U.S. patent application number 15/079266 was filed with the patent office on 2016-07-14 for facilitation of payments between counterparties by a central counterparty.
This patent application is currently assigned to Chicago Mercantile Exchange Inc.. The applicant listed for this patent is Chicago Mercantile Exchange Inc.. Invention is credited to David Boberski, Richard Co, Edward M. Gogol, John Labuszewski, John Wiley, Steve Youngren.
Application Number | 20160203458 15/079266 |
Document ID | / |
Family ID | 47354484 |
Filed Date | 2016-07-14 |
United States Patent
Application |
20160203458 |
Kind Code |
A1 |
Boberski; David ; et
al. |
July 14, 2016 |
FACILITATION OF PAYMENTS BETWEEN COUNTERPARTIES BY A CENTRAL
COUNTERPARTY
Abstract
A system for moving money between accounts of traders by a
central counterparty to facilitate payments, i.e. the movement of
funds, there between is disclosed which provides a flexible
mechanism which supports simpler accounting, new types of
derivatives contracts as well new types fees. The disclosed futures
contract, referred to as a "payer" contract, comprises a
"no-uncertainty" futures contract, i.e. the initial value and
settlement value parameters are defined, that leverages the
mechanisms of the clearing system to, for example, accommodate
related payments. Accordingly, a 1-to-many relationship between
contracts and prices is provided whereby each price component may
be assigned its own payer contract. The function of the payer
contract may be to guarantee the movement of money from related
positions. In one embodiment, payer contracts are dynamically
created whenever a payment is needed.
Inventors: |
Boberski; David; (Westport,
CT) ; Gogol; Edward M.; (Chicago, IL) ; Wiley;
John; (New York, NY) ; Co; Richard; (Chicago,
IL) ; Youngren; Steve; (Elgin, IL) ;
Labuszewski; John; (Westmont, IL) |
|
Applicant: |
Name |
City |
State |
Country |
Type |
Chicago Mercantile Exchange Inc. |
Chicago |
IL |
US |
|
|
Assignee: |
Chicago Mercantile Exchange
Inc.
|
Family ID: |
47354484 |
Appl. No.: |
15/079266 |
Filed: |
March 24, 2016 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
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13162821 |
Jun 17, 2011 |
|
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15079266 |
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Current U.S.
Class: |
705/37 |
Current CPC
Class: |
G06Q 40/04 20130101;
G06Q 40/025 20130101; G06Q 20/28 20130101; G06Q 20/387 20130101;
G06Q 40/00 20130101; G06Q 40/06 20130101; G06Q 20/381 20130101 |
International
Class: |
G06Q 20/28 20060101
G06Q020/28; G06Q 40/02 20060101 G06Q040/02; G06Q 40/06 20060101
G06Q040/06; G06Q 40/04 20060101 G06Q040/04; G06Q 20/38 20060101
G06Q020/38 |
Claims
1. A computer implemented method of facilitating a payment between
traders based on a first position in a first instrument held by a
first trader to which a second trader is a counterparty, the method
comprising: determining, by a payment processor based on the first
position, the amount of a payment to be made from one of the first
or second trader to the other of the first or second trader in
advance of settlement thereof; assigning, automatically by the
payment processor based on the first position, a second position to
the first trader in a futures contract characterized by a
settlement date, a quantity and a price, the second position being
characterized by a value based on the quantity and the price of the
futures contract as of the assigning, and a third position to the
second trader, counter to the second position, in the futures
contract, the first and second traders not being identified to each
other; valuing, by a settlement processor upon occurrence of the
settlement date, the futures contract at a spot value different
from the price of the futures contract, the spot value being based
on the determined payment amount; and modifying, by a margin
processor, a first account record associated with the first trader
and a second account record associated with the second trader, both
stored in an account database stored in a memory coupled with the
processor, to reflect a credit to the account of the first trader
and a debit from the account of the second trader in the amount of
the difference between the value of the second position and the
spot value when the difference represents a loss for the second
trader or to reflect a debit from the account of the first trader
and a credit to the account of the second trader in the amount of
the difference between the value of the second position and the
spot value when the difference represents a loss for the first
trader.
2. The computer implemented method of claim 1 wherein the first
instrument comprises an interest rate derivative, the payment
comprising a coupon payment.
3. The computer implemented method of claim 1 wherein the first
instrument comprises an equity based derivatives contract, the
payment comprising a dividend payment.
4. The computer implemented method of claim 1 wherein the first
instrument comprises a foreign exchange spot contract, the payment
comprising an interest rate differential payment.
5. The computer implemented method of claim 1 wherein the first
instrument comprises an interest rate swap, the payment comprising
an interest payment.
6. The computer implemented method of claim 1 wherein the first
instrument comprises a loan of collateral, the payment comprising
an interest payment.
7. The computer implemented method of claim 1 wherein the payment
comprises a transaction fee.
8. The computer implemented method of claim 1 wherein the quantity
of futures contract is one, the assigning of the second and third
positions to the first and second traders respectively, further
comprising assigning the second and third positions in a plurality
of the futures contract, the quantity of the plurality of the
futures contract being determined based on the payment amount.
9. The computer implemented method of claim 1 wherein the value of
the second and third positions as of the assigning is one of zero
or non-zero.
10. The computer implemented method of claim 9 wherein the spot
value is one of zero or non-zero.
11. The computer implemented method of claim 9 wherein the spot
value is valued based on a multiplier and a final settlement
value.
12. The computer implemented method of claim 11 wherein the
multiplier comprises a value selected from the group comprising
0.01, 0.10, 1.00, 10.00, 100.00, 1000.00, 10,000.00.
13. The computer implemented method of claim 1 wherein the
determining, assigning, valuing and modifying are performed
periodically.
14. The computer implemented method of claim 13 wherein the
determining, assigning, valuing and modifying occur one of
quarterly, semiannually, or annually.
15. The computer implemented method of claim 1 wherein the
determining of the payment amount occurs upon occurrence of the
settlement date.
16. A system for facilitating a payment between traders based on a
first position in a first instrument held by a first trader to
which a second trader is a counterparty, the system comprising: a
payment processor coupled with a memory and operative to determine,
based on the first position, the amount of a payment to be made
from one of the first or second trader to the other of the first or
second trader in advance of settlement thereof; and wherein the
payment processor is further operative to automatically assign,
based on the first position, a second position to the first trader
in a futures contract characterized by the settlement date, a
quantity and a price, the first position being characterized by a
value based on the quantity and the price of the futures contract
as of the assignment, and automatically assign a third position to
the second trader, counter to the second position, in the futures
contract, the first and second traders not being identified to each
other; a settlement processor coupled with the memory and operative
to value, upon occurrence of the settlement date, the futures
contract at a spot value different from the price of the futures
contract, the spot value being based on the determined payment
amount; and a margin processor coupled with the settlement
processor and the memory and operative to modify a first account
record associated with the first trader and a second account record
associated with a second trader, both stored in an account database
stored in the memory, to reflect a credit to the account of the
first trader and a debit from the account of the second trader in
the amount of the difference between the value of the second
position and the spot value when the difference represents a loss
for the second trader, or to reflect a debit from the account of
the first trader and a credit to the account of the second trader
in the amount of the difference between the value of the second
position and the spot value when the difference represents a loss
for the first trader.
17. The system of claim 16 wherein the first instrument comprises
an interest rate derivative, the payment comprising a coupon
payment.
18. The system of claim 16 wherein the first instrument comprises
an equity based derivatives contract, the payment comprising a
dividend payment.
19. The system of claim 16 wherein the first instrument comprises a
foreign exchange spot contract, the payment comprising an interest
rate differential payment.
20. The system of claim 16 wherein the first instrument comprises
an interest rate swap, the payment comprising an interest
payment.
21. The system of claim 16 wherein the first instrument comprises a
loan of collateral, the payment comprising an interest payment.
22. The system of claim 16 wherein the payment comprises a
transaction fee.
23. The system of claim 16 wherein the quantity of futures contract
is one, the payment processor being further operative to assign the
second and third positions in a plurality of the futures contract,
the quantity of the plurality of the futures contract being
determined based on the payment amount.
24. The system of claim 16 wherein the value of the first and
second positions as of the assignment is one of zero or
non-zero.
25. The system of claim 24 wherein the spot value is one of zero or
non-zero.
26. The system of claim 24 wherein the spot value is valued based
on a multiplier and a final settlement value.
27. The system of claim 26 wherein the multiplier comprises a value
selected from the group comprising 0.01, 0.10, 1.00, 10.00, 100.00,
1000.00, 10,000.00.
28. The system of claim 16 wherein the payment processor determines
the payment amount periodically.
29. The system of claim 28 wherein the payment processor determines
the payment amount one of quarterly, semiannually, or annually.
30. The system of claim 16 wherein the payment processor is
operative to determine the payment amount upon occurrence of the
settlement date.
31. A system for facilitating a payment between traders based on a
first position in a first instrument held by a first trader to
which a second trader is a counterparty, the system comprising:
first logic stored in a memory and executable by a processor to
determine, based on the first position, the amount of a payment to
be made from one of the first or second trader to the other of the
first or second trader in advance of settlement thereof; the first
logic being further executable to automatically assign, based on
the first position, a second position to the first trader in a
futures contract characterized by the settlement date, a quantity
and a price, the second position being characterized by a value
based on the quantity and the price of the futures contract as of
the assignment, and a third position to the second trader, counter
to the second position, in the futures contract, the first and
second traders not being identified to each other; second logic
stored in the memory and executable by the processor to value, upon
occurrence of the settlement date, the futures contract at a spot
value different from the price of the futures contract, the spot
value being based on the determined payment amount; and third logic
stored in the memory and executable by the processor to modify a
first account record associated with the first trader and a second
account record associated with the second trader, both stored in an
account database stored in the memory, to reflect a credit to the
account of the first trader and a debit from the account of the
second trader in the amount of the difference between the value of
the second position and the spot value when the difference
represents a loss for the second trader, or to reflect a debit from
the account of the first trader and a credit to the account of the
second trader in the amount of the difference between the value of
the second position and the spot value when the difference
represents a loss for the first trader.
Description
REFERENCE TO RELATED APPLICATIONS
[0001] This application is a continuation of U.S. patent
application Ser. No. 13/162,821 (Attorney Ref. No. 4672/11002AUS)
filed Jun. 17, 2011, the entirety of which is hereby incorporated
by reference.
BACKGROUND
[0002] Futures Exchanges, referred to herein also as an "Exchange",
such as the Chicago Mercantile Exchange Inc. (CME), provide a
marketplace where futures and options on futures are traded.
Futures is a term used to designate all contracts covering the
purchase and sale of financial instruments or physical commodities
for future delivery or cash settlement on a commodity futures
exchange. A futures contract is a legally binding agreement to buy
or sell a commodity at a specified price at a predetermined future
time. An option is the right, but not the obligation, to sell or
buy the underlying instrument (in this case, a futures contract) at
a specified price within a specified time. Each futures contract is
standardized and specifies commodity, quality, quantity, delivery
date and settlement. Cash Settlement is a method of settling a
futures contracts by cash rather than by physical delivery of the
underlying asset whereby the parties settle by paying/receiving the
loss/gain related to the contract in cash when the contract
expires.
[0003] Typically, the Exchange provides a "clearing house" which is
a division of the Exchange through which all trades made must be
confirmed, matched and settled each day until offset or delivered.
The clearing house is an adjunct to the Exchange responsible for
settling trading accounts, clearing trades, collecting and
maintaining performance bond funds, regulating delivery and
reporting trading data. Essentially mitigating credit. Clearing is
the procedure through which the Clearing House becomes buyer to
each seller of a futures contract, and seller to each buyer, also
referred to as a "novation," and assumes responsibility for
protecting buyers and sellers from financial loss by assuring
performance on each contract. This is effected through the clearing
process, whereby transactions are matched. A clearing member is a
firm qualified to clear trades through the Clearing House. In the
case of the CME's clearing house, all clearing members not
specifically designated as Class B members are considered Class A
clearing members. In the CME there are three categories of clearing
members: 1) CME clearing members, qualified to clear transactions
for all commodities; 2) IMM clearing members, qualified to clear
trades for only IMM and IOM commodities; and 3) IMM Class B
clearing members, solely limited to conducting proprietary
arbitrage in foreign currencies between a single Exchange-approved
bank and the IMM and who must be guaranteed by one or more Class A
non-bank CME or IMM clearing member(s). Note that a "member" is a
broker/trader registered with the Exchange.
[0004] As an intermediary, the Exchange bears a certain amount of
risk in each transaction that takes place. To that end, risk
management mechanisms protect the Exchange via the Clearing House.
The Clearing House establishes clearing level performance bonds
(margins) for all Exchange products and establishes minimum
performance bond requirements for customers of Exchange products. A
performance bond, also referred to as a margin, is the funds that
must be deposited by a customer with his or her broker, by a broker
with a clearing member or by a clearing member with the Clearing
House, for the purpose of insuring the broker or Clearing House
against loss on open futures or options contracts. This is not a
part payment on a purchase. The performance bond helps to ensure
the financial integrity of brokers, clearing members and the
Exchange as a whole. The Performance Bond to Clearing House refers
to the minimum dollar deposit which is required by the Clearing
House from clearing members in accordance with their positions.
Maintenance, or maintenance margin, refers to a sum, usually
smaller than the initial performance bond, which must remain on
deposit in the customer's account for any position at all times.
The initial margin is the total amount of margin per contract
required by the broker when a futures position is opened. A drop in
funds below this level requires a deposit back to the initial
margin levels, i.e. a performance bond call. If a customer's equity
in any futures position drops to or under the maintenance level
because of adverse price action, the broker must issue a
performance bond/margin call to restore the customer's equity. A
performance bond call, also referred to as a margin call, is a
demand for additional funds to bring the customer's account back up
to the initial performance bond level whenever adverse price
movements cause the account to go below the maintenance.
[0005] The accounts of individual members, clearing firms and
non-member customers doing business through the Exchange must be
carried and guaranteed to the Clearing House by a clearing member.
As mentioned above, in every matched transaction executed through
the Exchange's facilities, the Clearing House is substituted as the
buyer to the seller and the seller to the buyer, with a clearing
member assuming the opposite side of each transaction. The Clearing
House is an operating division of the Exchange, and all rights,
obligations and/or liabilities of the Clearing House are rights,
obligations and/or liabilities of the Exchange. Clearing members
assume full financial and performance responsibility for all
transactions executed through them and all positions they carry.
The Clearing House, dealing exclusively with clearing members,
holds each clearing member accountable for every position it
carries regardless of whether the position is being carried for the
account of an individual member, for the account of a non-member
customer, or for the clearing member's own account. Conversely, as
the contra-side to every position, the Clearing House is held
accountable to the clearing members for the net settlement from all
transactions on which it has been substituted as provided in the
Rules.
BRIEF DESCRIPTION OF THE DRAWINGS
[0006] FIG. 1 shows a block diagram of an exemplary network for
trading futures contracts, including in which payer contracts may
be implemented, according to one embodiment.
[0007] FIG. 2 a block diagram of an exemplary implementation of the
system of FIG. 1 for facilitating payments between counterparties,
e.g. first and second traders, by a central counterparty.
[0008] FIG. 3 depicts a flow chart showing operation of the system
of FIGS. 1 and 2.
[0009] FIG. 4 shows an illustrative embodiment of a general
computer system 400 for use with the system of FIG. 1.
DETAILED DESCRIPTION OF THE DRAWINGS AND PRESENTLY PREFERRED
EMBODIMENTS
[0010] A system for moving money between accounts of traders by a
central counterparty to facilitate payments, i.e. the movement of
funds, there between is disclosed which provides a flexible
mechanism which supports simpler accounting, new types of
derivatives contracts as well as new types of fees. As was
discussed above, in futures contract clearing, a margin account
offsets losses or gains related to the price change of a contract.
If a trader's contract price increases or decreases, the change in
value is reflected in the margin account. In fact, generally the
only way to move money in or out of a margin account is by changing
the price of the futures contract. This is a one-to-one
relationship: one contract, one cash flow. Current systems,
however, cannot handle related cash flows like coupons, interest on
variation margin, or other periodic or occasional payments made by
one trader to another while the related position remains open, e.g.
a one-to-many relationship: one contract, two or more cash flows.
In the over-the-counter ("OTC") market, for example, if a trader's
position decreases, the trader must make a cash payment
(collateral) to the prime broker account of the counterparty. An
important distinction in OTC markets is that any collateral in the
prime broker account of a counterparty remains the property of the
trader, and thus the trader is entitled to at least one additional
margin account cash flow, which is interest on the collateral.
Current futures contract clearing systems do not support this type
of payment requiring separate/external ad hoc payment and
accounting mechanisms to manage.
[0011] Exchange derivative contracts having a periodic or sporadic
payment from one party to the contract to the other; or, a payment
between the exchange and a party to a derivatives contract, have
been proposed. However, a problem with such payments is that
exchange clearing systems must be coordinated with adjacent
non-exchange owned and operated bookkeeping services and systems to
account for and manage these related payments. So even if the
exchange were to configure its systems accordingly to accommodate
such periodic or other related payments, difficulties are often
experienced in coordinating these capabilities with the (many)
bookkeeping service providers or the (many) proprietary bookkeeping
systems, such as "front-end" independent software vendors ("ISV's")
and "back-end" bookkeeping services that interact with the
Exchange. Thus, acceptance of novel contracts that utilize such
periodic payments may be impeded.
[0012] The disclosed futures contract, referred to as a "payer"
contract, comprises a "no-uncertainty" futures contract, i.e. the
initial value and settlement value parameters are defined and/or
pre-determined and, thereby, the buyer and seller are not exposed
to market risk. The disclosed payer contract leverages the
mechanisms of the clearing system to accommodate, for example, a
related, e.g. life cycle, payment featured by a traditional
contract to which it may be paired. Accordingly, a 1-to-many
relationship between contracts and prices is provided whereby each
price component may be assigned its own payer contract. The
function of the payer contract is to guarantee, by creating a
defined and riskless position value and settlement value, the
movement of money from related positions. In one embodiment, payer
contracts are dynamically created whenever a payment is needed in
relation to some other position held by the parties, though they
may be manually created in such situations as well. In addition,
the traders among which the payment is to be transferred need not
know of each other, the disclosed mechanism, and the central
counterparty underpinnings, facilitating anonymous payments there
between.
[0013] The disclosed embodiments have application with respect to a
potentially wide variety of exchange traded, multi-laterally
cleared derivatives contracts and have the advantage of being
"implementable" by an Exchange without explicit coordination with
adjacent non-exchange owned and operated bookkeeping service
providers. In particular, any contract structure that contemplates
a "pass-through" of monetary value for the purposes of creating a
pseudo coupon payment, dividend payment, fee payment, swap payment,
rolling spot interest pass-through payment, etc. may use the
disclosed embodiments to effect payment.
[0014] Derivative contracts, such as those traded or cleared at CME
Group, have become increasingly complex in recent years. In
particular, the demand to replicate the operational requirements of
over-the-counter (OTC) derivatives with their emphasis on
customization has proven to be challenging. The disclosed payer
contract may address these issues and difficulties,
[0015] For example, consider a contract that replicates an interest
rate swap ("IRS") which, typically, contemplates periodic swaps of
cash calculated by reference to a fixed and a floating interest
rate. It will be appreciated that such occasional payments are not
a standard feature of futures contracts and are not simply a
function of the daily mark-to-market ("MTM") of a futures contract
by reference to the daily settlement price. Rather, standard
futures contracts contemplate a single "reckoning" upon a single
final settlement date.
[0016] A payer contract may be generated by an Exchange, such as
CME Group, so as to flow seamlessly into adjacent private systems,
including back-end bookkeeping service systems, obviating the
necessity for the bookkeeping service to build out new
capabilities. That is, while the Exchange, and/or Clearing House
thereof, may still need to build the capability of generating payer
contracts, such as on an automated basis, when these auto-generated
contracts are created, they may flow into accounts that are kept in
adjacent bookkeeping systems easily.
[0017] In one embodiment a payer contract may be valued on a
"binary basis", referred to as a "binary option," at either $0 or
$1, at the discretion of the Exchange. The "switch" may be set by
the Exchange in the same way that a cash-settled futures contract
is valued at a particular value on its final settlement date. Thus,
an account holding a long payer contract may receive either $0 or
$1 on the final settlement date of the contract. An account holding
a short payer contract may receive either $0 or be obligated to pay
$1 on the final settlement date of the contract.
[0018] It will be understood that a margin account offsets gains or
losses related to the price change of a futures contract held by a
trader. If a trader holds a "long" position (obligated to buy) on a
contract for which the price increases or holds a "short" position
(obligated to sell) on a contract for which the price decreases,
the trader's risk of loss goes down and their margin requirement
will go down which may result in funds being credited to their
margin account by the clearing and margin mechanisms of the
Exchange, the crediting occurring substantially simultaneously with
a debiting of similar magnitude from the margin account of the
trader holding the counter position. That is, for the trader
holding a long position on a contract for which the price decreases
or holding a short position on a contract for which the price
increases, the trader's risk of loss goes up and their margin
requirement will go up which may result in funds being debited from
their margin account. The clearing organization of the central
counter party automatically determines the daily contract
settlement prices and corresponding margin requirements for the
traders and automatically moves the funds as appropriate to ensure
performance by the parties. In the case of a cash-settled contract,
at the settlement date, the buyer and the seller may simply
exchange the difference in the associated cash positions. The cash
position is the difference between the spot price of the asset on
the settlement date and the agreed upon price as dictated by the
future contract. If the spot price is less than the contract price,
the buyer pays the seller the difference. If the spot price is more
than the contract price, the seller pays the buyer the difference.
This cash settlement may be effected via the margin accounts of the
traders as described above.
[0019] By generating payer contracts on an automated basis in
particular accounts held at the Clearing House, funds may
effectively be moved from one party, the "payor", to the other
party, the "payee", of contracts booked on the Exchange. That is,
in the case of binary payer contracts, by assigning a quantity of
contracts based on the payment amount, which may be determined at,
or prior to, settlement, the appropriate amount may be paid by the
payor to the payee. Given the operation of the margining systems of
the Exchange, this may be accomplished by valuing the position in
the contracts at a zero value and then setting a non-zero value,
e.g. $1 per contract, at settlement, thereby creating an increase
in contract value and a gain for the long position and loss for the
short position, the margining mechanisms of the Exchange
automatically, or naturally, moving the appropriate funds from the
account of the short trader to the account of the long trader.
Conversely, the position in the contracts may be initially valued
at a non-zero amount, e.g. $1, and then settled at a value of zero,
thereby creating a decrease in the contract value and a loss for
long position and a gain for the short position, the margining
mechanisms of the Exchange automatically, or naturally, moving the
appropriate funds from the account of the long trader to the
account of the short trader. In either case, the initial contract
value and settlement value, and assignment of corresponding long
and short positions to the payor and payee, are implementation
dependent. The utility of the disclosed payer contracts may be
extended and applied in many other ways as described below.
[0020] It will be appreciated that construction of a payer contract
as a "binary option" valued at either $0 or $1 at expiration may
imply certain limitations. Consider that some systems of the
Exchange or adjacent front-end or back-end systems may be limited
in terms of the field size reserved in their record keeping systems
or databases for quantity of futures contracts traded or held. For
example, if a system is constructed to reserve 4 decimal digits, or
the binary equivalent thereof, for the quantity field, the maximum
number of futures contracts may be limited to 9,999. Or, if the
quantity field is limited to 5 digits, the maximum quantity may be
99,999. This may be problematic if the value to be transferred is
greater than $1 times that maximum quantity.
[0021] Thus, in an alternate embodiment, an "analog" payer contract
may be defined instead of, or in addition to, the binary payer
contract. It will be recognized that the binary payer contract is a
variant of the analog payer contract in which case it need not be
specifically defined. Analog payer contracts may be valued on an
analog scale akin to a standard index futures contract, having a
quantity, which may be greater than or equal to 1, and price
associated therewith. Thus, they may be cash-settled at, for
example, a multiplier $X, e.g. a pseudo quantity, multiplied by an
arbitrary value or Final Settlement Price that may range from
infinity (.infin.) to negative infinity (-.infin.). Alternatively,
the multiplier may be altered, e.g. instead of establishing the
multiplier at $1, it may be at $0.01, $10, $100, $1,000, $10,000,
$100,000 as appropriate for the specific application. The
multiplier and final settlement price may be determined based on
the amount of the payment to be made and, for example, the
respective record keeping fields sizes, i.e. such that the
magnitude of the respective multiplier/quantity and settlement
price values can be handled by the record keeping systems, e.g. to
avoid overflow, and still be used to handle the expected payment
amounts. It will be further appreciated that the balancing of the
magnitude of the multiplier versus the magnitude of the price may
vary but still achieve the same payment amount and, therefore, may
be based on other factors such as the convenience of the traders in
viewing, reporting and comprehending the values, etc.
[0022] For example, an analog payer contract having an initial
value of zero, may be valued at $1.times.Final Settlement Price at
settlement. The Final Settlement Price may be established at
10,000. Thus, the analog payer contract is valued at $10,000
(=$1.times.10,000.00). The account holding a single long position
(quantity=1) in the analog payer contract may receive $10,000 while
the account holding a single short position pays $10,000.
[0023] Payer contracts may have many applications, such as in the
context of exchange cleared interest rate swaps ("IRS") where these
contracts may be used to move the "price alignment interest"
("PAI"). For example, the buyer of an IRS may be required to pay
the seller a value calculated by reference to a fixed rate of
interest on a periodic basis for the life of the transaction. The
seller of an IRS may be required to pay the buyer a value
calculated by reference to a floating or dynamic rate of interest
on a periodic basis for the life of the transaction. Typically,
these payments are "netted" so that gross values are not
transferred but only net values. Payer contracts may be utilized to
provide for such transfers of value.
[0024] Payer contracts may also be: linked with interest rate
derivatives contracts for purposes of making what may essentially
be regarded as coupon payments from one party of the trade to the
other; linked with equity based derivatives contracts for purposes
of making what may essentially be regarded as dividend payments
from one party of the trade to the other; and/or used to implement
rolling spot contracts which are established from time to time in
the context of FX markets and are designed to price in manner
similar to the spot value of a currency by requiring a, typically,
daily payment that reflects the interest rate differential between
the two currencies.
[0025] Alternatively, or in addition thereto, payer contracts may
be used to implement fee payments, such as transaction fees. The
typical exchange fee model is based on volume or turnover, i.e.,
when a trade is consummated, both buyer and seller pay a
pre-determined exchange fee. However, futures contracts do not
typically contemplate fees based on the value or notional value of
the underlying instrument, which may be considered in a manner
similar to a management fee typically associated with fund
investments. While there have been some attempts to collect what
may be regarded as a form of management or holding fee in the
context of CME TRAKRS, i.e. non-traditional futures contracts
designed to provide customers with a cost-effective way to invest
in a broad-based index of stocks, bonds, currencies or other
financial instruments avoiding, for example, the need for a
portfolio manager and potential adverse tax consequences, and some
over-the-counter commodity indexes listed on CME Group facilities,
these products and this fee system required complex programming and
coordination with back-end bookkeeping services. Payer contracts
may be created to pay these fees from an account to the account of
the Exchange or possibly to other accounts held by those with
rights in a particular contract or other arrangements to share in
fees.
[0026] The disclosed payer contracts may be created with various
nomenclature designations, e.g., coupons, dividends, rolling spot
payments, swap payment, fee, etc. By attaching such nomenclature to
these contracts, akin to the way that the term "E-mini S&P 500
futures" may be associated in clearing and bookkeeping systems with
the ticker symbol "ES," the purpose of such payer contract may be
made transparent to those examining an account statement. Likewise,
payer contracts with different underlying purposes may be
constructed with different contract terms and conditions as deemed
most conducive to the purpose.
[0027] While the disclosed embodiments will be described in
reference to the CME, it will be appreciated that these embodiments
are applicable to any Exchange, including those which trade in
equities and other securities. The CME Clearing House clears,
settles and guarantees all matched transactions in CME contracts
occurring through its facilities. In addition, the CME Clearing
House establishes and monitors financial requirements for clearing
members and conveys certain clearing privileges in conjunction with
the relevant exchange markets.
[0028] Referring now to FIG. 1, there is shown a block diagram of
an exemplary network 100 for trading futures contracts, including
in which payer contracts may be implemented, according to the
disclosed embodiments. The network 100 couples market participants
104, 106, such as those entities 104 wishing or needing to make a
payment, also referred to as payors, and those entities 106 to
which the payment is to be made, also referred to as payees, with
an exchange 108, such as the CME, also referred to as a central
counterparty or intermediary, via a communications network 102,
such as the Internet, an intranet or other public or private,
secured or unsecured communications network or combinations
thereof. The network 100 may also be part of, or alternatively
coupled with a larger trading network, allowing market participants
104 106 to trade other products, such as futures contracts, options
contracts, foreign exchange instruments, etc., via the exchange
108, including derivatives contracts featuring periodic or
occasional payments prior to settlement. It will be appreciated
that the plurality of entities utilizing the disclosed embodiments,
e.g. the market participants 104, 106, may be referred to as
payors, payees, lenders, borrowers, traders, market makers or by
other nomenclature reflecting the role that the particular entity
is performing with respect to the disclosed embodiments and that a
given entity may perform more than one role depending upon the
implementation and the nature of the particular transaction being
undertaken, as well as the entity's contractual and/or legal
relationship with another market participant 104 106 and/or the
exchange 108.
[0029] Herein, the phrase "coupled with" is defined to mean
directly connected to or indirectly connected through one or more
intermediate components. Such intermediate components may include
both hardware and software based components. Further, to clarify
the use in the pending claims and to hereby provide notice to the
public, the phrases "at least one of <A>, <B>, . . .
and <N>" or "at least one of <A>, <B>, . . .
<N>, or combinations thereof" are defined by the Applicant in
the broadest sense, superseding any other implied definitions
herebefore or hereinafter unless expressly asserted by the
Applicant to the contrary, to mean one or more elements selected
from the group comprising A, B, . . . and N, that is to say, any
combination of one or more of the elements A, B, . . . or N
including any one element alone or in combination with one or more
of the other elements which may also include, in combination,
additional elements not listed.
[0030] The exchange 108 implements the functions of matching 110
buy/sell transactions, clearing 112 those transactions, settling
114 those transactions and managing risk 116 among the market
participants 104 106 and between the market participants and the
exchange 108, as well as payment functionality 122 for
administering payments between payors and payees as will be
described. The exchange 108 may be include or be coupled with one
or more database(s) 120 or other record keeping system which stores
data related to open, i.e. un-matched, orders, matched orders which
have not yet been delivered, as well as payments made or owing, or
combinations thereof.
[0031] Typically, the exchange 108 provides a "clearing house" (not
shown) which is a division of the Exchange 108 through which all
trades made must be confirmed, matched and settled each day until
offset or delivered. The clearing house is an adjunct to the
Exchange 108 responsible for settling trading accounts, clearing
trades, collecting and maintaining performance bond funds,
regulating delivery and reporting trading data. Essentially
mitigating credit. Clearing is the procedure through which the
Clearing House becomes buyer to each seller of a futures contract,
and seller to each buyer, also referred to as a "novation," and
assumes responsibility for protecting buyers and sellers from
financial loss by assuring performance on each contract. This is
effected through the clearing process, whereby transactions are
matched. A clearing member is a firm qualified to clear trades
through the Clearing House.
[0032] In the presently disclosed embodiments, the Exchange 108
assumes an additional role as the central counterparty in payment
transactions, i.e., the Exchange 108, via the margin mechanisms,
will become the payee to each payor and payor to each payee, and
assume responsibility for protecting payees and payors from
financial loss by assuring performance on each payment contract, as
is done in normal futures transactions. Additionally, the Exchange
108 may further assume the role as administrator of products, i.e.
derivatives contracts, which require payments, computing when a
payment is due, computing the amount of the payment and
automatically generating the payer contracts to effect the payment
by the due date. As used herein, the term "Exchange" 108 will refer
to the centralized clearing and settlement mechanisms, risk
management systems, etc., as described below, used for futures
trading, including the described enhancements to facilitate payment
transactions. By assuming this intermediary role and employing
credit screening and risk management mechanisms, derivatives
contracts having periodic or occasional payments may be implemented
for parties desiring such contracts. Further, additional revenue
sources for the Exchange may be facilitated, such as account
maintenance fees on accounts holding open futures positions.
[0033] Referring back to FIG. 1, a system 124 for facilitating a
payment between a first trader 104 and a second trader 106 by a
central counterparty 108 which requires the first and second
traders 104 106 to each maintain associated accounts in which funds
are deposited to cover trading losses. The system includes an
account database 120 stored in a memory 404 discussed below with
reference to FIG. 4, the account database 120 comprising a first
account record associated with the first trader 104 which includes
data reflecting funds maintained on account to cover trading losses
by the first trader 104, and a second account record associated
with the second trader 106 which includes data reflecting funds
maintained on account to cover trading losses by the second trader
106.
[0034] The system 124 further includes a payment processor 122
coupled with the database 120, or memory 404 storing it, and
operative to determine the amount of a payment to be made from one
of the first or second trader 104 106 to the other of the first or
second trader 104 106 at a settlement date, wherein the payment
processor is further operative to assign the first trader 104 a
first position in a futures contract characterized by the
settlement date, a quantity and a price, the first position being
characterized by a value based on the quantity and the price of the
futures contract as of the assignment, and assign the second trader
106 a second position, counter to the first position, in the
futures contract, the first and second traders not being identified
to each other. In one embodiment, the payment processor 122 is
operative to determine the payment amount upon occurrence of the
settlement date. Alternatively, the payment amount is determined in
advance of the settlement date.
[0035] The system 124 further includes a settlement processor 114
coupled with the database 120, or memory 404 storing it, and
operative to value, upon occurrence of the settlement date, the
futures contract at a spot value different from the price of the
futures contract, the difference being based on the determined
payment amount.
[0036] In addition, the system 123 includes a margin processor 116
coupled with the settlement processor 114 and the database 120, or
memory 404, and operative to modify the first and second account
records in the account database to reflect a credit to the account
of the first trader 104 and a debit from the account of the second
trader 106 in the amount of the difference between the value of the
first position and the spot value when the difference represents a
loss for the second trader 106, and modify the first and second
account records in the account database to reflect a debit from the
account of the first trader 104 and a credit to the account of the
second trader 106 in the amount of the difference between the value
of the first position and the spot value when the difference
represents a loss for the first trader 104.
[0037] In one embodiment, the payment processor 122 may be further
operative to automatically assign the first and second positions to
the first and second traders 104 106 based on a second position in
a second instrument held by the first trader 104 to which the
second trader 106 is a counterparty. For example, the second
instrument may include a interest rate derivative, the payment
comprising a coupon payment, the second instrument may include an
equity based derivatives contract, the payment comprising a
dividend payment, the second instrument may include a foreign
exchange spot contract, the payment comprising an interest rate
differential payment, the second instrument may include interest
rate swap, the payment comprising an interest payment, the second
instrument may include a loan of collateral, the payment comprising
an interest payment, the payment may include a transaction fee, or
combinations thereof.
[0038] In one embodiment, the quantity of futures contract may be
1, the payment processor 122 being further operative to assign the
first and second positions in a plurality of the futures contract,
the quantity of the plurality of the futures contract being
determined based on the payment amount. For example, the value of
the first and second positions as of the assignment may be zero
wherein the spot value is non-zero. Alternatively, the spot value
may be valued based on a multiplier and a final settlement value,
wherein the multiplier may be 0.01, 0.10, 1.00, 10.00, 100.00,
1000.00, 10,000.00, or some other value.
[0039] In one embodiment, the value of the first and second
positions as of the assignment may be non-zero, such as based on a
multiplier and a final settlement value, and wherein the spot value
may be zero. The multiplier may include 0.01, 0.10, 1.00, 10.00,
100.00, 1000.00, 10,000.00, or some other value.
[0040] Referring to FIG. 2, there is shown a block diagram of an
exemplary implementation of the system 124 for facilitating
payments between counterparties, e.g. first and second traders, by
a central counterparty which requires the first and second traders
to each maintain associated accounts in which funds are deposited
to cover trading losses, the central counterparty comprising a
processor 202 and a memory 204 coupled therewith, such as the
processor 402 and memory 404 shown in FIG. 4 and described in more
detail below. The system 124 includes an account database 120
stored in the memory 204, the account database 120 comprising a
first account record associated with the first trader 104 which
includes data reflecting funds maintained on account to cover
trading losses by the first trader 104, and a second account record
associated with the second trader 106 which includes data
reflecting funds maintained on account to cover trading losses by
the second trader 106. The system 124 further includes first logic
206 stored in the memory 204 and executable by processor 202 to
determine the amount of a payment to be made from one of the first
or second trader 104 106 to the other of the first or second trader
104 106 at a settlement date. The first logic 206 may be further
executable to assign the first trader 104 a first position in a
futures contract characterized by the settlement date, a quantity
and a price, the first position being characterized by a value
based on the quantity and the price of the futures contract as of
the assignment, and assign the second trader 106 a second position,
counter to the first position, in the futures contract, the first
and second traders 104 106 not being identified to each other.
[0041] The system 124 further includes second logic 208 stored in
the memory 204 and executable by the processor 202 to value, upon
occurrence of the settlement date, the futures contract at a spot
value different from the price of the futures contract, the
difference being based on the determined payment amount.
[0042] In addition, the system 124 includes third logic 210 stored
in the memory 204 and executable by the processor 202 to modify the
first and second account records in the account database to reflect
a credit to the account of the first trader 104 and a debit from
the account of the second trader 106 in the amount of the
difference between the value of the first position and the spot
value when the difference represents a loss for the second trader
106, and modify the first and second account records in the account
database to reflect a debit from the account of the first trader
104 and a credit to the account of the second trader 106 in the
amount of the difference between the value of the first position
and the spot value when the difference represents a loss for the
first trader 104.
[0043] FIG. 3 depicts a flow chart showing operation of the system
of FIGS. 1 and 2. In particular FIG. 3 shows a computer implemented
method of facilitating a payment between a first trader and a
second trader by a central counterparty which requires the first
and second traders to each maintain associated accounts in which
funds are deposited to cover trading losses, the central
counterparty comprising a payment processor 122, a settlement
processor 114, a margin processor 116, and a memory (not shown)
such as the memory 404 of FIG. 4, coupled with the payment,
settlement and margin processors 122 114 116. The method includes:
providing, by the central counterparty, an account database stored
in the memory, the account database comprising a first account
record associated with the first trader which includes data
reflecting funds maintained on account to cover trading losses by
the first trader, and a second account record associated with the
second trader which includes data reflecting funds maintained on
account to cover trading losses by the second trader (block 302);
determining, by the payment processor, the amount of a payment to
be made from one of the first or second trader to the other of the
first or second trader at a settlement date (block 304), such as
upon occurrence of the settlement date or prior thereto; assigning,
by the payment processor, the first trader a first position in a
futures contract characterized by the settlement date, a quantity
and a price, the first position being characterized by a value
based on the quantity and the price of the futures contract as of
the assigning (block 306); assigning, by the payment processor, the
second trader a second position, counter to the first position, in
the futures contract, the first and second traders not being
identified to each other (block 308); valuing, by the settlement
processor upon occurrence of the settlement date, the futures
contract at a spot value different from the price of the futures
contract, the difference being based on the determined payment
amount (block 310); modifying, by the margin processor, the first
and second account records in the account database to reflect a
credit to the account of the first trader and a debit from the
account of the second trader in the amount of the difference
between the value of the first position and the spot value when the
difference represents a loss for the second trader (block 312); and
modifying, by the margin processor, the first and second account
records in the account database to reflect a debit from the account
of the first trader and a credit to the account of the second
trader in the amount of the difference between the value of the
first position and the spot value when the difference represents a
loss for the first trader (block 314).
[0044] In one embodiment, the assigning to the first and second
traders is automatically performed by the central counterparty
based on a second position in a second instrument held by the first
trader to which the second trader is a counterparty. For example,
the second instrument may include a interest rate derivative, the
payment comprising a coupon payment, the second instrument may
include an equity based derivatives contract, the payment
comprising a dividend payment, the second instrument may include a
foreign exchange spot contract, the payment comprising an interest
rate differential payment, the second instrument may include
interest rate swap, the payment comprising an interest payment, the
second instrument may include a loan of collateral, the payment
comprising an interest payment, the payment may include a
transaction fee, or combinations thereof
[0045] In one embodiment, the quantity of futures contract may be
1, the assigning of the first and second positions to the first and
second traders respectively, further comprising assigning the first
and second positions in a plurality of the futures contract, the
quantity of the plurality of the futures contract being determined
based on the payment amount.
[0046] In one embodiment, the value of the first and second
positions as of the assigning may be zero and the spot value may be
non-zero, such as based on a multiplier and a final settlement
value. The multiplier may include 0.01, 0.10, 1.00, 10.00, 100.00,
1000.00, 10,000.00, or other value.
[0047] In embodiment, the value of the first and second positions
as of the assigning may be non-zero wherein the spot value is zero.
The value of the first and second positions may be based on a
multiplier and a final settlement value where the multiplier may be
0.01, 0.10, 1.00, 10.00, 100.00, 1000.00, 10,000.00 or another
value.
[0048] Referring to FIG. 4, an illustrative embodiment of a general
computer system 400 is shown. The computer system 400 can include a
set of instructions that can be executed to cause the computer
system 400 to perform any one or more of the methods or computer
based functions disclosed herein. The computer system 400 may
operate as a standalone device or may be connected, e.g., using a
network, to other computer systems or peripheral devices. Any of
the components discussed above may be a computer system 400 or a
component in the computer system 400. The computer system 400 may
implement a match engine, margin processing, payment or clearing
function on behalf of an exchange, such as the Chicago Mercantile
Exchange, of which the disclosed embodiments are a component
thereof.
[0049] In a networked deployment, the computer system 400 may
operate in the capacity of a server or as a client user computer in
a client-server user network environment, or as a peer computer
system in a peer-to-peer (or distributed) network environment. The
computer system 400 can also be implemented as or incorporated into
various devices, such as a personal computer (PC), a tablet PC, a
set-top box (STB), a personal digital assistant (PDA), a mobile
device, a palmtop computer, a laptop computer, a desktop computer,
a communications device, a wireless telephone, a land-line
telephone, a control system, a camera, a scanner, a facsimile
machine, a printer, a pager, a personal trusted device, a web
appliance, a network router, switch or bridge, or any other machine
capable of executing a set of instructions (sequential or
otherwise) that specify actions to be taken by that machine. In a
particular embodiment, the computer system 400 can be implemented
using electronic devices that provide voice, video or data
communication. Further, while a single computer system 400 is
illustrated, the term "system" shall also be taken to include any
collection of systems or sub-systems that individually or jointly
execute a set, or multiple sets, of instructions to perform one or
more computer functions.
[0050] As illustrated in FIG. 4, the computer system 400 may
include a processor 402, e.g., a central processing unit (CPU), a
graphics processing unit (GPU), or both. The processor 402 may be a
component in a variety of systems. For example, the processor 402
may be part of a standard personal computer or a workstation. The
processor 402 may be one or more general processors, digital signal
processors, application specific integrated circuits, field
programmable gate arrays, servers, networks, digital circuits,
analog circuits, combinations thereof, or other now known or later
developed devices for analyzing and processing data. The processor
402 may implement a software program, such as code generated
manually (i.e., programmed).
[0051] The computer system 400 may include a memory 404 that can
communicate via a bus 408. The memory 404 may be a main memory, a
static memory, or a dynamic memory. The memory 404 may include, but
is not limited to computer readable storage media such as various
types of volatile and non-volatile storage media, including but not
limited to random access memory, read-only memory, programmable
read-only memory, electrically programmable read-only memory,
electrically erasable read-only memory, flash memory, magnetic tape
or disk, optical media and the like. In one embodiment, the memory
404 includes a cache or random access memory for the processor 402.
In alternative embodiments, the memory 404 is separate from the
processor 402, such as a cache memory of a processor, the system
memory, or other memory. The memory 404 may be an external storage
device or database for storing data. Examples include a hard drive,
compact disc ("CD"), digital video disc ("DVD"), memory card,
memory stick, floppy disc, universal serial bus ("USB") memory
device, or any other device operative to store data. The memory 404
is operable to store instructions executable by the processor 402.
The functions, acts or tasks illustrated in the figures or
described herein may be performed by the programmed processor 402
executing the instructions 412 stored in the memory 404. The
functions, acts or tasks are independent of the particular type of
instructions set, storage media, processor or processing strategy
and may be performed by software, hardware, integrated circuits,
firm-ware, micro-code and the like, operating alone or in
combination. Likewise, processing strategies may include
multiprocessing, multitasking, parallel processing and the
like.
[0052] As shown, the computer system 400 may further include a
display unit 414, such as a liquid crystal display (LCD), an
organic light emitting diode (OLED), a flat panel display, a solid
state display, a cathode ray tube (CRT), a projector, a printer or
other now known or later developed display device for outputting
determined information. The display 414 may act as an interface for
the user to see the functioning of the processor 402, or
specifically as an interface with the software stored in the memory
404 or in the drive unit 406.
[0053] Additionally, the computer system 400 may include an input
device 416 configured to allow a user to interact with any of the
components of system 400. The input device 416 may be a number pad,
a keyboard, or a cursor control device, such as a mouse, or a
joystick, touch screen display, remote control or any other device
operative to interact with the system 400.
[0054] In a particular embodiment, as depicted in FIG. 4, the
computer system 400 may also include a disk or optical drive unit
406. The disk drive unit 406 may include a computer-readable medium
410 in which one or more sets of instructions 412, e.g. software,
can be embedded. Further, the instructions 412 may embody one or
more of the methods or logic as described herein. In a particular
embodiment, the instructions 412 may reside completely, or at least
partially, within the memory 404 and/or within the processor 402
during execution by the computer system 400. The memory 404 and the
processor 402 also may include computer-readable media as discussed
above.
[0055] The present disclosure contemplates a computer-readable
medium that includes instructions 412 or receives and executes
instructions 412 responsive to a propagated signal, so that a
device connected to a network 420 can communicate voice, video,
audio, images or any other data over the network 420. Further, the
instructions 412 may be transmitted or received over the network
420 via a communication interface 418. The communication interface
418 may be a part of the processor 402 or may be a separate
component. The communication interface 418 may be created in
software or may be a physical connection in hardware. The
communication interface 418 is configured to connect with a network
420, external media, the display 414, or any other components in
system 400, or combinations thereof. The connection with the
network 420 may be a physical connection, such as a wired Ethernet
connection or may be established wirelessly as discussed below.
Likewise, the additional connections with other components of the
system 400 may be physical connections or may be established
wirelessly.
[0056] The network 420 may include wired networks, wireless
networks, or combinations thereof. The wireless network may be a
cellular telephone network, an 802.11, 802.16, 802.20, or WiMax
network. Further, the network 420 may be a public network, such as
the Internet, a private network, such as an intranet, or
combinations thereof, and may utilize a variety of networking
protocols now available or later developed including, but not
limited to TCP/IP based networking protocols.
[0057] While the computer-readable medium is shown to be a single
medium, the term "computer-readable medium" includes a single
medium or multiple media, such as a centralized or distributed
database, and/or associated caches and servers that store one or
more sets of instructions. The term "computer-readable medium"
shall also include any medium that is capable of storing, encoding
or carrying a set of instructions for execution by a processor or
that cause a computer system to perform any one or more of the
methods or operations disclosed herein.
[0058] In a particular non-limiting, exemplary embodiment, the
computer-readable medium can include a solid-state memory such as a
memory card or other package that houses one or more non-volatile
read-only memories. Further, the computer-readable medium can be a
random access memory or other volatile re-writable memory.
Additionally, the computer-readable medium can include a
magneto-optical or optical medium, such as a disk or tapes or other
storage device to capture carrier wave signals such as a signal
communicated over a transmission medium. A digital file attachment
to an e-mail or other self-contained information archive or set of
archives may be considered a distribution medium that is a tangible
storage medium. Accordingly, the disclosure is considered to
include any one or more of a computer-readable medium or a
distribution medium and other equivalents and successor media, in
which data or instructions may be stored.
[0059] In an alternative embodiment, dedicated hardware
implementations, such as application specific integrated circuits,
programmable logic arrays and other hardware devices, can be
constructed to implement one or more of the methods described
herein. Applications that may include the apparatus and systems of
various embodiments can broadly include a variety of electronic and
computer systems. One or more embodiments described herein may
implement functions using two or more specific interconnected
hardware modules or devices with related control and data signals
that can be communicated between and through the modules, or as
portions of an application-specific integrated circuit.
Accordingly, the present system encompasses software, firmware, and
hardware implementations.
[0060] In accordance with various embodiments of the present
disclosure, the methods described herein may be implemented by
software programs executable by a computer system. Further, in an
exemplary, non-limited embodiment, implementations can include
distributed processing, component/object distributed processing,
and parallel processing. Alternatively, virtual computer system
processing can be constructed to implement one or more of the
methods or functionality as described herein.
[0061] Although the present specification describes components and
functions that may be implemented in particular embodiments with
reference to particular standards and protocols, the invention is
not limited to such standards and protocols. For example, standards
for Internet and other packet switched network transmission (e.g.,
TCP/IP, UDP/IP, HTML, HTTP, HTTPS) represent examples of the state
of the art. Such standards are periodically superseded by faster or
more efficient equivalents having essentially the same functions.
Accordingly, replacement standards and protocols having the same or
similar functions as those disclosed herein are considered
equivalents thereof.
[0062] The illustrations of the embodiments described herein are
intended to provide a general understanding of the structure of the
various embodiments. The illustrations are not intended to serve as
a complete description of all of the elements and features of
apparatus and systems that utilize the structures or methods
described herein. Many other embodiments may be apparent to those
of skill in the art upon reviewing the disclosure. Other
embodiments may be utilized and derived from the disclosure, such
that structural and logical substitutions and changes may be made
without departing from the scope of the disclosure. Additionally,
the illustrations are merely representational and may not be drawn
to scale. Certain proportions within the illustrations may be
exaggerated, while other proportions may be minimized. Accordingly,
the disclosure and the figures are to be regarded as illustrative
rather than restrictive.
[0063] One or more embodiments of the disclosure may be referred to
herein, individually and/or collectively, by the term "invention"
merely for convenience and without intending to voluntarily limit
the scope of this application to any particular invention or
inventive concept. Moreover, although specific embodiments have
been illustrated and described herein, it should be appreciated
that any subsequent arrangement designed to achieve the same or
similar purpose may be substituted for the specific embodiments
shown. This disclosure is intended to cover any and all subsequent
adaptations or variations of various embodiments. Combinations of
the above embodiments, and other embodiments not specifically
described herein, will be apparent to those of skill in the art
upon reviewing the description.
[0064] The Abstract of the Disclosure is provided to comply with 37
C.F.R. .sctn.1.72(b) and is submitted with the understanding that
it will not be used to interpret or limit the scope or meaning of
the claims. In addition, in the foregoing Detailed Description,
various features may be grouped together or described in a single
embodiment for the purpose of streamlining the disclosure. This
disclosure is not to be interpreted as reflecting an intention that
the claimed embodiments require more features than are expressly
recited in each claim. Rather, as the following claims reflect,
inventive subject matter may be directed to less than all of the
features of any of the disclosed embodiments. Thus, the following
claims are incorporated into the Detailed Description, with each
claim standing on its own as defining separately claimed subject
matter.
[0065] It is therefore intended that the foregoing detailed
description be regarded as illustrative rather than limiting, and
that it be understood that it is the following claims, including
all equivalents, that are intended to define the spirit and scope
of this invention.
* * * * *