Centralized Trading Platform for Tri-Party Asset Tracking
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Solution Overview
Problem
Large organizations, such as financial institutions, face difficulties in efficiently, effectively, and securely managing complex computer systems that exchange information with external systems, particularly in tri-party trading scenarios where assets are held by third-party custodians, leading to outdated or inaccurate position information.
Innovation Solution
Implementing centralized trading and tracking computing platforms that integrate with internal and external systems to provide real-time or up-to-date asset views, enabling accurate trading of assets held by third-party custodians, including mutual funds and equities, through validation, order creation, and settlement processes.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Reliability
If assets are held by third-party custodians to mitigate risk, then security is improved, but position information becomes outdated or inaccurate
Solution Approach 1:
The system establishes continuous feedback loops between the custodian and administrator through automated information exchange. The custodian provides real-time position data, account balances, and transaction status back to the administrator, ensuring information remains current without requiring assets to be held internally.
Solution Approach 2:
The patent introduces an intermediary computing platform that facilitates communication between the custodian and administrator. This intermediary system receives information from the custodian, processes it, and delivers accurate position data to the administrator, resolving the information asymmetry created by third-party custody arrangements.
2Device complexity
If monthly statements are provided by custodians, then administrative complexity is reduced, but position information becomes outdated
Solution Approach 1:
The system implements periodic automated information exchange between custodian and administrator, where position data is transmitted at regular intervals or upon specific triggering events. This maintains information freshness without requiring continuous manual intervention, balancing automation with information currency.
Solution Approach 2:
The patent establishes continuous automated information flow between custodian and administrator systems, replacing discrete monthly statements with ongoing real-time or near-real-time data exchange. This ensures position information remains current while reducing administrative burden through automation.
3Productivity
If third-party administrators trade assets held by custodians, then operational efficiency is improved, but trading accuracy decreases due to outdated position information
Solution Approach 1:
The system performs preliminary validation of trading instructions against current position data before executing trades. By checking availability, eligibility, and constraints in advance using up-to-date information from the custodian, the system prevents inaccurate trading while maintaining efficient operations.
Solution Approach 2:
Real-time feedback from the custodian system provides current position information to the administrator, enabling accurate trading decisions. The feedback loop ensures traders have access to up-to-date data on account balances, asset availability, and trading constraints, eliminating the accuracy problems caused by outdated information.
4Measurement precision
If centralized trading platforms are implemented, then trading accuracy is improved, but system complexity increases
Solution Approach 1:
The patent divides the trading system into separate modular components: the administrator platform for trade management, the custodian system for asset holding, and an intermediary layer for communication. Each component maintains independent functionality while integrating through standardized interfaces, improving accuracy without creating monolithic complexity.
Solution Approach 2:
The centralized trading platform is designed with universal interfaces that can communicate with multiple custodians and support various asset types. This multi-functionality allows the system to achieve high trading accuracy across diverse scenarios without requiring separate specialized systems for each case.
Data Source
AI summary
Methods, systems, and computer-readable media for deploying and implementing centralized trading and tracking computing platforms to support tri-party trading are presented. In some embodiments, a central trading computing platform may receive, from a discretionary and managed accounts administration computer system associated with a financial institution, trade information defining one or more trades in one or more exchange traded funds or equity securities for one or more accounts administrated by the financial institution. Subsequently, the computing platform may validate the trade information and create order information. Then, the computing platform may send, the order information to a clearing entity computer system. The order information may be configured to cause the clearing entity computer system to settle the one or more trades in the one or more exchange traded funds or equity securities for the one or more accounts administrated by the financial institution with a custodian different from the financial institution.