiP ties commodity assets and its identity (e.g., warrants, certificates) fully and is recorded at the place of the relevant intermediary, to the commodity transactions for which it is being used. Transaction audit logs can show the unique ownership of assets within the CLiP Mechanism for any transaction.

[0082] With regard to the movement of cash in respect of the sale and purchase of commodity, one component in CLiP is the usage of an independent financial services provider at the center of the transaction structure to provide transparency and risk mitigation in the cash movements. This approach allows the sequence of commodity transactions necessary to effect a Commodity Murabaha transaction to continue to be used but in better alignment to Sharia'a principles. In order to maintain the integrity of the Commodity Murabaha transactions around the financial services provider, CLiP controls the sequence of automated steps of the Commodity Murabaha legs based on event triggers. This includes the movement of cash versus commodity ownership from account to account as appropriate. Cash is moved by CLiP between accounts at the financial service provider and those accounts belonging to the participants of the specific Commodity Murabaha transaction and associated sale and purchase transactions. This process can ensure cash payment is clearly made for each commodity transaction in the Murabaha sequence and not just from trader to purchaser.

[0083] With regard to documentation, due to the complexity of the complete

Commodity Murabaha cycle and the requirement to accurately conduct steps in good time and in the correct legal order, documentation can be performed effectively electronically through a dedicated application. CLiP has inbuilt transactional triggers creating secure messaging to transacting parties that is unique. CLiP's timely and sequential cash movements with commodity ownership transfers that the integration of service providers and automation provides distinguish CLiP from the conventional structures.

[0084] CLiP provides at a point of offer a reference that uniquely identifies the commodities they will own on completion of the transaction so that trader is acquiring allocated goods. Upon completion of the purchase, the purchaser is provided with a further detailed list of the underlying commodities acquired. Such information on presentation can be used to instigate inspection or delivery. Current Commodity Murabaha processes cannot always clearly facilitate this as goods may be described generically. The automated real time messaging creates the documentation necessary to evidence each transaction. As each sequential transaction is automated, no subsequent sale can occur before the prior sale has completed, thereby creating legal certainty to the transaction and compliance within Sharia'a principles. As the documentation is created by CLiP, it is automatically time stamped and thereby creates an auditable transaction log for all parties.

[0085] FIGS. 4 to 44 illustrate screenshots of a graphical user interface according to an exemplary embodiment. This graphical user interface can be displayed on a computing device of a user, such as a representative of a trader, a representative of a purchaser, a supplier, or a dealer. The system can provide information to populate fields, respond to requests, and generate content for display on the graphical user interface. The users can enter information and requests that are transmitted to the system for processing, confirming, and responding. [0086] FIG. 4 illustrates a graphical user interface 400 for an asset enquiry where a trader can initiate a CLiP transaction. The graphical user interface has fields for the trader to input (e.g., enter or select) a nominal amount 410 and an asset 420.

[0087] FIG. 5 illustrates a graphical user interface 500 of an asset enquiry where fields have been completed. For example, a trader from Bank A 510 can initiate a transaction for $10,000,000 520 using LME High Grade Aluminum 530 as a commodity. The trader can select the "Get Offer" button 540 once the information has been entered.

[0088] FIG. 6 illustrates a graphical user interface 600 of an asset enquiry showing an offer 610 from a supplier, which a trader can accept 620 or reject 630. The offer may only be available for a certain period of time, shown as the remaining availability 640.

[0089] FIG. 7 illustrates a graphical user interface 700 showing an acceptance confirmation of a purchase contract when the trader accepts the offer.

[0090] FIG. 8 illustrates a graphical user interface 800 showing a confirmation of a purchase contract 810 between a trader and a supplier. The user interface 800 also indicates the next action 820, which is to sell. A trader can enter the details in the appropriate fields, including a counterparty 830, settlement date 840, profit rate 850, and profit amount 860.

[0091] FIG. 9 illustrates a graphical user interface 900 showing a listing of various warrants 910 for LME Zinc, a commodity 920 to be exchanged. Because ownership of warrants of suppliers may be sensitive information, various warrants may be bundled together with a CLiP identification number 930. The trader can only see the warrants in that bundle after the trader accepts an offer.

[0092] FIG. 10 illustrates a graphical user interface 1000 showing completed fields for an offer to sell that can be generated based on those terms. In this example, the counterparty is Bank B: BLME 1010, the settlement date is 05 April 2014 1020, the profit rate is 1.00% 1030, and the profit amount is 666.67 1040.

[0093] Within this graphical user interface, there are options for a trade reversal.

Trade reversal allows the first entity (trader) to sell the commodities back to the second entity (supplier) in the event that, for example, the third entity (purchaser) rejects the offer from the first entity or the first entity has purchased the wrong type of commodity or the wrong amount of commodity. In FIG. 11, a user can select a reason 1110 on graphical user interface 1100 for the reversal from a dropdown menu. In FIG. 12, the reason 1210 has been selected on graphical user interface 1200. In FIG. 13, a graphical user interface 1300 shows a confirmation of a trade reversal. Instead of a trade reversal, the graphical user interface allows for other options for the next action, such as a hold 1410 in graphical user interface 1400 of FIG. 14 and take delivery 1510 in graphical user interface 1500 of FIG. 15. For Sharia'a compliance purposes there must be no connection between each agreement i.e. they must be independent and a purchase of commodities cannot be subject to a condition that they must be sold on. Once acquired the purchaser must have full rights of ownership and enjoyment. The hold functionality therefore allows a purchaser of commodities to confirm its intention to hold the commodities as an asset on its balance sheet. It provides enhanced Sharia'a compliance in respect of ownership rights by recognizing the purchaser is free to deal with the newly acquired assets as it determines and the independence of each of the transactions and, if used, visibly evidences the intent of the purchaser. The take delivery functionality in the system has the same intent and outcomes for enhancing Sharia'a compliance.

[0094] FIG. 16 illustrates a graphical user interface 1600 that shows a sell offer that triggers an alert or message 1610 if the terms do not properly fit within the deal structure and legal requirements. For example, a profit amount 1620 of $10,000,000 cannot be accepted because the profit amount cannot be greater than a buy price. Once addressed, a graphical user interface 1700 shows that a sale offer can be transmitted to a purchaser, as illustrated in FIG. 17.

[0095] FIG. 18 illustrates a graphical user interface 1800 showing a listing of pending transactions 1810 and associated details for a trader (e.g., Bank A) 1820, such as purchaser (e.g., Bank C) 1830, client reference number 1840, amount 1850, trade date 1860, settlement date 1870, status 1880, and identification number 1890. FIG. 19 illustrates graphical user interface 1900 showing a filter 1910 for refining the list of transactions. FIGS. 20A, 20B, and 21 illustrate graphical user interfaces 2000, 2100 showing exemplary selected transaction from the filtered results.

[0096] FIG. 22 illustrates graphical user interface 2200 showing a status history 2210 for a particular transaction referenced by entering a trade reference number 2220.

[0097] FIG. 23 illustrates a graphical user interface 2300 for an offer 2310 for a

Murabaha contract between a trader and a purchaser. FIG. 23 also illustrates a message 2320 that this trade has been rejected. Likewise, as illustrated in FIG. 24, a graphical user interface 2400 could present a message 2410 that the trade has been approved. FIG. 25 similarly illustrates a graphical user interface 2500 showing that a trade has been approved 2510 and prompts for a next action 2520. For the next action, FIG. 26 illustrates a graphical user interface 2600 showing an option to hold 2610, and FIG. 27 illustrates a graphical user interface 2700 showing an option to take delivery 2710.

[0098] FIG. 28 illustrates a graphical user interface 2800 showing current transaction status for pending transactions 2810.

[0099] FIG. 29 illustrates a graphical user interface 2900 showing a confirmation

2910 that an offer was accepted by a dealer.

[00100] FIG. 30 illustrates a graphical user interface 3000 showing a current transaction status for completed transactions 3010.

[00101] FIG. 31 illustrates a graphical user interface 3100 showing a search ledger function 3110, which allows a user to enter a search criteria, such as a client 3120, starting trade date 3130, ending trade date 3140, and reference number 3150. FIG. 32 illustrates a graphical user interface 3200 showing search results 3210 based upon entered criteria in a search ledger 3220.

[00102] FIG. 33 illustrates a graphical user interface 3300 showing a transaction search function, where a user can search for transaction by client 3310, status 3320, trade type 3330, and user 3340. FIG. 34 illustrates a graphical user interface 3400 showing that search results for a daily transaction may be presented based upon the entered criteria. A report may be generated based upon these search results by selecting a "generate report" button 3410. FIGS. 35 to 37 illustrate graphical user interfaces 3500, 3600, 3700 showing search results that may be presented based upon different types of searches.

[00103] FIG. 38 illustrates a graphical user interface 3800 showing a search for a status of a transaction, whereby a user can enter a reference number 3810 to generate a transaction summary report. FIG. 39 illustrates a graphical user interface 3900 of a current transaction status for transactions 3910.

[00104] FIG. 40 illustrates a graphical user interface 4000 showing that search results

4010 may be presented based upon entered search criteria 4020.

[00105] FIG. 41 illustrates a graphical user interface 4100 showing a transaction summary 4110 for a transaction.

[00106] FIG. 42 illustrates a graphical user interface 4200 showing a summary of completed transactions 4210 and related statistics 4220, such as a number of quotes, settlements, rejections, offers, reversed transactions, enquiries, completed transactions, and timeouts.

[00107] FIG. 43 illustrates a graphical user interface 4300 showing notices 4310 to the user generated by or related to the CLiP platform. A user can select a notice 4310 to view a message. FIG. 44 illustrates a graphical user interface 4400 showing search criteria, such as a notice identification number 4410, start date 4420, and end date 4430, that may be used to locate items or filter the platform notices.

[00108] The exemplary embodiment recites the use of CLiP for a Commodity

Murabaha transaction. However, it is intended that these systems and methods may be implemented for any type of transaction consistent with this disclosure, such as a method for a first party (e.g., trader) to obtain a favorable rate by selecting from other banks (e.g., purchaser, a third bank, a fourth bank). The trader can view all participants, their rates and tenor, as well as which banks are their counterparties and which banks they have not approved as counterparties at any point in time. The trader can also see which of its counterparty banks have availability for transactions based on the trader's counterparty credit and risk methodologies.

[00109] Features of the systems and methods described herein include a central computer processing platform that receives an enquiry from a first entity (e.g., trader) for an amount and commodity based upon a proposed transaction with a second entity (e.g., purchaser), provides an offer from a third entity (e.g., supplier), acceptance by the first entity, sells the commodity to a second entity (e.g., purchaser), and sells the commodity from the second entity to a fourth entity (e.g., dealer). A financial services provider and supplier can facilitate these steps and process credits and debits accordingly. During this computer- implemented transaction, the system can track the movement of funds and the commodity to allow for auditing and compliance.

[00110] The functionality described herein with respect to CLiP can be implemented by numerous modules or components that can perform one or multiple functions explicitly or inherently described herein. Each module or component can be executed by a computer, such as a server, having a non-transitory computer-readable medium and processor. In one alternative, multiple computers may be necessary to implement the functionality of one module or component. [00111] Unless specifically stated otherwise as apparent from the following discussion, it is appreciated that throughout the description, discussions utilizing terms such as "processing" or "computing" or "calculating" or "determining" or "measuring" or "selecting" or "displaying" or "identifying" or "detecting" or the like, can refer to the action and processes of a data processing system, or similar electronic device, that manipulates and transforms data represented as physical (electronic) quantities within the system's registers and memories into other data similarly represented as physical quantities within the system's memories or registers or other such information storage, transmission or display devices.

[00112] The exemplary embodiments can relate to an apparatus for performing one or more of the functions described herein. This apparatus may be specially constructed for the required purposes, or it may comprise a general purpose computer selectively activated or reconfigured by a computer program stored in the computer. Such a computer program may be stored in a machine (e.g. computer) readable storage medium, such as, but is not limited to, any type of disk including floppy disks, optical disks, CD-ROMs and magnetic-optical disks, read only memories (ROMs), random access memories (RAMs) erasable programmable ROMs (EPROMs), electrically erasable programmable ROMs (EEPROMs), magnetic or optical cards, or any type of media suitable for storing electronic instructions, and each coupled to a data bus.

[00113] The exemplary embodiments described herein are described as software executed on at least one server, though it is understood that embodiments can be configured in other ways and retain functionality. The embodiments can be implemented on known devices such as a personal computer, a special purpose computer, cellular telephone, personal digital assistant ("PDA"), a digital camera, a digital tablet, an electronic gaming system, a programmed microprocessor or microcontroller and peripheral integrated circuit element(s), and ASIC or other integrated circuit, a digital signal processor, a hard-wired electronic or logic circuit such as a discrete element circuit, a programmable logic device such as a PLD, PLA, FPGA, PAL, or the like. In general, any device capable of implementing the processes described herein can be used to implement the systems and techniques according to this invention.

[00114] It is to be appreciated that the various components of the technology can be located at distant portions of a distributed network and/or the Internet, or within a dedicated secure, unsecured and/or encrypted system. Thus, it should be appreciated that the components of the system can be combined into one or more devices or co-located on a particular node of a distributed network, such as a telecommunications network. As will be appreciated from the description, and for reasons of computational efficiency, the components of the system can be arranged at any location within a distributed network without affecting the operation of the system. Moreover, the components could be embedded in a dedicated machine.

[00115] Furthermore, it should be appreciated that the various links connecting the elements can be wired or wireless links, or any combination thereof, or any other known or later developed element(s) that is capable of supplying and/or communicating data to and from the connected elements. The term module as used herein can refer to any known or later developed hardware, software, firmware, or combination thereof that is capable of performing the functionality associated with that element. The terms determine, calculate and compute, and variations thereof, as used herein are used interchangeably and include any type of methodology, process, mathematical operation or technique.

[00116] The embodiments described above are intended to be exemplary. One skilled in the art recognizes that there are numerous alternative components and embodiments that may be substituted for or included in the particular examples described herein and such additions or substitutions still fall within the scope of the invention.

Claims

CLAIMS What is claimed is:

1. A computer-implemented method for conducting a Commodity Murabaha transaction, the method comprising: receiving, by a computer, an input from a trader for a proposed amount and a commodity; generating, by the computer, an enquiry based on the input from the trader for a proposed transaction with a purchaser for a predetermined tenor and profit rate; determining, by a computer, whether commodities are available to match the proposed amount of the enquiry and what commodity types are available; presenting, by the computer, a request to a supplier for an offer based upon the enquiry from the trader; receiving, by the computer, an offer from the supplier; receiving, by the computer, an input from the trader indicating an acceptance of the offer; processing, by the computer, a payment from the trader to the supplier for purchase of the commodity; processing, by computer, a transfer of ownership of the commodity from the supplier to the trader; presenting, by the computer, an offer to sell the commodity to the purchaser; receiving, by computer, an input from the purchaser indicating an acceptance of the offer to sell the commodity; processing, by computer, a transfer of ownership of the commodity from the trader to the purchaser; presenting, by the computer, an offer to a dealer comprising an offer from the purchaser to sell the commodity; receiving, by computer, an input from dealer indicating an acceptance of the offer to sell the commodity to the dealer; processing, by the computer, a payment from the dealer to the purchaser for purchase of the commodity; and processing, by computer, a transfer of ownership of the commodity from the purchaser to the dealer.

2. The method according to claim 1, wherein the commodity is a physical and tangible good or a Sharia'a compliant instrument.

3. The method according to claim 1, wherein the offer from the supplier comprises an offer from more than one supplier.

4. The method according to claim 3, further comprising generating, by the computer, a single reference number for commodities from the more than one supplier.

5. The method according to claim 1, further comprising storing, by the computer, a record in a database having information about an account of the trader, purchaser, dealer, or supplier, wherein the record is updated to reflect a payment to or from the account.

6. The method according to claim 1, further comprising storing, by the computer, a record in a database having information about an commodity account of the trader, purchaser, dealer, or supplier, wherein the record is updated to reflect a transfer of commodities to or from the account.

7. The method according to claim 1, further comprising generating, by the computer, a listing of messages and payments in the transaction.

8. The method according to claim 1, wherein the second payment is made only upon completion of the first payment.

9. The method according to claim 1, wherein processing, by the computer, the payment comprises automatically transmitting an instruction to a bank holding an account to either credit or debit the account.

10. A computer-implemented method for conducting a transaction, the method comprising: receiving, by a computer, a message comprising an enquiry from a first entity for an amount and a commodity; automatically transmitting, by a computer, upon the account of the first entity being in receipt of funds, an instruction for payment from the first entity for purchase of the commodity from a second entity; processing, by a computer, a transfer of ownership of the commodity to the first entity; transmitting, by the computer, a message comprising an offer to a third entity for the commodity; processing, by the computer, a transfer of ownership of the commodity to the third entity; transmitting, by the computer, a message comprising an offer to a fourth entity for the commodity; automatically transmitting, by the computer, an instruction for payment from the fourth entity for purchase of the commodity; and processing, by the computer, a transfer of ownership of the commodity to the fourth entity.

11. The method according to claim 10, wherein the commodity is a physical and tangible good or a Sharia'a compliant instrument.

12. The method according to claim 10, wherein the enquiry of the first entity is based upon a proposed transaction with the third entity.

13. The method according to claim 10, wherein the first entity is a trader.

14. The method according to claim 10, wherein the second entity is a supplier.

15. The method according to claim 10, wherein the third entity is a purchaser.

16. The method according to claim 10, wherein the fourth entity is a dealer.

17. The method according to claim 10, further comprising storing, by the computer, a record in a database having information about an account of the first entity, second entity, third entity, or fourth entity, wherein the record is updated to reflect a payment to or from the account.

18. The method according to claim 10, further comprising generating, by the computer, a listing of messages and payments in the transaction.

19. A system for conducting a Commodity Murabaha transaction, the system comprising: a central processing platform comprising a processor and a computer-readable storage medium, the central processing platform configured to: receive a message comprising an enquiry from a first entity for an amount and a commodity; transmit a message comprising an offer from a second entity to sell the commodity to the first entity; transmit a message to process a payment from the first entity for purchase of the commodity from a second entity; transmit a message to process the transfer of ownership of the commodity to the first entity; transmit a message comprising an offer to a third entity for the commodity; transmit a message to process the transfer of ownership of the commodity to the third entity; transmit a message comprising an offer to a fourth entity for the commodity; transmit a message to process a payment from the fourth entity for purchase of the commodity from a third entity; and transmit a message to process the transfer of ownership of the commodity to the fourth entity.

20. The system according to claim 19, further comprising a database comprising a record having information about an account of the first entity, second entity, third entity, or fourth entity, wherein the record is updated to reflect a payment to or from the account.

21. The system according to claim 19, wherein the commodity is a physical and tangible good or a Sharia'a compliant instrument.