Exempt Securities Trading System with Modular Risk Analytics
Find Innovative SolutionsGenerate Solutions
Solution Overview
Problem
Current methods lack standardization and automation in discovering and valuing alternative assets, private equity funds, and global money market or fixed income instruments, particularly for institutional investors, leading to inefficiencies in price discovery and risk metrics, and there is no integrated system for interactive electronic trading in exempt securities markets.
Innovation Solution
A computer network-based system that integrates a risk analytic module, auction module, multilateral counterparty trade module, and asset tracking module, enabling real-time reporting and flexible bidding with bid-offer and unique asset price sourcing capabilities, allowing for interactive online trading of exempt securities across a global information network.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If manual price data entry and flat digital file transfer are used, then existing processes can be maintained with minimal system complexity, but thousands of man-hours are wasted annually and price discovery efficiency is poor
Solution Approach 1:
The patent replaces manual price data entry processes with an automated electronic trading system that uses computer networks, databases, and software modules to automatically source, transmit, and process price information for alternative assets, private equity funds, and money market instruments, thereby eliminating manual labor while managing system complexity through modular architecture
Solution Approach 2:
The system enables self-service price discovery through automated modules that independently source prices from multiple data providers, validate information, and update databases without requiring manual intervention, allowing the system to maintain and update its own operational state
2Productivity
If interactive electronic trading with real-time bidding is implemented, then price transparency and trading efficiency are improved, but the system requires complex real-time processing and communication infrastructure
Solution Approach 1:
The patent divides the trading system into separate functional modules including a bid modifier module, auction module, multilateral counterparty trade module, and risk metric module, each handling specific trading functions independently, which reduces overall processing complexity while enabling real-time interactive trading
Solution Approach 2:
The system allows bidders to modify or withdraw bids up to a certain point prior to acceptance, and sellers to withdraw offers prior to a certain point, enabling preliminary actions that facilitate flexible real-time trading while managing system complexity through defined temporal windows
3Measurement precision
If automated risk analysis and real-time portfolio valuation are provided, then investment decision quality improves, but computational resources and processing time requirements increase
Solution Approach 1:
The patent provides risk analysis and portfolio valuation capabilities that perform computations only when needed and at appropriate levels of detail, avoiding excessive computational resources by applying partial analysis rather than comprehensive revaluation of all portfolio components in real-time
Data Source
AI summary
A system is provided for processing and transmitting trading information for exempt securities or assets not otherwise listed, traded, valuated or bought/sold in any conventional exchange or system for the regulation of securities or commodities. The system may include: (a) a risk analytic module using the latest market prices and data provided by other modules, (b) an auction module including asset auction functionality and a multi-lateral counterparty trade workstation capability, with bid-offer and unique asset price sourcing capabilities, (c) an asset or portfolio tracking module providing browser based, realtime consolidated reporting of multi-firm asset positions (public or private), and (d) an out-of-band communications module alerting users/subscribers who may or may not be logged on the system via fax, e-mail, text messages, or other out-of-band communications of a pending transaction being consummated or achieved.