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WO2006060880A1 - Transfert et livraison d'argent en devise d'une valeur equivalente convenue en devise etrangere - Google Patents

Transfert et livraison d'argent en devise d'une valeur equivalente convenue en devise etrangere Download PDF

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Publication number
WO2006060880A1
WO2006060880A1 PCT/AU2005/001880 AU2005001880W WO2006060880A1 WO 2006060880 A1 WO2006060880 A1 WO 2006060880A1 AU 2005001880 W AU2005001880 W AU 2005001880W WO 2006060880 A1 WO2006060880 A1 WO 2006060880A1
Authority
WO
WIPO (PCT)
Prior art keywords
matching
currency
money
users
transaction settlement
Prior art date
Application number
PCT/AU2005/001880
Other languages
English (en)
Inventor
Michael Stenford
Original Assignee
Gome, Peter
Priority date (The priority date is an assumption and is not a legal conclusion. Google has not performed a legal analysis and makes no representation as to the accuracy of the date listed.)
Filing date
Publication date
Priority claimed from AU2004907066A external-priority patent/AU2004907066A0/en
Application filed by Gome, Peter filed Critical Gome, Peter
Priority to AU2005313866A priority Critical patent/AU2005313866A1/en
Publication of WO2006060880A1 publication Critical patent/WO2006060880A1/fr
Priority to GB0711162A priority patent/GB2437661A/en

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Classifications

    • GPHYSICS
    • G06COMPUTING; CALCULATING OR COUNTING
    • G06QINFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q40/00Finance; Insurance; Tax strategies; Processing of corporate or income taxes
    • GPHYSICS
    • G06COMPUTING; CALCULATING OR COUNTING
    • G06QINFORMATION AND COMMUNICATION TECHNOLOGY [ICT] SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES; SYSTEMS OR METHODS SPECIALLY ADAPTED FOR ADMINISTRATIVE, COMMERCIAL, FINANCIAL, MANAGERIAL OR SUPERVISORY PURPOSES, NOT OTHERWISE PROVIDED FOR
    • G06Q20/00Payment architectures, schemes or protocols

Definitions

  • the present invention relates to methods and systems for completing money transfer from one currency to another, and more particularly to completing such transfers without performing conventional foreign exchange transactions.
  • Patent US2003014351 relates to systems and methods for facilitating the trading of items or securities and more particularly to systems and methods for facilitating the electronic bartering of items or securities by means of a computer-based system for bartering, exchanging or selling.
  • Patent WO2004077255 relates generally to a network-based marketplace, and more particularly to a network-based marketplace for exchanging products.
  • a match-and-swap marketplace is provided for the efficient undertaking of barter-type exchanges between a multiple parties.
  • the present invention relates to a method and system for international money transfers, involving currency conversion and transaction settlement; said system being used to match a plurality of opposite money transfer requirements for each of a plurality of currency pairs.
  • the matched money in a particular currency provides the funding for transaction settlements of money transfers from other currencies into that currency. So although matching occurs, exchange between the matching participants does not occur because matching participants are matching two different currencies of a currency pair.
  • the matching process is used as a basis for agreement to release matched currency amounts for funding of transaction settlements in the same currency.
  • the bank or agent is instructed to prepare either a bank draft for the foreign currency amount made out to the specified recipient, or transfer the money electronically to the specified recipient.
  • the sender must complete a foreign exchange transaction before the foreign currency can be transferred to the recipient.
  • the buying rate for a foreign currency will normally be more expensive than the typical interbank mid-market exchange rate for that currency pair at the time of the transaction. This difference is the cost of the market-making spread charged by the banks or agents that provide such foreign exchange and money transfer services.
  • the present invention overcomes the above-mentioned and other shortcomings of international money transfer with a novel method and system for international money transfer.
  • Businesses currently lack efficient off-market means for transferring large sums from one currency to another, to satisfy funding requirements in the other currency, as an alternative to individual transaction settlements in that other currency.
  • Traders wishing to execute foreign exchange in conjunction with money transfer also lack a means to meet and directly manage their trading directly with other traders in off-market matched transactions.
  • Brokers offering commission-free trading fail to mention that the bid/offer spread paid by the client in buying or selling a given financial instrument through a market-based transaction is often where most of the money is made.
  • Brokers offering commission-free trading are brokers that work in conjunction with market-makers. The integration of broking and market-making services has occurred concurrently with the development of electronic trading.
  • execution costs for market-based transactions have historically comprised a combination of a fixed transaction commission and a bid/offer spread.
  • the bid/offer spread can be costly and is normally the largest component of the total transaction cost because it is directly proportional to the size of the transaction.
  • this true cost is often less evident to a customer than an attractively low, nominal transaction commission.
  • Such market participants may include individuals with requirements to make single or regular money transfers to a foreign currency account, businesses with export income in a foreign currency or a need to purchase assets, goods or services in a foreign currency using either spot or forward FX contracts, and institutional fund managers with requirements to make regular purchases or sales of foreign equities using either spot or forward FX contracts.
  • Off-market transfers are common practice for transferring the ownership of shares.
  • Instinet's customers include institutional clients wishing to reduce FX transaction costs, lnstinet collaborates with CitiBank. lnstinet internally matches opposite orders in a range of currency pairs. Trades are confirmed and settled in the Citigroup back office relative to an agreed future global benchmark mid-market rate, lnstinet FX Cross claims to be able to significantly reduce bid/offer spreads using its matching techniques.
  • the present invention to provide a method and system for international money transfers that reduces or avoids the requirement for conventional foreign exchange transactions.
  • the method and system uses a novel form of matching which locks in a commitment by the users to make their deposited funds available not for exchange with other users, but rather for funding the commitments of other users to deliver money to specified recipients.
  • International Money Transfer Any transfer from one currency to another; including transfers from a sender in one country to a recipient in another country.
  • Base Currency The selected base currency of a currency pair used for matching defining unit sizes for matching
  • Units Blocks of base currency used for matching against non-base currency. Typical units sizes would be denominated in 1000s, 100s, 10s, 1s and 0.01s of a base currency unit.
  • Over-match and Under-match Where a user matches more or less currency respectively, than is required to secure the foreign currency equivalent value if its intended international money transfer amount.
  • the present invention is a method and system for performing international money transfers without the requirement for the users or the system to perform foreign exchange transactions for the majority of the money transferred.
  • the invention comprises a website, linked to a matching and transaction settlement computer, where a plurality of users can meet and interactively match their opposite money transfer requirements with each other in units of their respective currencies.
  • the units are broken into varying sizes; for example 1000s, suitable sizes and stacked in timing priority order or some other order for matching.
  • the users must first deposit money to the system and by a fixed cut-off time each trading day must select their matching strategy and submit their matching requests.
  • Completion of the matching process for senders can complete a transfer of ownership of senders' money in a currency zone. The money is then available for distribution to recipients in that currency zone. This concludes these international money transfers without conventional market-based foreign exchange transactions.
  • the assumed base currency of the currency pair in question is the currency of the sender of the money.
  • the process comprises the following steps:
  • the sender of the money enters into an agreement with the system operator to enter its website and deposit funds in a base currency of the currency pair of this example.
  • the sender gives up ownership or control of the money once the match has taken place. At this point in time all that is agreed between the website and the sender is that in return for a matched amount of the sender's base currency an equivalent value amount denominated in a specified foreign currency will be paid to a specified recipient. No currency exchange takes place; only an agreement on the basis for calculating the future foreign currency equivalent value of the money to be paid to the recipient.
  • LIMITATIONS RELATING TO TRANSFERS OF EXACT AMOUNTS Exchange rates can unpredictably vary from day to day by +/-1 % or more.
  • Users transferring money from a non-base currency to a base currency can break down orders into base currency units and know that this amount, if matched, will result in the required foreign currency transfer amount as long as the unit sizes available from the system allow definition of an exact amount.
  • a refundable margin must be included in the user's non-base currency payment to fund matching if the exchange rate moves against the user between the time of payment and the time of fixing the match. Surplus funds may be returned to the users.
  • Users transferring money from a base currency to a non-base currency face a different problem. If they require to transfer an exact amount to the non-base currency they cannot specify this exact amount in non-base currency units. Therefore transfers cannot be matched exactly.
  • the exchange rate movement may result in +/-1% or more difference between the amount required to be transferred and the amount actually transferred on a given day. This means that if the user requires to send an exact amount a number of options exist.
  • under-matching can be used to ensure that a balance will have to be paid using a conventional foreign exchange transaction.
  • Another option is for over-matching to be recorded by the System as a foreign currency credit for the sender with only an exact specified amount of foreign currency being delivered to the specified recipient.
  • an overpayment may also be delivered to the specified recipient and this may be resolved between the user and the recipient.
  • the present invention is of particular value where the amounts of money to be transferred are relatively large and the difference between the mid-market interbank rate and the rate available from conventional foreign exchange will result in a significant relative cost to the user.
  • the present invention relates to a method using pairs of same-currency money transfers between customers and recipients that have been specified by other customers. This method artificially creates the end results of foreign exchange (FX) transactions, in conjunction with money transfers, from customers to their specified recipients.
  • FX foreign exchange
  • the present invention is a method using pairs of same-currency money transfers between two or more customers, to artificially create the end results of foreign exchange (FX) transactions, in conjunction with money transfers, for each of those customers. More particularly, but not by way of limitation, the present invention provides a means for cost- effectively transferring large sums of money from one currency to another, to satisfy funding requirements in the other currency, as an alternative to performing individual FX transaction settlements in that other currency.
  • FX foreign exchange
  • the present invention is a business scheme that enables customers to participate in making their own market, rather than a business scheme that is a market-maker.
  • a method and system for performing international money transfers from one currency to another with limited, if any, requirement for conventional foreign exchange transactions comprising a web-based matching and transaction settlement business linked to a matching and transaction settlement computer system.
  • the matching process establishes the basis for transfer of ownership of a plurality of senders' money to a plurality of recipients in the same currency. Hence the money used to complete the international money transfers for each sender originates in the same country or currency zone as the recipient's bank account.
  • the present invention is a computer-based matching and transaction settlement system for completing money transfer and delivery of a currency's agreed foreign currency equivalent value, in a specified foreign currency, from one or more users of the system to one or more specified recipients that are not users of the system.
  • the system comprises an internet website linked to a matching and transaction settlement computer system; a plurality of remote computers with internet access to the website corresponding to a plurality of users, said remote computers enabling said users to deposit money and submit matching and delivery instructions into the system to direct matching and delivery of matched money's agreed foreign currency equivalent value in that foreign currency to specified recipients.
  • the system is used to match equal and opposite money transfer requirements for each of a plurality of currency pairs.
  • a key novelty of the invention is that matched money in a particular currency provides the funding for transaction settlements of money transfers from other currencies into that currency.
  • An embodiment of the present invention enables matching of opposite foreign exchange and money transfer requirements in order to direct the execution of same-currency money transfers to specified recipients as illustrated in Figures 1 and 4. This process artificially creates the end results of FX, or currency conversion, trades without such FX trades actually occurring.
  • An embodiment of the present invention involves a novel method using a web-based business platform as a meeting place for customers seeking to match equal and opposite money transfer requirements in order to deliver foreign currency to a specified recipient.
  • Figure 1 provides a schematic description of the means of effect comprising the interaction of a physical system and process.
  • GBP is the base currency for GBP/AUD customer trades and a customer wishes to transfer GBP100,000 equivalent to a recipient bank account in Australia.
  • the customer specifies the recipient bank account details and submits an order.
  • the customer receives an order number from forexMatch. This order number, when combined with User ID and password, allows the customer to gain access to the web page relevant to the order's currency pair.
  • the customer can then direct the matching process by breaking down the amount to be transacted into units of base currency or may, as an option, direct forexMatch to break the amount down into units.
  • the unique order ID will be visible to the customer when he/she enters the web page and will apply to every unit that makes up part of the total customer order.
  • the units may be, for example, any combination of 50,100, 500, 1000, 5000, etc Pound units.
  • the units of the order will appear in stacks on the web page.
  • Figure 3 illustrates how, in this embodiment, the customer can see the number of orders in each stack and the position of its order.
  • Figure 3 also indicates the liquidity in each stack. All orders are placed in chronological order and must be matched prior to a cut-off time before the next fixing against a recognised global FX mid-market rate.
  • the matching protocols in this example are as follows, but may vary and are not limited to one set of protocols that cannot, from time to time, be revised:
  • Anonymity of customers searching for matches through the website can be achieved by a variety of methods. For example, a customer only being able to see its own order number. All other customer orders are expressed in terms of quantity only and in terms of the position of those other orders relative to the customer order (See Figure 3).
  • This downward matching sequence will continue from highest denomination to lowest denomination until all possible matches are completed.
  • Order revision will result in the revised orders being located at the ends of the relevant order stacks. No customer can gain access, through the website, to the identities of the owners of other orders in the order stacks.
  • Each customer can see its order, and order positions relative to other customer orders, in the order stacks on the website as illustrated in Figure 3, which shows Customer B's view.
  • a recognised global mid-market benchmark rate such as Telerate or WM/Reuters is used to calculate the number of AUD required to match each GBP for either spot or forward trade dates.
  • the website allows each trader to decide what parcel sizes and value date of base currency to trade.
  • options may include GBP10, GBP50, GBP100, GBP500 and GBP1000.
  • the matching value of the non-base currency will be an odd amount based on the benchmark forward rate applicable on the day the match is agreed.
  • customers will be required to deposit adequate margin cover the cost of future adverse exchange rate movements. These margins will be larger than those required for spot trades.
  • Customer A is issued with an eight digit order ID.
  • Each GBP1000 unit is tagged with the customer ID and stacked sequentially in the order stack. The position in the stack is based on the time the order is placed and can be seen by Customer A.
  • the customer will be issued with access to the interactive website and will be able to enter the site where he/she wishes to trade currencies.
  • the customer will be able to see how many orders exist in the stack for each unit size.
  • the customer may, at any time prior to the cut-off time, vary the size of its units.
  • An embodiment of the present invention artificially creates the results of one or more pairs of equal and opposite FX currency pair transactions in a given currency pair. For example one FX transaction results in conversion of 500 British Pounds (GBP) to Australian Dollars (AUD). The opposite transaction results in conversion of the relevant amount of Australian Dollars into British Pounds.
  • GBP British Pounds
  • AUD Australian Dollars
  • An embodiment of the present invention is a business scheme that artificially creates the end results of two otherwise unrelated equal and opposite FX transactions through the banking system, by execution of one same currency money transfer in each of the currencies of the subject currency pair.
  • the method can also be applied to forward FX transactions.
  • An embodiment of the present invention is a business (referred to herein as forexMatch) that seeks customers that require currency conversion incorporating money transfer to meet funding requirements in a particular currency, instead of performing individual FX transaction settlements in that currency.
  • Figure 4 provides a schematic description of the means of effect comprising the interaction of a physical system and process.
  • ForexMatch would communicate with many potential customers to establish a range of currency conversion options that would be acceptable to each, and then identify which parties may be suitable for matching.
  • matching terms and conditions can be agreed with each of two or more parties, the parties are introduced and enter a contractual agreement to transfer money to each other on a single occasion or more often as described in the agreement. A fee is paid by each of the parties to GenevaMatch.
  • the basis for the amounts of money transferred would be the mid-market exchange rate from a recognised data source that is applicable at the agreed future time and date of each transfer.
  • the business scheme artificially creates the end results of currency conversion incorporating money transfer for each customer by negotiating a basis for an agreement between the customers.
  • the agreement involves each customer making a same currency money transfer to the other on an agreed future date based on an agreed benchmark mid-market spot or forward exchange rate, as illustrated in Figure 4. More than two customers may be involved in such an agreement.
  • Customer B signs a release for the money to enable its transfer to Customer B's account and sends this document to Customer A for countersignature and submission to the bank Customer B transfers money to its escrow account, which requires joint signature by Customer A to allow funds to be transferred to Customer A
  • both Customers submit countersigned transfer authorities to their counterparty's bank to complete the money transfers.
  • the result simulates a pair of opposite currency conversion (FX) and money transfer operations with no market-based bid/offer spread cost incurred.
  • the business scheme comprises the following characteristics and benefits: Avoids use of intermediaries including the banking system or financial services businesses working in partnership, or conjunction, with the banking system to perform FX transactions on behalf of customers;
  • An embodiment of the present invention uses pairs of off-market same currency transfers at an agreed future time and date to simulate the outcomes of conventional banking-system-based spot or forward FX transactions. This is achieved without the need to process those transactions through the banking system or through financial services businesses working in partnership, or conjunction, with the banking system.
  • Embodiments of the present invention all include a facilitation business, referred to herein as forex Match, that provides introduction services in the form of either personal introduction or an on-line meeting place. This enables customers to meet and match their equal and opposite money transfer and currency conversion requirements.
  • a facilitation business referred to herein as Forex Match
  • Embodiments of the invention have an objective of enabling money transfer operations that involve both currency conversion and money transfer to be performed without the need for market-based FX transactions.
  • the parties may enter into either a single transaction agreement or a term agreement that may involve a series of transactions.

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  • Business, Economics & Management (AREA)
  • Engineering & Computer Science (AREA)
  • Physics & Mathematics (AREA)
  • Strategic Management (AREA)
  • General Business, Economics & Management (AREA)
  • General Physics & Mathematics (AREA)
  • Accounting & Taxation (AREA)
  • Theoretical Computer Science (AREA)
  • Development Economics (AREA)
  • Economics (AREA)
  • Finance (AREA)
  • Marketing (AREA)
  • Technology Law (AREA)
  • Financial Or Insurance-Related Operations Such As Payment And Settlement (AREA)

Abstract

L'invention concerne un système informatique de règlement de transaction et de concordance pour réaliser un transfert et une livraison en devise étrangère spécifiée d'une valeur équivalente convenue en devise étrangère en provenance d'utilisateurs du système au bénéfice de destinataires dudit système. Les utilisateurs déposent l'argent et soumettent des instructions de concordance et de livraison dans le système orientant la concordance et la livraison aux destinataires spécifiés du montant d'argent concordant dans la devise concernée en valeur équivalente en devise étrangère convenue. Le système permet d'assurer la concordance de plusieurs exigences de transfert d'argent opposées pour chacune des nombreuses paires de devises. Le montant d'argent concordant dans une devise particulière assure le financement des règlements d'opérations de transfert d'argent d'autres devises dans la devise concernée. Les opérations de change classiques ne sont pas requises.
PCT/AU2005/001880 2004-12-10 2005-12-12 Transfert et livraison d'argent en devise d'une valeur equivalente convenue en devise etrangere WO2006060880A1 (fr)

Priority Applications (2)

Application Number Priority Date Filing Date Title
AU2005313866A AU2005313866A1 (en) 2004-12-10 2005-12-12 Money transfer and delivery of a currency's agreed foreign currency equivalent value
GB0711162A GB2437661A (en) 2004-12-10 2007-06-11 Money transfer and delivery of a currency's agreed foreign currency equivalent value

Applications Claiming Priority (2)

Application Number Priority Date Filing Date Title
AU2004907066 2004-12-10
AU2004907066A AU2004907066A0 (en) 2004-12-10 Method for off-market trading in foreign exchange in conjunction with money transfer, and off-market trading in other financial instruments

Publications (1)

Publication Number Publication Date
WO2006060880A1 true WO2006060880A1 (fr) 2006-06-15

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WO (1) WO2006060880A1 (fr)

Cited By (1)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
US8321327B1 (en) 2009-05-06 2012-11-27 ICAP North America, Inc. Mapping an over the counter trade into a clearing house

Citations (3)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
AU2003200649A1 (en) * 2002-02-27 2003-09-11 Technocash Pty Ltd Electronic Commerce Payment System
US20050060256A1 (en) * 2003-09-12 2005-03-17 Andrew Peterson Foreign exchange trading interface
US20050283422A1 (en) * 2004-06-16 2005-12-22 David Myr Centralized electronic currency trading exchange

Patent Citations (3)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
AU2003200649A1 (en) * 2002-02-27 2003-09-11 Technocash Pty Ltd Electronic Commerce Payment System
US20050060256A1 (en) * 2003-09-12 2005-03-17 Andrew Peterson Foreign exchange trading interface
US20050283422A1 (en) * 2004-06-16 2005-12-22 David Myr Centralized electronic currency trading exchange

Cited By (2)

* Cited by examiner, † Cited by third party
Publication number Priority date Publication date Assignee Title
US8321327B1 (en) 2009-05-06 2012-11-27 ICAP North America, Inc. Mapping an over the counter trade into a clearing house
US8612337B1 (en) 2009-05-06 2013-12-17 ICAP North America, Inc. Mapping an over the counter trade into a clearing house

Also Published As

Publication number Publication date
GB2437661A (en) 2007-10-31
GB0711162D0 (en) 2007-07-18

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