Canadian Patents Database / Patent 2203279 Summary

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(12) Patent Application: (11) CA 2203279
(54) English Title: METHODS AND APPARATUS RELATING TO THE FORMULATION AND TRADING OF RISK MANAGEMENT CONTRACTS
(54) French Title: PROCEDES ET APPAREILS DESTINES A L'ETABLISSEMENT ET A LA NEGOCIATION DE CONTRATS DE GESTION DES RISQUES
(51) International Patent Classification (IPC):
  • G06Q 10/00 (2012.01)
  • G06Q 40/04 (2012.01)
  • G06Q 40/00 (2012.01)
(72) Inventors :
  • SHEPHERD, IAN KENNETH (Australia)
(73) Owners :
  • ALICE CORPORATION PTY LTD (Australia)
(71) Applicants :
  • SHEPHERD, IAN KENNETH (Australia)
(74) Agent: BLAKE, CASSELS & GRAYDON LLP
(45) Issued:
(86) PCT Filing Date: 1995-12-07
(87) PCT Publication Date: 1996-06-13
Examination requested: 2002-11-01
(30) Availability of licence: N/A
(30) Language of filing: English

(30) Application Priority Data:
Application No. Country/Territory Date
PM9922 Australia 1994-12-07
PN4060 Australia 1995-07-07

English Abstract






The formulation of
multi-party risk management
contracts is described. An
ordering party (13) inputs, by
a data processing device (51),
contract data representing an
offered contract in a predetermined
phenomenon, the phenomenon
having a range of possible
outcomes at a time of maturity,
and the contract data specifying
the same entitlement for each
outcome due to the ordering party
at maturity and a consideration
due to a counterparty. The
potential counterparties (14) input,
by data processing means (51),
registering data relating to the
range of possible outcomes for
the predetermined phenomenon.
An offered contract is priced by
data processing apparatus (20)
by the steps of calculating a
counter consideration from each
counterparty's registering data
and comparing the ordering party
consideration with the calculated
counter considerations. A match
is made on the basis of the
comparison.


French Abstract

Une formulation de contrats de gestion de risques multipartie est divulguée. Une partie demanderesse (13) introduit, à l'aide d'un dispositif de traitement de données (51), des données représentant un contrat offert en rapport avec un phénomène prédéterminé, ce phénomène ayant plusieurs résultats possibles au moment de sa maturité et les données spécifiant les mêmes droits aux prestations pour la partie demanderesse à l'échéance pour chaque résultat et une redevance dû à une contrepartie. Les contreparties potentielles (14) introduisent, au moyen du dispositif de traitement de données (51), des données d'enregistrement portant sur la gamme des résultats possibles pour le phénomène prédéterminé en cause. Le contrat offert est valorisé par un appareil de traitement de données (20) qui calcule une contreredevance à partir des données introduites par chaque contrepartie et en comparant la redevance de la partie demanderesse avec les contreredevances calculées. On procède à un rapprochement en se basant sur le résultat de cette comparaison.


Note: Claims are shown in the official language in which they were submitted.


- 51 -

CLAIMS:

1. A data processing system to enable the formulation of multi-party risk
management contracts, the system comprising:
input means by which an ordering party can input contract data representing an
offered contract for a predetermined phenomenon, the phenomenon having a future
range of possible outcomes at a time of maturity, and said contract data specifying the
same entitlement for each said outcome due to the ordering party and a consideration
due to a counterparty, and at least one counterparty can input registering data for said
predetermined phenomena; and
data processing means for pricing and matching contracts from said contract
data and said registering data, said pricing including calculating a counter consideration
from each said registering data, and said matching including comparing said
consideration with each said counter consideration to match an offered contract with at
least one of said counterparties.

2. A data processing system as claimed in claim 1, wherein said
registering data for each possible outcome is the counterparty assessed probability of
that outcome eventuating at maturity.

3. A data processing system as claimed in claim 1 or claim 2, wherein
the contract match is made with the counterparty having the counter consideration
having the greatest difference between it and the specified consideration.

4. A data processing system as claimed in claim 1, wherein the
entitlement is due at maturity.


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5. A method to enable the formulation of multi-party risk management
contracts, the method comprising the steps of:
(a) inputting to data processing apparatus, by input means, ordering data
contract data representing an offered contract for a predetermined phenomenon, the
phenomenon having a range of possible outcomes at a time of maturity, said contract
data specifying the same entitlement for each said outcome due to the ordering party
and a consideration due to a counterparty;
(b) inputting to said data processing apparatus, by input means,
counterparty registering data relating to the range of possible outcomes for said
predetermined phenomenon; and
(c) pricing and matching the offered contract, by the data processing
apparatus, comprising the steps of:
(i) calculating a counter consideration from each counterparty registering
data;
(ii) comparing said consideration with each said counter consideration;
and
(iii) matching the contract on the basis of the comparison.

6. A method as claimed in claim 5, comprising the further step of
payment of the consideration by the matched counterparty to the ordering party on
matching of the contract.

7. A method as claimed in claim 5 or claim 6, comprising the further
step of payment of the entitlement by the ordering party to the counterparty on maturity
of the contract.


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8. A method as claimed in any one of claims 5 to 7, whereby the step of
matching includes selecting the counterparty having the counter consideration having
the greatest difference between it and the specified consideration.

9. A method as claimed in any one of claims 5 to 8, wherein said
registering data is the assessed probability of occurrence of each possible outcome, and
whereby said counter consideration is calculated by the summation over all possible
outcomes of the product of the respective entitlement and the assessed probability.

10. A data processing system to enable the formulation of multi-party risk
management contracts, the system comprising:
input means by which an ordering party can input contract data specifying an
entitlement due to the ordering party and a consideration due to a counterparty, both the
entitlement and the consideration being due on match of a contract, and at least one
counterparty can input counter considerations for the contract relevant to a range of
possible entitlements; and
data processing means for matching a contract from said consideration and the
counter consideration for the specified entitlement by comparing said consideration with
each said counter consideration to match an offered contract with at least one of said
counterparties.

11. A data processing system as claimed in claim 10, wherein the contract
match is made with the counterparty having the counter consideration having the
greatest difference between it and the specified consideration.

12. A data processing system as claimed in either one of claims 10 or 11,
wherein the contract matures on matching.





- 54 -

13. A method to enable the formulation of multi-party risk management
contracts, the method comprising the steps of:
(a) inputting to data processing apparatus, by input means, ordering party
contract data specifying an entitlement due to the ordering party and a consideration
due to a counterparty, both the entitlement and the consideration due on match of a
contract;
(b) inputting to said data processing apparatus, by input means,
counterparty counter considerations for the contract relevant to a range of possible
entitlements; and
(c) matching the offered contract, by the data processing apparatus,
comprising the steps of:
(i) comparing said consideration with said counter consideration for the
specified entitlement; and
(ii) matching the contract on the basis of the comparison.

14. A method as claimed in claim 13, whereby the step of matching
includes selecting the counterparty having the counter consideration having the greatest
difference between it and the specified consideration.

15. A method as claimed in either one of claims 13 or 14, comprising the
further step of the contract maturing on match.

16. A data processing system to enable the management of risk by the
formulation of risk management contracts, the system comprising:
data input means by which participating parties can input data concerning at
least one predetermined phenomenon, each phenomenon having a range of possible
outcomes and a future time of maturity, and





- 55 -

data processing means, coupled to each input means, for pricing and matching
contracts between participating parties, and wherein each contract is priced andmatched on the basis of offering data specifying entitlements due at maturity for the
range of possible outcomes for one or more of said phenomena, and registering data of
the likelihood of each outcome in said predetermined range of outcomes at maturity for
one or more of said phenomena, said offering data and said pricing data being derived
from said participating party data.

17. A data processing system as claimed in claim 16, wherein said
participating party data includes an attitude and/or objective to said one or more
phenomena.

18. A data processing system as claimed in claim 16 or 17, wherein said
participating party data further includes offering data and/or pricing data.

19. A method for enabling the management of risk by the formulation of
risk management contracts, the method comprising the steps of:
participating parties inputting, by at least one data input means, data
concerning at least one predetermined phenomenon, each said phenomenon having a
range of future outcomes and a future time of maturity; and
pricing and matching contracts between participating parties, by data
processing means, whereby each contract is priced and matched on the basis of offering
data specifying entitlements due at maturity for the range of possible outcomes for one
or more of said phenomena, and registering data of the likelihood of each outcome in
said predetermined range of outcomes at maturity for one or more of said phenomena,
said offering data and said pricing data being derived from said participating party data.





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20. A method as claimed in claim 19, whereby said participating party
data includes an attitude and/or objective to said one or more phenomena.

21. A method as claimed in claims 19 or 20, whereby said participating
party data further includes offering data and/or pricing data.

22. A data processing system to enable the formulation of multi-party risk
management contracts, the system comprising:
input means by which an ordering party can input contract data representing an
offered contract for a predetermined phenomenon, the phenomenon having a future
range of possible outcomes at a time of maturity, and said contract data specifying the
same entitlement for each said outcome due to the ordering party, and at least one
counterparty can input registering data for said predetermined phenomena; and
data processing means for pricing and matching contracts from said contract
data and said registering data, said pricing including calculating a consideration due to
the counterparty from each said registering data, and said matching including
comparing said considerations to match an offered contract with at least one of said
counterparties.


23. A data processing system as claimed in claim 22, wherein only those
counterparty considerations that satisfy a threshold consideration specified by the
ordering party are compared.

24. A method to enable the formulation of multi-party risk management
contracts, the method comprising the steps of:
(a) inputting to data processing apparatus, by input means, ordering data
contract data representing an offered contract for a predetermined phenomenon, the
phenomenon having a range of possible outcomes at a time of maturity, said contract


- 57 -

data specifying the same entitlement for each said outcome due to the ordering party;
(b) inputting to said data processing apparatus, by input means,
counterparty registering data relating to the range of possible outcomes for said
predetermined phenomenon; and
(c) pricing and matching the offered contract, by the data processing
apparatus, comprising the steps of:
(i) calculating a consideration due to each counterparty from each
counterparty registering data;
(ii) comparing said calculated considerations;
and
(iii) matching the contract on the basis of the comparison.

25. A method as claimed in claim 24, whereby the step of comparing
further includes accepting only those counterparty considerations that satisfy a threshold
consideration specified by the ordering party.

Note: Descriptions are shown in the official language in which they were submitted.

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Me~hods and Apparatus R~ in~ to the
Formulation and Trading of Risk Mauag. ' Contracts

Fielrl of th~ ,..l;on
The present invention is directed to m~tho~ and ap~lus relating to the
formulation and trading of risk management contracts. R~felcllce also is made tocollll ol~ly-owned T~ lional Patent Application No. PCT/AU93/00250 that discloses
similar methods and appal~us. The contents of the noted Inlelllational application are
incoll,-,lat~d herein by cross-rer.,rellce.

,.l of th~ Tnvention
In~el~tional Application No. PCT/AU93/00250 describes that individuals and
enterprises are continll~lly exposed to risk because of future events beyond their
control. The ~ ulcolne of those events can positively or negatively impact on their
wellbeing. Individuals and e~lel~,lises generally prefer not to face exposure to the
possibility of adverse consequences, regardless of their perctplion of the likelihood of
such events occurring. It is in their interest to consider foregoing 'resources' they
~;ullelllly possess if doing so would reduce the possibility of being exposed to future
outcomes.
Risk can take many forms in view of the large range and type of future events
which might result in adverse con~e~ e Risk that can be categorised as being
economic in nature includes: commodity prices, culrcl~cy exchange rates, interest rates,
propelly prices, share prices, inflation rates, colll~al~y performance and market event
based indices.
The capability to manage risk is becoming more important with the progression
of time because there is an ever increasing exposure to a wider generic range of future
phenomena beyond the control of individuals or elltel~lises. There is also a wider

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feasible range of possible future events, and greater unc~lLaillLy about the likelihood of
occul~ ce associated with any single future ph~.~n..~Pnon, viz., an increasing volatility.
In the face of economic risk, it is known for individuals and enl~ ises to
hedge against adverse outcomes by indirect means such as self~ ul~ce, and directly
by me~nc such as futures CollllacLs~fol~lval'd contracts and swaps. There are
disadvantages or limitations associated with such available economic risk management
m~och~nicmc. Particularly, they provide at best only indile~,L approaches to dealing with
the risk management needs. The available m~ch~ni.cm.c are relatively e~ ellsive and
provide limited phenomenon coverage, and Lllel.,f~le cannot meet the re(lui,e~llellL~ of
10 the party seel~ing to hedge against such wide-ranging future risk. The infrastructure
and pay-out costs associated with switching between, say, a commodities market and a
stock market are often prohibitive for entities small and large alike. As a consequence,
entities find themselves s~d-lled with obligations they have little control over and cannot
escape.
IllLe~ ional Application No. PCT/AU93/00250 also describes a number of
examples of prior art patents that deal with various forms of risk management.
The invention of Ill~lnaLional Application No. PCT/AU93/00250 can be
~ullll~ised as risk management contract formulation comprising the steps of order
pl~cçtnlont, pricing and ,~ rhi,~g. An ordering party inhi~t~c contract formulation by
~ul~llliL~ing an order that relates to a specified phenomPnon that has a range of possible
OUICollRS relative to a future date of ll~LuliLy. The ordering party specifies elem~nt~l
enthl.oTnPntc (pay-outs) due at lllaLuliLy relative to the phellolllellon's actual outcome,
and a maximum consideration to be paid to a c()ulllel~ally on l"~l~hil~g of a contract.
Independently, potential cuulllel~alLies have submitted registering data based on their
assessed probability of each possible outcome at maturity for the phen~ on in
question. From this coullt~l~Ly registering data, a data processing system then seeks
to price each CuullL~ Ly against the ordering party's specified entitl~m~nt Broadly
speaking, this involves multiplying each of the elem~nt~l ordering party enthl~Tn~nts

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3 -

with the collesl)ullding coun~ y probability and ~ ..i..g the results to derive
counter considerations. The counter considerations must fall below the ordering party's
maximum consideration for there to be the possibility of a match. Most usually amatch will be made between the ordering party and the cuull~l~)ally having the lowest
counter consideration. At all times during contract pricing and m~t~11ing the identity of
the cuullt._l~lies l.,.l-ains unknown to the ordering party, thus being in the nature of a
'blindfold' transaction.

Sl..~....~.y of th~ Inverltion
The present invention is directed to improvements in the formulation of risk
management contracts. In one broad form, the invention provides that the phenomenon
for an offered contract is specified such that the elemental entitl~m~t~ for the range of
outcomes are the same for each outcome. In m~th~m~ti~l terms this corresponds to a
shape in an x-y callesian coordhldte system where entitl~m~nt value (y) with respect to
the outcome values (x) is a flat line. Put another way, the entitl~-m~nt vs. outcome
(y,x) shape has zero gradient (~y/~x). This type of entitlement/outcome shape can be
thought of as a form of lending (if the entitl~m~nt is positive, or bol~owillg if the
entitlement is negative), in that the ordering party wishes to make the consideration
available for lending now, having the ~pe~ tion of receiving â known (non-
contingent) entitlement in the future. Contract pricing and m~tching with aco~ ~ly proceed as before.
The~role, the invention discloses a data processing system to enable the
form~ tion of multi-party risk management contracts, the system comprising:
input means by which an ordering party can input contract data representing an
offered contract for a pre~letermin~l phenomenon, the phenomenon having a futurerange of possible outcomes at a time of maturity, and said contract data specifying the
same entitlement for each said outcome due to the ordering party and a consideration

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due to a C~ullt, .l,ally, and at least one coul~ ,ally can input registering data for said
pre~ ...int~ ,heno,llcnd; and
data processing means for pricing and IIIAIe-h;l~g contracts from said contract
data and said regi~t._lhlg data, said pricing including c~lr- llAting a counter consideration
from each said registering data, and said mAtelling including cc,lll~lalillg said
consideration with each said counter consideration to match an offered contract with at
least one of said cc~ul.lc.~ ies.
Preferably, the entitlement is due at lllaluliLy.
The invention further discloses a method to enable the formulation of multi-
10 party risk management contracts, the method co~ isillg the steps of:
(a) hlpullillg to data proces~i~-g a~lJalalus, by input means, ordering party
contract data lc~reselltillg an offered contract for a predete. .~ d phenomenon, the
phe~mclloll having a range of possible oulCollRS at a time of lllaLuliLy, said contract
data s~ecirying the same entitlern~nt for each said outcome due to the ordering party
and a consideration due to a cuunl~lpâlly;
(b) hlpullillg to said data processing appa-alus, by input means,
coull~ al Ly registering data relating to the range of possible outcomes for said
predcl~llllined phen~ll.cnon; and
(c) pricing and matching the offered contract, by the data processing
20 appa-dlus~ collll~lisillg the steps of:
(i) cAlrnlAting a counter-consideration from each cuuntcll,~Ly registering
data;
(ii) conl?alillg said consideration with each said counter-con~sideration;
and
(iii) IllAlcl~iug the contract on the basis of the colll~alison.
Preferably, the consideration is paid to/from the ordering party on match of thecontract. FulLhcllllore, payment of the entitlenn~nt to/from the ordering party can occur
on maturity of the contract.

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In ano~ r broad form, the invention provides that an offered contract does not
specify any phf~l-.J.... ~.on, and thus there is no range of possible outcomes, rather an
ordering party specifies only a single (non-coll~ gt;lll) entitlement due at lllaluliLy. The
cc,ullt~ ,ally data thus is dh~-;lly the counter consideration. This form of the invention
iS in the nature of an exch~nge of consideration now for a known (non-coll~ gelll)
entitlement.
Thel~,role, the invention further discloses a data processillg system to enable
the formulation of multi-party risk management contracts, the system Colll~liSillg:
input means by which an ordering party can input contract data specifyillg an
o entitlement due to the ordering party and a consideration due to a cuull~ ally, both the
entitlement and the consideration being due on match of a contract, and at least one
cuullt~llJally can input counter considerations for the contract relevant to a range of
possible entitl~m~nt~; and
data proces~ing means for ~ chin~ a contract from said consideration and the
counter consideration for the specified entitlemPnt by colllpalillg said consideration with
each said counter consideration to match an offered contract with at least one of said
Coull~ hllies.
The invention further discloses a method to enable the formulation of multi-
party risk management contracts, the method colll~lisillg the steps of:
(a) hl~ullillg to data processing ~palalus, by input means, ordering party
contract data specifying an entitlement due to the ordering party and a consideration
due to a coulllel~ally, both the entitlement and the consideration due on match of a
contract;
(b) hl~ulling to said data processing ~palaLus, by input means,
COUll~ ally counter considerations for the contract relevant to a range of possible
entitlelllelll~; and
(c) m~tching the offered contract, by the data processing appalalus,
comprising the steps of:

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(i) colll~ari~g said cosideration with said counter cosideration for the
specified enthlPrnPnt; and
(ii) ".,.~rl~ the contract on the basis of the colllpalison.
The date of ll~ulily can be the momrnt the contract is m~trhPd.
In this and all of the prece~ling cases, the cosideration and the entitlement
need not be the same form (denomination) of 'money'.
The registering data preferably is the ~csessed probability of occurrence of
each possible ~ulcolne for the phen~nl"lon. The ~csçssed probabilities can sum to, or
be greater than one over the range of possible outcomes.
The CUU11Lt;1~a1lY registering data can include a discount rate specified by each
cùull~l~ally and applied to the respective c~lr~ ted consideration to give a net counter
cosideration. Further, a collllllission rate can be specified by each cuunlel~uly as a
part of the registering data.
In ~ ,f~ d embo~ .lc, the entitlrmrnt can be in the form of 'money'
15 payoffs (both positive and negative) at nlalulily of a m~t~hrd contract, or in the form of
goods, services, promises, credits or wall~ll~. The cosideration, whether ordering
party specified or coullt~l~ly c~lrl~l~ted, can again be in the nature of a plellliulll or
payments, or can relate to other 'non-money' forms of plopelLy or obligatios, typically
ll~relable when a contract is m~t~hed, although possibly deferrable until, and
20 potentially beyond, the time of lllalulily.
In the period b~lween the match of a contract and lll~lulily the various ordering
parties, c~unlel~allies and other contract stakeholders can review any contract to which
they are a party and seek to trade that contract to other parties by the pricing and
m~trhing procedure, or variatios on the pricing and m~t~hing procedure. They would
25 tend to do so if their view of the future outcome of the phenomenon, being the subject
of the contract, had changed markedly, or as a means to minimi~e expected losses if
some unforseen adverse trend in the present day outcome of the phen~,melloll hadoccurred. As well as trading exi~ting contracts, further contracts can be offered to 'lay

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off' or avert risk. Stakeholder parties can build up a portfolio of m~tchPd contracts and
offered contracts, which are contiml~lly traded to obtain the best possible position at
any time7 and that position can be continll~lly reviewed with time.
It is further contemplated that both m~tchPd and offered contracts be based on
the dirr~,ellce be~ phPn~mPn~, and so manage perceived risk as between the
phenomena. Elemental contract phenomena can Ll.~lerore be developed to meet the
most particular needs of ordering parties and c~u.-l,_~a.lies, thus creating great
flexibility.
In most il~L~lces the date of ll~lulily will be predel~ d by a 'product
10 sponsor' stakeholder. Even so, it is conceivable that the date of maturity can be tied to
a specified time from the instant a contract is m~tehPd This may be applop.iate where
the time of ma~ulily is in the near future, in which case offered contracts could
otherwise remain ~mm~trhPd following initial offer even up until the time of ...aluli~
Other stakeholders have executive roles in ~mini~tration, guaranteeing the
15 performance of ordering parties and cuu..Lel~allies, regulation, supervision and so on.
In this way the number and types of ordering parties and cuu..l~.~lies that can be
considered in pricing and ~ h;ng offered CO~ a~ can be controlled.
For all of the above-described cases, and for the case of contract formulation
described in Illle-.-a~ional Application No. PCT/AU93/00250, ordering parties must
form some view about the entitlP~nPnt required (whether co.-Li-~el.l or non-cc~linge~ll
upon an oulco...e of a phenomenon) and the consideration to offer for a particular
entitlem~nt(s). In a similar way, countell,~lies (commonly referred to as participating
parties) must form a view of the relative likelihood of oc~;u~.ellce of the outcome(s) in
order to allow a counter consideration to be derived in the pricing procedure. It would
be beneficial for ordering parties and cou.-l~l~a,lies alike to be able to call upon a
decision support facility that can assist in the formulation of ordering party submission
data and counter party registering data, based more generally on perceived ~ttitl-~es and
objectives.

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Th~lerole, the invention discloses a data processing system to enable the
management of risk by the form~ tion of risk management contracts, the system
CO~ L1~:
data input means by which p~licipa~ g parties can input data collcelnillg at
least one pred~L~ ed phenomenon, each phenomenon having a range of possible
outcomes and a future time of maturity, and
data processing means, coupled to each input means, for pricing and ~ çhing
contracts b~Lween participating parties, and wll~,lein each contract is priced and
m~t~h~d on the basis of offering data specifying entitl~m~nt~ due at lllaluli~y for the
10 range of possible outcomes for one or more of said phenomena, and registering data of
the likelihood of each outcome in said predetellllilled range of outcomes at lllalulily for
one or more of said ph~lloll~na, said Orr. liulg data and said pricing data being derived
from said participalillg party data.
The palli~ JaLillg party data can further include offering data and/or pricing
data.
Preferably, said pricing includes calc~ ting a counter consideration derived
from said likelihoods, and said m~tching including colll~alillg said consideration and
said counter-consideration to match said offering data with one or more of said
registering data.
The invention also discloses a method for enabling the management of risk by
the formulation of risk management collllacls, the method comprising the steps of:
particiya~hlg parties in~ul~illg, by at least one data input means, data
col~celni~g at least one predete. .~ d phenomenon, each said phenomenon having arange of future outcomes and a future time of maturity; and
pricing and m~t~hing contracts between participating parties, by data
processing means, whcl~,~ each contract is priced and m~tch~d on the basis of offering
data specifying entitl~ t~ due at lllalulily for the range of possible outcomes for one
or more of said phenomena, and registering data of the likelihood of each outcome in

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said predt;~lll~ed range of uulco~ s at ll~lulily for one or more of said phellulllella,
said Orr~l~ data and said pricing data being derived from said participdlillg party data.
Preferably, said pricing inrl~l(ling the step of c~ ting a cuulll~r-
consideration derived from said likelihoods, and said ...~tc~ing including the step of
5 colll~ g said consideration and said counter consideration to match said offering data
with one or more of said ~gi~lillg data.
Preferably, for both the system and method, the participating party attitude canbe derived as only registering data, or as both registering data and offering data.
Advantageously, the derivation from participating party attitude to registering
o data and/or offering data is algorithmic, based on one or more of forecasts, objectives,
pelceived phenomena exposure and contract status h~lllldtion.
The Attinldes can include participating party forecasts, in one embodiment
being probabilities of oc~;u~ ce of the future phenomena. The attit~ldes can further
include participating party obje~;lives conce,l,ing particular desired contracts, products
and consideration payment ."i.,i"".." and mAximllm values. The Atti~l~ies further can
include perceived phellullRnon exposures.
Partici~alh~ parties also can be provided with illrollllation concerning
submitted, priced or m~t~ Ptl contracts by the data processing means.
The invention retains the notion of stakeholders as ordering parties and order
cuu~ pallies, although because individual participaLillg parties can fulfil the roles of
an ordering party, a c~ lly or both an ordering party and a cuunl~l~alLy, as least
some of the partici~Lh~ parties must be acknowledged as a registered product
counterparty.
The invention thus can accommodate multiple participating parties and other
ill~le~l~d/registered stakeholders, these being application promoters, product sponsors,
guarantors, asset l~rel entities, regulators and other miscellaneous entities of various
types.

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What dirrc~cllliates ordering parties from cou~ lyallies is the notion of
contract order inhiAtion. Or~rillg parties initiate new contract orders, and counter-
parties are the potential ~ ~ki-~g '~acceylol~ of the contract orders. They fulfil this
role by co..l;....Ally sublllillhlg order pricing and limit conditions to the system.
Generally, all coulll~.yallies can be ordering parties but not all ordering parties
can be coulll~ allies. This is because cuu~ lyâllies need to be recognised by ordering
parties as having the capacity to always make good on their future contract liabilities.
In addition to initiAtin~ new contract orders (in the case of ordering parties)
and continl-Ally ~ublllillillg contract order pricing and limit conditions to the system (in
10 the case of counter-parties) all participalillg parties can also:
(a) sell to any other participa~illg party the (positive or zero payoff
portion) of a confir~n~d contract it is a party to,
(b) pulchase from any other participating party the (positive or zero
payoff portion) of a co.. r.. ~d contract offered for sale by some other participating
party,
(c) purchase or write an option to be a party to a new contract,
(d) exercise a purchased option to be a party to a new contract,
(e) purchase or write an option to buy/sell (the positive or zero payoff
portion ofl and exi~ting contract,
(fl exercise a purchased option to buy/sell (the positive or zero payoff
portion ofl an existing contract,
(g) withdMw submitted but as yet nnP~cllted transactions of all the
above-mentioned types, and
(h) submit pricing-enquiry orders with respect to all of the above-
mentioned transaction types.
Embod;l-.r..l~ of the invention signifirAntly advance the state-of-the-art of
forn lllAting and trading risk management contracts. F~sentiAlly, this is achieved by a
colllyulillgltelec~ tions infrastructure that is capable of being accessed

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worldwide by any e~ ise/individual having access to a col"~u~er and telephone
wolh. Furthermore, a virtually infinite llUlll'tiel and range of risk typescan be
accommodated. One embodiment ~lesell~ itself in a form that assists users in making
consideration-entitlPmPnt (h~uldllce-type) trade-off decisions and provides a blind yet
llanspd~ price-discovery and trading process. Through its capability to create special
case 1entling/bo~ willg and exchange products, end users are also provided with a low-
cost mPch~ni~m for pricing and acquiring these products without the involvement of
traditional intermPdi~ries.

~o Rrief nescr~tion of the DldWi-~,gS
Fig. l is a schPm~tir block diagram of a generic system embodying the
invention;
Fig. 2a is a schP-m~ti~ block diagram of an indicative haldwdle platform
supporting the system of Fig. l;
Fig. 2b is a schP-m~tir block diagram of an ~ltçrn~tP haldWdl'e platform
supporting the system of Fig. l;
Fig. 3 shows a timeline applicable to Example I;
Fig. 4 shows a timeline applicable to Example II;
Fig. 5 shows a timeline applicable to Example III;
Fig. 6 shows a modified forrn of the srh~ block diagram of Fig. l;
Fig. 7 shows a block diagram of the flow of i,~l",ation in one embo-limPnt;
Fig. 8 shows a block diagram of the flow of h~Ço"~alion in another
embodiment; and
Fig. 9 shows a processing cycle of an embodiment.

nescri,ption of Preferred Fmbo~ n-l Rest Mode of Pelro,... ll-~P
Fig. l shows a block diagram of the generic system l0 embodying the
invention. The various stakeholders or parties to the system 10 each have access to a

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centralised processin~ unit 20. The procec~ing units 20 can be co~ ed by one or
more data processing aLpalalus, with each one thereof providing access for any one or
more of the various stakeholders to applications software supported by the system 10,
as all the proces~in~ units are interconn~ctçd. Access to the one or more data
proces~ing appaldlus is controlled by a generic form of co~ ;r~tionS co-ordindlion
and security processil-g unit 25.
Fig. 1 also in-lic~t~s that there are a number of types of stakeholder, and a
llulllber of individual stakeholders within each stakeholder type. The basic types of
stakeholder are described as: applications promoters 11, product sponsors 12, product
o ordering parties 13, potential product cuul,l~ ,lies 14, counter-party guarantors 15,
regulators 16, consideration/entitl~ment I~ Çel ('accounting') entities 17, and
miscellaneous parties 18. The number of types of stakeholder represented in Fig. 1 is
typically the largest that will be ~u~ol~d by the system 10.
An embodiment of a co""-ul~, system for the system 10 is shown in Fig. 2a.
The core of the system hardwa~e is a collection of data processing units. In theembodiment described, the processing unit 20 comprises three inter-linked data
processors 93,97,104, such as the Sun 670 MP m~mlf~rtnred by Sun Microsystems,
Inc. of the USA. Each processing unit 93,97,104 runs operational system software,
such as Sun Microsy~l.,ms OS 4.1.2, as well as applications software. The processor
configuration shown in Fig. 1 l~lesel,l~ a large system designed to handle the
transactions of thousands of stakeholders, the input and output data genel~led by those
stakeholders, and risk management contract pricing, m~t~hing and subsequent
processing functions.
Each processing unit 93,97,104 is operably conn~ct~d with it one or more
mass data storage units 95,100,110 to store all data received from stakeholders, and
other data relating to all other software operations gel1~ldlillg or retrieving stored
h~"~lion. Suitable mass storage units are, for example, such as those commercially
available from Sun Micro~y~L~llls.

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A nllmber of co~ ir~tic)ns controllers 80,84,87, forming the
co.... ;r~ti~ns co-ordi,lalion and security processin~ unit 25, are coupled with the
processi~-~ unit 20. These controllers effect c~ r~tions between the processing
units 93,97,104 and the various external haldw~e devices used by the stakeholders to
co------~.-;c~e data or instructions to or from the processing units. The co~ nir~tions
controllers are such as the Encore ANNEX II, the IBM AS/400 server or the CISCO
Systems AGS +.
A large range of co-~...--,-ir~tions haldwale products are supported, and
collectively are referred to as the stakeholder input/output devices 70. One amongst
10 many of the co------~ ic~tion devices 70 are personal colll~u~cl~Sl and associated
in~ 52, which have co.~l-.. ir~tions connection with the co~",.~l-ic~tions controller
80 by means of a modem 50. There can also be an external host device 53, such as a
mini or mai, rl~llc colll~ulcl, again linked with the co"""...~ir~tions controller 80 by
means of a modem 54. In other forms, col..,....i-ic~tions can be established simply by
means of a tone ~ lling telephone 56, which provides for the input of instructions or
data by use of the tone dialling facility itself. In the all~ ative, a voice connection via
an operator 75 can be effected by a conventional telephone 58. Both these external
devices are shown cc,l-l~f~-lrcl with the co.. ~ir~tions controller 84. A further
possibility is to have data L,~L~rcl by means of a facsimile m~rhinP 65, in this case
20 shown linked to the co----~ ir~tions controller 87.
In all cases, users of the input devices are likely to be required to make use of
system access password gc~ ion and encly~lion devices such as the Racal RG 500
Watchword Gencldtor 66,67,68,69, (for personal use) and the Racal RG 1000, which is
incorporated in a mainframe colllyulel 53. The coll~,sponding decoding units for these
devices are incorporated in the co,-----~ ir~tions controllers 80,84,87.
The generic processing unit 20 also includes a large number of 'portable'
hlrollllation lccoldal devices, such as plillLers, disc drives, and the like, which allow
various forms of h~lll~lion to be printed or otherwise written to storage media to be

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ll~fel~ble. This is particularly a~lol~liale where c-~,.r" ".~tory docllmPnt~tion of
...alchPd risk collll~c~ is required to be produced, either for sal:_Leel)ing as a hard copy
record, else to be fol w~ded to any one or more of the stakeholders that are a party to
each individual ,ll~lrhpd contract.
The generic system 10 shown in Fig. 1 ellco.. l ~ses many varied
configurations, relating not only to the number and types of stakeholders, but also the
'architPc~llres' realisable by the system h~.lw~re and software in colll~ ion. In that
sense the a~ elll~lll shown in Fig. 2a is to be considered only as broadly in~ic~tive
of one type of h~.lwale configuration that may be required to put the system into
o effect.
For example, Fig. 2b shows an ~ltern~te configuration that does not rely upon
a centralised (hub) data processing unit, rather the nPcess~ry processing is pe.rolllled
locally at each stakeholder site 200n by means of distributed software.
The formulation, pricing, match and subseqmPnt m~n~gçmPnt of risk
management contracts will now be described with rer~ ce to three examples.

T ife Cycle of Ri~k M~n~emP-nt Cor~tract: FY~m~71e I
This example is taken from Inl~ ional Application No. PCT/AU93/00250,
and describes forn~ tion of a contract to manage risk associated with potential future
movements in the value of a specified index of share prices (termed the PTSE 75
index). In ~ , the example shows how one party (such as an in~titl1tional fund
manager) can seek to avoid the adverse consequences of a signifir~nt decline in the
future value of the PTSE 75 index (specifically a decline by June 1996), relative to the
~sllmP~l current (June 1991) value of the index to make a contract with another
unknown party, such as another fund manager seeking to avoid the adverse
con~equPnres of a si~..;r.r~..l corresponding increase in PTSE 75 index value.
The specific contract orÇ~ g is one which provides an ordering party with a
specified col~ lge.ll entitlement to a colllpel1sdtoly Australian dollar future payout upon

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payment of an up-front consideration money amount by the ordering party to the as-yet-
unknown c-)u,~ ,~ Ly . The future money entitlemPnt is contingent on the value, at
contract lllalulily date, of the independently-delé~ ed value of the PTSE 75 index.
In this example, the relevant key stakeholders are: an application plOlllOlel
(BLC Inc), various product sponsors (the relevant one for the example being BLC Inc
itself), various product ordering parties (the relevant ones for the example being
Abbotts & Taylor and Shearer & Associates), various potential counterparties (the
relevant ones for the example being Abrahalllsons and Cal~elllels Inc), a c~unlell,alLy
guarantor (CNZ Ran~ing Col~ol~tion) and an application regulator (the Pacific Central
Bank).
A tim~lin~ depicting the steps in the contract from the first step (Application
Specification) to the final step (Contract Settl~m~nt) is shown in Fig. 3. The following
charts G2-G6 ~u~poll Fig. 3, and should be read together with the following
description.
Looking at the first step in the timeline (Application Specification) in
conjunction with chart G2, it can be seen that BLC Inc established a Contract APP
(Application ID 001) on 91.06.03.17.00.00 (that is, 5pm on June 3, 1991) to deal with
economic risk management. Application ID 001 su~olls a range of products, relating
to dirrelelll phenomena.
Looking at the second step in the timeline (Product Specification) in
collj~ ;lion with chart G3, it can be seen that BLC Inc is also product sponsor of
Product 10061, within APP ID 001, specified at the same time (91.06.03.17.00.00).
This product relates to the market termed Stock Indices and to the sub-market termed
PTSE 75. The maturity date for Product 10061 is 96.06.03.17.00.00.00. The
consideration for a specific contract involving Product 10061 is in the form of money
(commercial bank deposits denomin~t~d in Australian dollars). The entitlement is also
in the form of commercial bank deposits deno,-,i"~t~d in Australian dollars, payable (if
n~ceSs~ry) imm~ tely after the product's specified lllaLulily date/time.

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Looking at the third step in the timPlin~ (Potential Counlcl~,ally Product
Pricing Specirlca~ions), two entities, Abrahamsons and C~1JG11lG1~ Inc, are acting as
~olelllial cuulll~ ,allies for Çullllcûllling plhllal~ product orders dealing with Product
10061. At this point in the timeline (95.01.01.17.00.00.00), 43 months after thespecification of Product 10061, both Abrahamsons and Carpenters Inc have ~;ull~,ntly-
specified p~llel~,ls for pricing potentially forthcoming orders for the product.Looking at the fourth step in the timeline (P~ al~ Order Specification), in
conjull~;lion with chart G4, it can be seen that an ordering party, Abbotts & Taylor, is
see~ing a contract, from an Orr~ g party, in Product 10061 at that time
(95.01.01.17.37.06.00). Chart G4 shows the specific parameters (entitlem~nt) that
Abbotts & Taylor has defined for the contract it is seeking at this time, including a
m~ximllm acceptable contract consideration amount of 54,000 (denol"il-~t~cl in
collllll~,..;ial bank, Australian dollars) and elem~nt~l entitl~-m~nt.c for each of the range
of PTSE 75 outcomes at maturity. The entitl~m~nt.~ as a function of outcome are
conveniently represented graphically.
Looking at the fifth step in the timeline, Order Specification Pricing, in
colljunclion with chart GS, it can be seen that Abrahamsons' specified pricing
pal~llcl~ , are used to price the Abbotts & Taylor order at 95.01.01.17.38.02.00.
Abrahamsons' pricing parameters in~ te that their a~lopliate defined cil~ res
ID iS 26, which implies a commission rate of 1.25% and a discount rate of 10.00% per
annum. The registering data also includes a particular set of component product prices
and a particular set of ~ses~e~ probabilities of occurrence. The pricing achieved by the
22200
following formula ~ (entitl~m~nt amount x component product price) = 59,580,
<1600
applying the discount rate (10%) to give a present day value of 51,280, plus thecommission (1.25%) to give the counter consideration of 51,920 (del~o",i~ e~ in
cullllllelcial bank, Australian dollars). Abrahamsons' ~aldlll~ c~lc.-l~t~ that this will
yield them a base margin on the contract of 4,580 (again deno"~ tP~ in collllllelcial
bank, Australian dollars).

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Still looking at the fifth step in the timeline, in conjullclion with chart G6, it
can be seen that Ca1~C11I~1S Inc's specified pricing pala lleLels, are also used to price
the Abbotts & Taylor order at 95.01.01.17.38.02.00. Cal~clll~,~s Inc's pricing
p~lletel~ in~ e that their a~plopliate defined ch~ es ID is 17 implying a
commission rate of 1.30% and a discount rate of 9.80% per annum. They too have
submitted a particular set of component product prices and a particular set of ~sessed
probabilities of oc~;ulrence for all possible outcomes of the PTSE 75 within the range
1600 - 2200. This results in a contract bid price of 53,050 (deno..~ le(l in colllnl~lcial
bank, Australian dollars), which Call,clllels Inc's palallltLels calculate will yield them a
o base margin on the contract of 5,610 (again deno~ t~d in collllllclcial bank,
Australian dollars).
The subsequent step of m~tching involves, plill~ ally, d~ -g which
cuun~ ~ly counter considerations fall below Abbotts & Taylor's maximum specifiedconsideration and of those, which is the lowest. There can be further considerations
such as cuulllelllally absolute loss, expected loss, expected value and m~ximllmcontract portfolio composition attributes that must be satisfied before a match is finally
~o--~--.-----;~l~d .
The balance of the steps shown in the timeline of Fig. 3 up to settlement are
not described here, although they are to be found in IllL~lllalional Application No.
PCT/AU93/00250.
At all in~t~nres up to and including contract m~t~hing, the identity of the
c~ulll~l~allies is unknown to Abbotts & Taylor. The coullL._.~allies similarly are not
active in the contract ..~e!.i.~g, and only become aware of their part in a contract after
".~tchi~.g, but even then may not know the identity of the ordering party.

T ife Cycle of Fron~mic M~n~em~nt Contract: Fx~mE7le IT
This further example of a risk management contract is an extension of Example
I. More particularly, however, it is a special case of the general case of Example I, in

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that for a particular phPI~n~ n~n the same entitlP-mPnt is specified by the ordering party
for each of t_e possible OulCOnRS. In t_e terminology of Il~ llalional Application No.
PCT/AU93/00250, t_is is a case where X = 1, a(X) is not applicable, ~(X) = the
specified non-colllinge-ll entitlPtnPnt (CU1~ l), and ~(X) = 11, where " 11 " denotes a
".~ lir~l s_ape that is a straightlinP with respect to the 'uulcollle' axis, drawn from
a menu of such shapes. Put another way, the gradient of the graph of e~titlPmPnt(y - axis) against outcome (x - axis) is zero.
The COUlltclyally legisl~,rillg data remains the same. It can be thought of as the
scenario where the outcome is not of concern to the ordering party. When its future
enthlçmPnt is positive, the contract, from the ordering party's view, is in the nature of
a loan, in that the consideration is made available now for a future known entitlemPnt.
It is of course possible for t_e consideration and entitlPnnPnt to be negative so that the
nature of the contract from the ordering party's Vi~wyOilll is bollvwing.
The example shows just this situation, in that one party (such as an hlslilulional
fund manager) seeks to avoid the adverse consequences of not having immPfli~tp
possession of a defined resource (say, Australian dollars) by becoming a party to a
contract with another, as-yet-unknown, party (such as another fund manager seeking to
avoid the adverse con~eq~nPnres of being unable to adequately utilise the defined
resource).
The specific contract offering is one which provides an ordering party with a
specified non-contingent obligation (that is, a negative future entitlement) to make an
Australian dollar future payout to the contract's coulll~lyalLy upon that cùunlelyally's
payment of a c~lc~ tP~ up-front consideration money amount to the ordering party.
Thus, for a given guaranteed entitlPmPnt payout amount by the ordering party
to its c~JulllelyalLy on a contract's maturity date, the up-front consideration payment is
es~enti~lly a function of two matters implicitly delellllil~ed between the ordering party
and the coullLely~Ly registering data:

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19

1. The discount (interest) rate applicable to the contract (this will itself
be credit risk-free Australian dollar h~ lents with the same
alulily date, plus a margin reflecting the coull~ ally's ~Cses.cm~ont
of the likelihood of default by the ordering party in making their
required future entitl~-m~-nt payment in Australian dollars);
2. The cuulll~l~ally's sought-after commission on the transaction.
Note that if, say, the contract entitl~mlont is based in US dollars, the matter of
the cuu~ ~ly's defined fc,l w~rd Australian dollar/U.S. dollar exchange rate would
also be relevant.
As noted, the relevant key stakeholders are the same as in Example I: an
application promoter (BLC Inc); various product sponsors (the relevant one for the
example being BLC Inc itself); various product oldeling parties (the relevant ones for
the example being Abbotts & Taylor and Shearer & Associates); various potential
cuulll~ llies (the relevant ones for the example being Abrahamsons and Cal~llle
Inc); a coulll~l~ally guarantor (CNZ Rankin~ Corporation); and an application
regulator (the Pacific Central Bank).
A timeline dc:~iclillg the steps in the contract from the first step, Application
Specification, to the final step, Contract Settlement, is shown in Fig. 4 and further
supported by charts H2 - H6.
Looking at the first step in the tim~lin~, Application Specification, in
colljul~lion with chart H2, we see that BLC Inc established a Contract APP
(Application ID 001) on 91.06.03.17.00.00 (that is, 5 pm on June 3, 1991) to deal with
economic risk management. The application involves a pricing and m~tching objective
functiûn of: "minimi.ce pre-tax consideration p~yll~llL under an expected value
(EV)/certainty equivalent (CE) value". Note that a negative consideration payment is
allowed.
Looking at the second step in the timPlin~, Product Specification, in
cûlljul~ ion with chart H3, we see that BLC Inc was also product sponsor of Product

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10061 at the same time (91.06.03.17.00.00). This product relates again to the market
of stock indices. The lllaLulily date for Product 10061 is 96.06.03.17.00.00.00. The
sub-market is the PTSE 75 stock index. The consideration for a specific contractinvolving Product 10061 is in the form of money (commPrcial bank deposits
de~o,.,i~-~te~ in Australian dollars). The entitlement is also in the form of collll~ cial
bank deposits ~ e~ in Australian dollars, payable immP~i~tely after the
product's specified Illalulily date/time.
Looking at the third step in the timeline, Potential CuullLell~ally Product
Pricing Specifications, one can find two entities, Abrahamsons and Cal~t~ Inc,
10 acting as potential cu~ lpallies for forthcoming plilllaly product orders dealing with
Product 10061. At this point in the timeline (95.01.01.17.00.00.00), 43 months after
the specification of Product 10061, both Abrah~llsons and C~elltel~ Inc have
~;Ull~ nlly-specified parameters for pricing potentially forthcollling orders for the
product.
Looking at the fourth step in the timeline, P~ dl~ Order Specification, in
conjullclion with chart H4, it can be seen that Abbotts & Taylor is seeking a contract in
Product 10061 at that time (95.01.01.17.37.06.00). Chart H4 shows the specific
p~ lelels that Abbotts & Taylor has defined for the contract it is seeking at this time,
namely $A 83,830 for any feasible product value including a .,.i~-i.. ,.. acceptable
20 contract consideration amount of ($A 55,000). The parenthPsPs inllir~tP that the
consideration is negative. The c~ tP~ counter consideration (2 $A 55,000 ) will be
paid by the cc unlel~ Ly to Abbotts & Taylor imm~ tely after contract m~tching .Looking at the fifth step in the timeline, Order Specification Pricing, in
colljullction with chart H5, it can be seen that Abrahamsons (using the specified pricing
25 pal~ulltl~ set at 95.01.01.17.37.06.00) prices the Abbotts & Taylor order at
95.01.01.17.38.02.00. Abrah~llsolls' pricing parameters, intlic~tPd by their defined
ch~;ullls~ces ID of 31, require a commission rate of 1.25 % and a discount rate of
10.00% pa. A particular set of component product prices together with a particular set

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of ~csesse~ probabilities of oc-;ulle-lce are specified. This results in a counter
consideration of ($A 58,710), which Abrahamsons' pal~lRlcl~ calculate will yield them
a base margin on the contract of $A 1,980.
Still looking at the fifth step in the tim~lin~ in conjul~ ion with chart H6, itcan be seen that Cal~cl,L~l~ Inc (again using the specified pricing phl~lllRtel~i set at
95.01.01.17.37.06.00) also prices the Abbotts & Taylor order at
95.01.01.17.38.02.00. C~cnlcls Inc's pricing parameters, inflir~qted by their defined
cilc.~ res ID of 19, require a c~llullission rate of 1.30% and a discount rate of
9.8% pa. A particular set of co,ll~)ollcnl product prices and a particular set of assessed
10 probabilities of oc~;ulrellce are specified. This results in a contract bid price of
($A 58,640), which Carpenters Inc's parameters c~lc~ te will yield them a base margin
on the contract of $1,990.
Looking at the sixth step in the timeline, Primary Order Matching, it can be
found that Abrah~llsolls' price bid of ($A 58,710) is above Carpenters Inc's bid of
15 ($A 58,640) and above Abbotts & Taylor's specified .. ;~ .. consideration price of
($A 55,000). This leads to a formal m~t~hing of Abbotts & Taylor's order by
Abrahamsons at 95.01.01.17.38.07.00. Before the ...~ hi.~g formally occurs, a check
is made that absolute loss, expected loss, expected value and portfolio attribute limits
are not violated.
The seventh step in the tim~lin~ Contact Maturity, refers to the actual
detellllillalion of the product value at time of ma~uliLy, 96.06.03.17.00.00.00.The eighth step in the timeline involves the formal p~ylllent of $A 83,830 by
Abbotts & Taylor to Abrah&lllsons.
The example just described can also be thought of as a case where the market
iS irrelevant, and therefore there is no l.~ ., or maximum product definition value
nor product step value. This equates to there being no future outcome, rather simply a
known specified entitlement that is not dependent upon the outcome of any particular
phenomenon. The mathematical representation of curves or lines no longer is relevant.

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The cuullle~ y counter consideration thus becomes a function only of the discount
rate, co.. ;~sion and (if applicable) entitlement eYI~h~nge rate.

T if e Cycle of Fr.on~ M~n~pem~nt Contract: Fx~m~E le m
This embodiment relates to an economic management contract (based on a
variation of Example II) and describes the formulation of an immP~ te ex~h~n~e
contract involving an enthl~ nt of a defined $US amount in return for a to-be-
dele.lllined consideration df no~ t~d in coll~le~ial bank Australian dollars.
This example is a special case of the general case of Example II in that it is
independent of the outcome of any particular phenomenon. It has only a single
outcome for which a single entitlem~nt is specified by the ordering party.
Unlike Example II, however, this case also involves a unique notion of a
contract maturity date/time. This is the notion of "as soon as possible after the
date/time the transaction is ori~in~ted by the ordering party", implying an imm~ te
exchange. That is, the date of lllalulily is now.
In this example, the offering is one which provides a contract ordering party
with a specified non-colllil~gcnt entitlement to receive its desired $US wll~ y amount
($US 70,000) as soon as possible after the ordering party specifies it is prepdred to
imm~ tely pay not more than $A 102,900 (as a consideration) in exch~nge for this US
~u~ lC~.
In this example, the relevant key stakeholders are: an application plolllolel
(BLC Inc); various product sponsors (the relevant one for the example being BLC Inc
itself), various product ordering parties (the relevant ones for the example being
Abbotts & Taylor), various potential coulll~lyal~ies (the relevant ones for the example
being Abrahamsons and Cal~ntel~ Inc), a co~lllell.ally guarantor (CNZ R~nking
Corporation) and an application regulator (the Pacific Central Bank).

. --
, CA 02203279 l997-04-2lPCT/AU 9 5 1 0 ~
~E~ En l~t~UG1936


The timeline depicting the steps in the contract from the first step, Application
Specification, to the final step, Contract Settlement, is shown in ~ig. 5, and are
supported by charts J2 - J6.
Looking at the first step in the timeline, Application Specification, in
conjunction with chart J2, we see that BLC Inc established a contract APP (Application
ID 201) on 91.06.03.17.00.00 (that is, Spm on June 3, 1991) to deal with economic
risk management. The application involves a pricing and matching objective function
of: "maximise pre-tax consideration/entitlement exchange rate". Application ID 201
supports a range of products.
10. Looking at the second step in the timeline, Product Specification, in
conjunction with chart J3, we see that BLC Inc was also product sponsor of Product
11099 at the same time (91.06.03.17.00.00). This product relates to the market of
immediate exchange. The maturity date for Product 11099 is "as soon as possible after
transaction initiation". The consideration for a specific contract involving Product
llO99is commercial bank deposits denomin~ted in Australian dollars. The entitlement
is in the form of commercial bank deposits denominated in US dollars, payable
immediately after the product's specified maturity date/time (that is, as soon as possible
after transaction initiation).
Looking at the third step in the timeline, Potential Counterparty Product
Pricing Specifications, two entities, Abrahamsons and Carpenters Inc, are potential
counterparties for forthcoming primary product orders dealing with Product 11099. At
this point in the timeline (92.06.03.15.00.00.00), 12 months after the specification of
Product 11099, both Abrahamsons and Carpenters Inc have currently-specified
parameters for pricing potentially forthcoming orders for the product.
Looking at the fourth step in the timeline, Primary Order Specification, in
conjunction with chart J4, it can be seen that an ordering party, Abbotts & Taylor, is
seeking a contract from an offering party in Product 11099 at that time
(92.06.03.17.00.00.00). Chart J4 shows the specific parameters that Abbotts & Taylor

4!\k~ir~ S~E~
~AIA~,I IN:\libklO0460:6FD

CA 02203279 l997-04-2l
PCI/AU ~ 5 / O ~ ~3 2,
REC~ O t 6 ~G 19g6

- 24 -

has defined for the contract it is seeking at this time, including a maximum exchange
(consideration) amount of ($A 102,900) and a defined $US 70,000 entitlement.
Looking at the fiflh step in the timeline, Order Specification Pricing, in
conjunction with chart JS, it can be seen that the system determines that the counter
consideration amount Abrahamsons judge to be ideal given their specified parameters is
$A 94,500. This occurs at 92.06.03.17.38.02.00. Abrahamsons' pricing parameters
specify an exchange rate of 0.75, a comrnission rate of 1.25 % and a single assessed
probability of occurrence of one (1) (discount rate and component product prices being
irrelevant in this example). The counter consideration of $A 94,500 is lower than
Abbotts & Taylor's specified maximum consideration amount of $A 102,900.
Still looking at the fifth step in the timeline, in conjunction with chart J6, the
system determines that the counter consideration amount Carpenters Inc judge to be
ideal given their specified parameters is $A 101,300. Carpenters Inc's pricing
parameters imply an exchange rate of 0.70, a commission rate of 1.30% and a single
assessed probability of occurrence of one (1) (discount rate and component product
prices again being irrelevant).
Looking at the sixth step in the timeline, Order Matching, it can be found that
the system assesses Abrahamsons' to be superior to that of Carpenter Inc and below
Abbotts & Taylor's maximum consideration. This leads to a formal matching of
Abbotts & Taylor's order by Abrahamsons' at 92.06.03.17.38.12.00. Matching
coincides in time with maturity, and very shortly thereafter there is the transfer of
$A 94,500 from Abbotts & Taylor to Abrahamsons and a corresponding transfer of
$US 70,000 from Abrahamsons to Abbotts & Taylor. This then represents finalisation
of the transaction, including all the transfers involved at the date/time of maturity of
other contract types.
A further embodiment, relevant to each of the embodiments of Examples I to
III above, involves the order pricing procedure as before, followed by a step ofobligating the ordering party with the would-be matched counterparty for a period of


c~uti:~ S~i,EET
~ÇE~ J IN \Iibk,0046o BFD

CA 02203279 l997-04-2l
wo 96/18160 ~crtAl~9sloo827
- 25 -

time before the match is formally rnade. As before, the consideration can be payable
imme~ tely upon match or deferred for a time (even up until ~ uliLy), and the date of
lllaLuliLy can be at a future time from m~trhin~ (or even imm~ tely upon match). The
period of obligation can be specified by the promoter stakeholder, and thus be known to
the ordering party and the registering cuullL~l~Lies. The period of obligation thus
enables parties to contract to future contingent contracts (in the case of Examples I and
II) or future exchange (in the case of Example m).

l)ecicion Support
o The system block diagram shown in Fig. 6 differs from that shown in Fig. 1 in
that product ordering parties 13 and potential product coullLel~alLies 14 are collectively
known as palLi~;ipaLing parties 19. As ~liccllsse~ previously, the one entity can act as an
ordering party, as a cuullL~l~alLy or as both an ordering party and cuunLel~alLy. For
the purpose of the imm~Ai~tely following fliccllcsion, it is ~csllm~d that all participating
parties 19 can act both as an ordering party and a coullttl~ally.
Fig. 7 shows a flow of h~llllaLion or a single ordering party/cuullLel~Ly 19.
That entity 19 receives h~lll~Lion co~ e. ..i..g settled (matured) contracts andh~llllation collc~ g the trading ellvh~,lllllellL. Both these types of hlfc,llllation are
provided by the core system facilities 20.
The "contracts" referred to are meant in the same sense as for previously noted
International Application No. PCT/AU93/00250 and as rliccllcse(l above. The contract
pricing and ",~l'hi"g m~tho~Qlogy underpins all of the hlfullllation flow and decision
making. The subject matter to be described relates to providing participating parties
with a decision support facility to assist in order formulation, contract trading and the
like, based more generally on perceived ~tthll~1.os and objectives.
While order p~ nt and ,-~ hi~g occur within the core system 20 in the
same lll~ller as previously described, and hence ordering data and registering data are
input to allow pricing and m~t~hing, the particip~.Lillg parties optionally can specify only

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WO 96/18160 PCT/AU9S/00827


broader inputs, that are tr~n~l~t~ into the ~-~cess~.y specific detail to be submitted to
the core system by the decision support facility resident in the individual user facilities
70.
A participating party 19 supplies contract-based inputs via the filter 30 to itsprocessin~ facility 70, as well as forecast data, objectives and perceived phenomena
'exposure' data. In the absence of any contract-based inputs from the participating
party 19, the processing facility 70 processes the higher level il~llllalion represented
by the forecast, objectives and p~lceivcd phenomena 'exposure' to derive transaction
instructions that are forwarded via the telecol.~ ir-~ti-)ns gateway 25 to the core
10 system processing 20. The user processing facility 70 also receives infollllation from
the core system facility 20 concerning the co.-f.. ~lion of transactions, contract status
changes and contract revaluations. Thus the participating party can be 'plolll~)ted' as to
~ropliatc courses of action based upon that party's 'attitude' to risk as defined by the
contract inputs, folecas~, objective and perceived exposure. In this way, the
participating party 19 is able to manage its risk exposure at a higher level than on a per-
contract basis.
The diagram of Fig. 8 is similar to that of Fig. 7, except that the user
processing facility 70 makes no decisions on a per-contract basis, rather supplies
h~llllation to the core system facility 20 based only on individual pal~icipatillg party's
forecasts, objectives and perceived phenomena 'exposure'. The per-contract leveltransaction h~ntlling is h~n-1lPd by the core system 20.
The particular system configuration is not hll~ulLalll for the purposes of the
following example, rather the description deals with the flow only of information, and
in this regard the types of h~llllaLion shown in Figs. 7 and 8 are referred to.
In a basic form, the Forecasts are constructed on the basis of the probabilitiesof oc.;ullence of the predclcllllined phel~ll,cl,a. In more sophisti~ated versions, the
forecasting further can be based on one or more of the following assessmell~:
(a) correlations bclween ~c~essed probabilities of occullcllce,

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Wo 96/18160 pcrlAussloo827


(b) contract re-sale and offer values prior to individual contract llla~ulily,(c) contract payout discount rate dele. ",i,~"l,
(d) ~;Ul~ ;y and money-type assist future exch~nge rates for contract
portfolio valuation, and
(e) objectives and strategies of other participating parties.
In the basic form, the Objectives il~col~,orate particular desired contracts,
particular desired products (contracts involving the same future phenomenon) together
with portfolio and consideration payments-resource ...in;,.~---.. and m~ximllm values.
Further, the objectives can be limited by the desired importance "weightingc" on the
individual objectives and particular desired contract entitlement discount rates. In a
more sophictir~ted version, the objectives can include: benefits and costs of alltlllalive
possible hlclelllelltal portfolio gain and loss possibilities, and portfolio expected value
and standard deviation indirrel~nce points. The trading envirol~ ent informationprovided by the system facilities is "broadly indicative" in character, however is
available to the relevant participating parties on a real-time basis. Again, in a more
sophictir~ted version, the hlrollllalion can be highly specific in its relevance.
The functionality of the data filter in a basic version is minim~l, implying that
trading envirolllllelll h~rollllalion provided by the core system facilities is driven solely
by the notion of what the core system is capable of telling participating parties on a
confidential basis, as distinct from the notion of what participating parties would like to
know to make decisions relevant to them. In a more sophi.ctir~t~d version, the filtering
can be signifir~nt and thereby driven by what the order party/counter party wishes to
know. For example, the filter can make live detelll~illalions by a static expert system
or by a dynamic expert/artificial intelligence system.
Further, for the basis of the present description, the following assumptions aremade concerning transactions that can be effected by a participating party. No
partici~alillg party has the ability to effect transactions involving:

CA 02203279 l997-04-2l

WO 96118160 PCTIAU95/00827


(a) yurchasillg or writing an option to be a party to a new (plilllaly)
contract;
(b) exer~;isillg an option to be a party to a new (ylinlaly) contract;
(c) yu~chasillg or writing or option to buy/sell (the positive of zero
entitlement portion of) an existing (secondary) contract;
(d) exen;ising an option to buy/sell (the positive or zero entitlem~-nt of) an
exi~ting (secondary) contract; and
(e) subllli~ g tr~n~rtion~pricing-enquiry orders.
These co~ hl~ mean that participating parties thus can only effect the
10 following types of LIA~lions:
(i) particiy~lh~g parties that have ordering party status only (type A) can:
(a) initiate new (yli~llaly) orders (involving positive or zero
entitlem~nt~ only;
(b) sell its ç~i~ting contracts;
(C) purchase the (positive or zero entitlem~-nt portion) of contracts
offered for sale by others; and
(d) withdraw submitted but as yet unexecuted transactions of the
three-above noted types.
(ii) particiyalil g parties that have both ordering party and counter party
status (termed type B) can:
(a) contiml~lly submit order pricing and limit conditions to the
system;
(b) initiate (primary) orders (involving positive, zero and negative
entitlem~I~t~);
(C) sell (the positive or zero entitl~ment portion of) their existing
contracts;
(d) yulchase the (yositive or zero entitlPm~nt portion) of contracts
offered for sale by others; and

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- 29 -

(e) wiLll~aw submitted but as yet llnPxecl)tPd transactions of the four
above-noted types.
At any point in time, individual particiyaling parties have direct access to
trading en~ ol. u~ illrollllalion so as to have a facility to self-define and be system-
appraised of various data items. Specifically, yalliciydtiilg parties can have access tocore system market conditions, colllylising settled contract information, contract
valuation prices (applicable to all participating parties) and in~ic~tors of agglega~e
transaction volumes and like h~~ dlion. They also can have access to the processing
status (and valuation) of transactions they have previously input to the system
10 comprising their own (valued) existing contracts (with a current "mark-to-market"
valuation, including "offered for sale" contracts and all other contracts, and further
contracts offered for sale by others, their own current order pricing and limit conditions
(type B parties only), their own lmm~t~hed and/or ullcollrllllled new (ylhllal~/) orders
and their own unex~c~lted previously ~ublllillcd instructions to bid for the (positive or
zero) entitlPm~P-nt portion of con~lrmPcl contracts offered for sale by others.
Particil,âtiilg parties also have the facility to self-define both their perceived
"real business" exposure to acsessed relevant future phenomenon and the composition
of their current phenomena forecasts and own-objectives which, in conjull~lion with
current h~llllalion on the status of transactions previously input to the system and core
system-supplied market conditions, underlie the new transaction inputs ~;ullcllLly
recommPn-lP,d by their facilities. This latter composition includes the party's current
phenomena forecasts CcJlllylisillg ~scessed probabilities of selected future phenomena
and their own objectives, including desired contract1 product, portfolio and
consideration yaylllellL resource ~--;-~;---~--, and m~ximllm values and their desired
contract entitlemPnt discount rates.
Furthe.lllore, the participating parties are appraised of new transactions
reco.. ~ P,d for input to the core system facilities and these comprise:

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- 30 -

(i) changes to çxi~ting order pricing and limit conditions m~int~inPd by
the system (type B parties only):
(a) order pricing pal~llc~ls CGlllllliSillg desired future phel~.l~na
pricing probabilities, colll~nission rates and e~titlemPnt discount
rates for individually specified new order transaction types, and
(b) limit conditions Colll~liSillg contract, product and portfolio
... ;l,i.. - and m~ximl-m expected and absolute values (and other
conditions with respect to .. i,.i.. acceptable ordering party
characteristics and desired consideration/entitlPmPnt payment
1 o all~llg~lllents).
(ii) desired new (plimaly) orders, comprising:
(a) an i~PntifiPr of the applicable future phenolllelloll,
(b) sought after entitlPmPnt payouts/l~ceipl~ contingent on the
possible values of the future phPnomPn~
(C) a specified ,.. il.i.,.. ~.n acceptance consideration p~ylllelll amount,(d) specified ~..;l.i-----.-- acceptable coull~ ally characteristics (for
example credit rating, location, etc.), and
(e) desired consideration/e~titlPmPnt payment allangelllellls.
(iii) new instructions to sell (the positive or zero) entitlPmPnt portion of
specified own exi~tin~ contracts, these colll~ ing:
(a) an i~PntifPr of the applicable contract,
(b) a specified ... ~ i..... ., disposal price,
(c) specified .,,illi,..~.... acceptable acquiring party characteristics, and
(d) desired payment arrang~lllell~.
(iV) new instructions to bid for the (positive or zero) entitlPmPnt portion of
existing contracts offered for sale by others, these comprising:
(a) an idPntifiP,r of the applicable contract,
(b) a specified m~ximllm acquisition price, and

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W O 96/18160 PCTIAU9S/00827


(c) desired pay~ arrang~lllcllLs.
(v) instructions to withdraw submitted but as yet lm~xec~t~P~ transactions
of the four above-noted types; these instructions essentially only
coll~lise an itlentifier of the transaction con~e- ~.Pd.
Further to the consideration of participa~h~g parties being ap~laised,
participa~ parties may explicitly or implicitly "authorise" submission of
reco----~ ed new LlAn~ ons to the core system. Thus, following one-time changes
in the data items, the system adjusts to a stable-state involving no further newtransaction reco... ~ A~ions/initiations until additional data changes are made by the
10 participating party concerned or result from the changed status of existing core system
transactions.
The ...Pch~ ... by which the facilities of a participating party contin~Ally
dc~ llfil~e the new trAnC~tions requiring input to the core system is an "objective
function o~ ion" m~ch~nicm, typically formlllAtPd m~thPm~tirAlly as a linear or
non-linear proglA.... i.-g problem. The operation of this mPrhAnicm is autom~ticAlly
triggered by any/all input data changes recorded by the facility.
Furthermore, in at least this embodiment, the mPrh~nicm is likely to be based
on goal proy,rA.... i.~g, a particular type of linear pro~ .. i.. g model. This
opli...i~AIion approach seeks to ...illi...i~ the sum of the weighted difference between
the participating party's specified desired contract, product and portfolio outcomes and
the calculAt~d current value of these measures, subject to no...i~ ed performance and
logical col~LlaillL~ not being violated. The variables in the model are, essenfi~lly, the
five new transaction types set out above. Thus the model contim~lly seeks to
deLtlllline whether and in what form to submit new tranc~tions to the core system to
25 bring the current values of the participating party's selected perfol~ ce measures as
close as possible to their desired values.
Acsuming all three p~lici~âting parties use the above-described ~l~ Alion
mPchAnicm, operation of the system can be thought of as occurring in cycles, the

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co,."..- ~r~m~nt of each cycle being m~rked by, say, the receipt by participating parties
of core system market conditions applying at the completion of the prior cycle and the
processing status of their previously submitted tr~n~ctions to the core system. In
practice, the cycles applying to individual participalil g parties may not be ~lign~d;
however, for ease of explanation here, this is ~c~u.~ to be so.
The cycle applicable to any participating party is shown in Fig. 9, and ~c~l-m
that all particil)aling parties are solely collc~llled about a single, common future
phelloll,~l,on (single product). The variables e~ressed in Fig. 9 are as follows:
b = Participating Party ID (1,2,3 etc.),
t = Applicable cycle,
CSSMS =Core system supplied market conditions (at end of cycle t-l),
PSOPST = Processing status of previously ~ublnil~d transactions,
PRBE = Perceived real-l,u~ ss exposure,
00 = Own objeulives,
NTR = New transactionrec~ tions~
NTD = New transaction ~es~ ch~s.
This cycle repeats as the system is opelatillg.
Reference now is made to Example I. In accordance with that embo~im~nt,
the ordering party, Abbotts & Taylor, and the applicable product couillel~ly,
Abrahamsons, can view the same lld~-.c~ at a higher level that is exemplified asfollows:
Abbott~ & Taylor's persp.ortive ~ttit~
Abbotts & Taylor's involv~nl~lll in the tr~n~ction occurs at the fourth step in
the timeline. This is the point at which Abbotts & Taylor plel)ares a Primary Order
Specification (see chart G4). Chart G4 shows the ~al~llelels that Abbotts & Taylor has
defined for the contract, inrlucling a m~ximllm acceptable contract consideration amount
of 54,000 (coll~ rcial bank Australian dollar deposits). At the fifth step in the
timeline, Abbotts & Taylor des~ak;hes the order for c~ulltcl~ally pricing.

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- 33 -

These fourth and fifth steps in the tim~lin~ respe-;lively correspond to the
above-described variables, NTR and NTD (stAnding for "new transaction
reco,.~ n-lAtions" and "new ll~aclion despatch~-s"). ~suming here that NTR is
equivalent to NTD, the obvious questions begged by this transaction are:
1. Is this Abbotts & Taylor's only transaction at this time and, if so,
why?; and
2. With respect to the llansa~;lion:
- Why is the entitl~om~nt shaped the way it is (see chart G4)? and
- Why was 54,000 (AUD commercial bank deposits) the amount
selecte~ by Abbotts & Taylor as their maximum consideration?
Amongst others, these are questions addressed directly by the above-described
opl;",i,A~ion ",~çhA..i~",. In the language introduced in Fig. 9 as ~licc~l~sed above, had
Abbotts & Taylor been making use of this mech~ni~m, the transaction processing cycle
involving the fourth and fifth steps in the timeline would have co",i~ -red with Abbotts
15 & Taylor receiving their "CSSMS" and "PSOPST". In turn, this il~olll,ation may or
may not have caused them to modify their existing "PRBE", "PF", and "OO"
pal~l,etels. This llltimAtely yielded the single new transaction referred to above. In
this situation, the o~ lf~alion process would have del~llnilled for Abbotts & Taylor
that:
1. They could not be brought any closer to their stated objectives by,
say:
- Withdrawing an existing lmmAteh~d transaction previously
submitted to the system; and/or
- Submitting any other new transactions;
2. Any other shaped entitlement would not yield them as great a
contribution to their objective function as would their specified
entitl~m~nt;

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- 34 -

3. Any higher m~ximnm consideration, if nltim~tely required as a
transaction payment, would worsen their perceived "objective"
position; and
4. Any lower m~ximnm consideration would be likely to cause the
s transaction to remain llnm~t~h~d, thereby again worsening their
"objective" position.
Thus, based on all h~l~ ion ~;u~ lly available to them, submission of this
single new transaction is the best action Abbotts & Taylor can take at this time.
Abr~h~m~on~' ~Cl~ e ~ttit~
In the above-described example, Abrahamsons' involvement in the transaction
occurs at the third step in the timPlinP. This is the point at which Abrahamsons~lcpales a potential c~ulllell~ally product pricing specification and submits this to the
core system. Chart GS shows the ~d."ele,~ that Abrahamsons has defined for
application against incoming new product orders. Chart G5 also shows how Abbotts &
15 Taylor's order enthl~nn~nt is ~ a~d for Abrahamsons' pricing calculations once its
"Defined Ci,~ res ID" has been ascel~il~ed. These pal~llet~l~ include:
1. Commission rate;
2. Discount rate;
3. Component product prices;
4. ~sessed probabilities of oc~;ullellce; and
5. Various contract, product and portfolio mil.i.. -.. and maximum limits
(shown only in chart G7 to be found in Illlc~llalional Application No.
PCT/AU93/00250) .
Thus, for Abrah~l,sons, the third step in the timeline corresponds to the
above-described variables, NTR and NTD (st~n~ling for "new transaction
reco.~ tions" and "new transaction ~1~sp~tch~s"). Again ~snming here that NTR
is equivalent to NTD, the obvious questions begged by this set of pal~llele
specifications is:

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W 096/18160 PCT/AU95/00827


1. Why a commission rate of 1.25%?
2. Why a discount rate of 10%?
3. Why this particular set of component product prices (adding to
1.0402)?
4. Why this particular set of ~csesse~ probabilities of oc~;ullellce? and
5. Why this particular set of contract, product and portfolio l.l;l-ill.~
and m~ximl-m limits?
Amongst others, these are questions addressed directly by the above-described
opli."i~ ion m~ch~nicm. In the language introduced in Fig. 9 as discussed above, had
10 Abrahamsons been making use of this m~ch~ni.cm, the transaction processing cycle
involving the third step in the tim.olin~ would have commrnr-e(l with Abrahamsons
receiving their "CSSMS" and "PSOPST". In turn, this h~ollllation may or may not
have caused them to modify their e~ hlg "PRBE", "PF", and "OO" parameters. This
llltim~tely yielded the single new pal~l~lel-specifying trancaction referred to above. In
this situation, the oplillli~tion process would have d~ nilled for Abrahamsons that
they could not be brought any closer to their stated objectives by, say:
(i) Withdrawing an exicting .. ~lchPcl transaction previously submitted
to the system; and/or
(ii) Subl~ g any other new transactions; and/or
(iii) Increasing or decreasing their sought-after commission rate, discount
rate etc (this would only reduce their aggregate returns from being a
cuuntel~ally); and/or
(iv) Easing or tightening their contract, product and portfolio limits (this
would either remove otherwise wolLhwllile "match" opportunities or
increase the ricl~inr-cs of their overall position).
Thus, again, based on all h~lll~ion cull.,llLly available to them, submission
of this single new parameter-specifying transaction is the best action Abrahamsons can
take at this time.

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-- 36 --



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CA 02203279 1997-04-21

WO 96/18160 PCT/AU9S/00827




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CA 02203279 1997-04-21

WO 96/18160 PCTIAU95/00827

-- 38 --



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A single figure which represents the drawing illustrating the invention.

For a clearer understanding of the status of the application/patent presented on this page, the site Disclaimer , as well as the definitions for Patent , Administrative Status , Maintenance Fee  and Payment History  should be consulted.

Admin Status

Title Date
Forecasted Issue Date Unavailable
(86) PCT Filing Date 1995-12-07
(87) PCT Publication Date 1996-06-13
(85) National Entry 1997-04-21
Examination Requested 2002-11-01
Dead Application 2014-12-09

Payment History

Fee Type Anniversary Year Due Date Amount Paid Paid Date
Filing $150.00 1997-04-21
Maintenance Fee - Application - New Act 2 1997-12-08 $50.00 1997-10-08
Registration of Documents $100.00 1998-02-25
Maintenance Fee - Application - New Act 3 1998-12-07 $100.00 1998-11-17
Maintenance Fee - Application - New Act 4 1999-12-07 $100.00 1999-11-16
Maintenance Fee - Application - New Act 5 2000-12-07 $150.00 2000-11-24
Maintenance Fee - Application - New Act 6 2001-12-07 $150.00 2001-11-23
Request for Examination $400.00 2002-11-01
Maintenance Fee - Application - New Act 7 2002-12-09 $150.00 2002-11-19
Maintenance Fee - Application - New Act 8 2003-12-08 $150.00 2003-11-21
Registration of Documents $100.00 2004-09-30
Maintenance Fee - Application - New Act 9 2004-12-07 $200.00 2004-11-30
Maintenance Fee - Application - New Act 10 2005-12-07 $250.00 2005-11-17
Reinstatement - failure to respond to examiners report $200.00 2006-01-26
Maintenance Fee - Application - New Act 11 2006-12-07 $250.00 2006-11-22
Corrective payment/Section 78.6 $200.00 2007-01-31
Maintenance Fee - Application - New Act 12 2007-12-07 $250.00 2007-11-13
Reinstatement - failure to respond to examiners report $200.00 2008-07-07
Maintenance Fee - Application - New Act 13 2008-12-08 $250.00 2008-11-20
Maintenance Fee - Application - New Act 14 2009-12-07 $250.00 2009-11-23
Maintenance Fee - Application - New Act 15 2010-12-07 $450.00 2010-11-15
Maintenance Fee - Application - New Act 16 2011-12-07 $450.00 2011-11-23
Maintenance Fee - Application - New Act 17 2012-12-07 $450.00 2012-11-22
Current owners on record shown in alphabetical order.
Current Owners on Record
ALICE CORPORATION PTY LTD
Past owners on record shown in alphabetical order.
Past Owners on Record
SHEPHERD, IAN KENNETH
SWYCHCO INFRASTRUCTURE SERVICES PTY LTD
Past Owners that do not appear in the "Owners on Record" listing will appear in other documentation within the application.

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Abstract 1997-04-21 1 55
Claims 1997-04-21 7 243
Drawings 1997-04-21 10 155
Representative Drawing 1997-09-10 1 8
Description 1997-04-21 49 1,996
Cover Page 1997-09-10 2 70
Claims 2006-01-26 6 231
Description 2006-01-26 49 1,977
Claims 2008-07-07 3 96
Description 2008-07-07 49 1,981
Prosecution-Amendment 2007-01-08 10 424
PCT 1997-04-21 16 462
Correspondence 1998-04-03 1 20
Correspondence 2002-02-27 1 14
Prosecution-Amendment 2002-11-01 1 32
Prosecution-Amendment 2003-03-24 1 29
Correspondence 2004-09-30 4 71
Correspondence 2004-10-21 1 3
Correspondence 2004-10-21 1 4
Fees 2005-11-17 1 27
Prosecution-Amendment 2004-07-26 6 209
Fees 2004-11-30 1 27
Prosecution-Amendment 2006-01-26 17 683
Prosecution-Amendment 2006-01-26 2 43
Fees 2000-05-09 1 56
Fees 1997-10-08 1 29
Prosecution-Amendment 2010-03-24 5 194
Fees 2006-11-22 1 30
Prosecution-Amendment 2007-01-31 2 92
Correspondence 2007-03-21 1 16
Fees 2007-11-13 1 28
Prosecution-Amendment 2008-07-07 16 638
Fees 2008-11-20 1 27
Prosecution-Amendment 2010-09-24 25 1,256
Prosecution-Amendment 2011-05-09 4 157
Prosecution-Amendment 2011-11-08 3 135
Prosecution-Amendment 2013-11-15 5 231
Prosecution-Amendment 2013-03-11 4 173
Prosecution-Amendment 2013-09-11 5 220
Prosecution-Amendment 2014-05-15 10 664