Anonymous block trade matching system

Abstract

Disclosed is an anonymous block trade matching system which allows users that wish to cross large blocks of stock to submit orders, or indications of interest, with the option of utilizing market peg benchmarks or future price cross benchmarks. Orders submitted may be subject to minimum thresholds, including a threshold requiring that the order represent ‘X’ % of average daily volume. After submission of a firm order in the system, an alert is generated to provide the order data to other users with potential to cross the order. Visibility of order data by other users may be restricted based upon a data interaction group to which the ordering user or the other user belongs. The system may provide users viewing order data with a capability of negotiating with the submitting user via a restricted two-way messaging interface. Flat rate and rebate / fee cost models may be utilized as a means for charging a user for access to the system.

Description

[0001]This application includes material which is subject to copyright protection. The copyright owner has no objection to the facsimile reproduction by anyone of the patent disclosure, as it appears in the Patent and Trademark Office files or records, but otherwise reserves all copyright rights whatsoever.FIELD OF THE INVENTION[0002]The present invention relates in general to the field of computer systems, and in particular to a novel computer system for facilitating block trade securities transactions.BACKGROUND OF THE INVENTION[0003]Block trading, also referred to as “crossing,” is a well-known type of securities transaction wherein trades are privately negotiated apart from the public auction market. Block trading allows sell side traders and buy-side traders to reduce transaction costs, such as ticket, execution and settlement costs. While block trading is most often performed through manual negotiation, several matching engines and alternative trading systems have been known i...

AI Technical Summary

Benefits of technology

[0008]It is a further object of the invention to provide a system which enables participants to cross large blocks of international or national stocks anonymously to cut ticket, execution and settlement costs while also reducing market impact and spread costs.

[0009]In preferred embodiments, the invention provides an anonymous block trade matching system which allows users that wish to cross large blocks of stock to submit orders, or indications of interest, with the option of utilizing market peg benchmarks or future price cross benchmarks. Orders submitted may be subject to minimum size thresholds. After submission of a firm order in the system, an alert is generated to provide the order data to other users with potential to cross the order. Visibility of order data by other users may be restricted based upon a data interaction group to which the ordering user or the other user belongs. The system may provide users viewing order data with a capability of negotiating with the submitting user via a restricted two-way messaging interface. Flat rate and rebate / fee cost models may be utilized as a means for charging a user for access to the system.

Problems solved by technology

However the Instinet Systems and other matching engines which provide for block trading are limited in several respects.

While they have provided a means for continuous off-exchange crossing, they have not provided a sufficient capability to submit orders using market peg benchmarks or future price cross benchmarks via a web based terminal application.

While such systems have provided a means for transmitting alerts to subscribers to advise them of potential trading opportunities, no means has existed for permitting the user to control which users or types of users will receive such alerts.

Additionally, systems that provide for block trading have typically provided only limited means for negotiation between the parties, and such negotiations were only available to customers utilizing proprietary trading platforms on a proprietary data network.

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