Verifiable Order Message Handling for Electronic Auctions
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Solution Overview
Problem
Existing electronic trading systems struggle to efficiently handle electronic messages for electronic auctions, particularly in identifying and verifying order messages, leading to unnecessary halting or canceling of auctions, decreased liquidity, and increased unmatched orders, which drain computer resources and result in inaccurate matching.
Innovation Solution
A system and method for verifiable order message handling that allows entities with unregistered securities to participate in electronic auctions by verifying predetermined order conditions, ensuring efficient participation and execution of orders through a computer platform with specialized components like order verifier and auction engine.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Manufacturing precision
If existing electronic trading systems verify order messages strictly, then order data accuracy is improved, but auction participation is reduced and liquidity decreases
Solution Approach 1:
The system performs preliminary identification and verification of order message characteristics before the auction process. By pre-identifying valid orders and separating them from invalid ones, the system ensures accurate order data while allowing all valid orders to participate in the auction, thus maintaining both data accuracy and auction participation.
Solution Approach 2:
The system extracts and identifies specific characteristics of order messages to distinguish valid orders from invalid ones. By extracting key features such as order type, parameters, and characteristics, the system can verify orders accurately while allowing participating orders to proceed to the auction, separating the verification function from the auction execution.
2Manufacturing precision
If existing electronic trading systems halt auctions due to improper order data, then order verification accuracy is improved, but processing time increases and resources are drained
Solution Approach 1:
The system performs order message identification and verification in advance before the auction executes. By pre-identifying valid orders and their characteristics, the system ensures verification accuracy while avoiding delays during the auction process, as the verification work is already completed beforehand.
Solution Approach 2:
The system quickly identifies and filters out invalid order messages using characteristic matching, allowing valid orders to proceed rapidly to the auction. By efficiently skipping over invalid orders through characteristic verification, the system maintains high processing speed while ensuring verification accuracy.
3Reliability
If existing electronic trading systems reject orders with unregistered securities, then system reliability is improved, but liquidity and matched orders decrease
Solution Approach 1:
The system changes the verification parameter from checking security registration status to checking order message characteristics. By verifying that orders meet predefined characteristics and parameters rather than requiring prior security registration, the system maintains reliability while allowing entities with unregistered securities to participate, thus preserving liquidity.
Solution Approach 2:
The system applies different verification rules to different order types. By identifying specific order characteristics and applying appropriate verification criteria based on the order type rather than a blanket registration requirement, the system ensures reliability for each order type while maintaining overall system liquidity.
4Manufacturing precision
If existing electronic trading systems store unmatched orders for further processing, then order matching accuracy is improved, but computer resources are drained
Solution Approach 1:
The system performs preliminary identification and verification of order characteristics before matching. By pre-identifying valid orders and their characteristics, the system ensures accurate matching while avoiding the need to store and reprocess invalid orders, thus reducing computer resource consumption.
Solution Approach 2:
The system extracts and verifies key characteristics of order messages to identify valid orders before the matching process. By extracting and validating order features in advance, the system ensures matching accuracy while eliminating the need to store and repeatedly process invalid orders, reducing resource drain.
Data Source
AI summary
Verifiable order message handling for electronic auctions. Electronic order messages are received, with at least one message including an order of a predetermined type having sell order information associated with an entity having securities not previously registered for transactions. Requests for participation in an electronic auction are identified from among the messages. The requests include auction-only order information, with at least one request including the order of the predetermined type. It is determined whether the sell order information in the order of the predetermined type meets a predetermined auction condition based on an auction price. When the sell order information meets the predetermined auction condition, the order is permitted to participate in the electronic auction, such that the order is executed in full in the electronic auction. When the sell order information does not meet the predetermined auction condition, the electronic auction is canceled.