Electronic netting system for bilateral trades

Abstract

An electronic netting system. The system may include: (a) a plurality of individual, segregated counterparties for providing bilateral trades, (b) a multi-lateral transaction hub, and (c) a trading system in communication with the transaction hub. The multi-lateral transaction hub may be for (i) providing an aggregation of trades between the counterparties, (ii) providing for multi-lateral netting of selected and authorized bilateral trades, and (iii) apportioning the accumulated trade values among the counterparties according to pre-determined netting parameters including a weighted distribution selectable by at least one of the counterparties. The transaction hub may include: (i) a trade processing system and (ii) a netting system in communication with the trade processing system for providing for the optimized, multi-lateral netting of selected and authorized bilateral trades and apportioning the accumulated trade values among the counterparties.

1 . An electronic netting system, the system comprising:
 (a) a plurality of individual, segregated counterparties for providing bilateral trades; and   (b) a centralized, multi-lateral transaction hub for: (i) providing an aggregation of trades between the counterparties; (ii) providing for multi-lateral netting of selected and authorized bilateral trades; and (iii) apportioning the accumulated trade values among the counterparties according to pre-determined netting parameters including a weighted distribution.   
     
     
         2 . The electronic netting system of  claim 1  further including a trading system in communication with the transaction hub. 
     
     
         3 . The electronic netting system according to  claim 2 , wherein the trading system is an intermediary party. 
     
     
         4 . The electronic netting system according to  claim 3 , wherein the intermediary party includes at least one voice broker. 
     
     
         5 . The electronic netting system according to  claim 3 , wherein the intermediary party is an E-trading system. 
     
     
         6 . The electronic netting system according to  claim 3 , wherein the intermediary party includes at least one voice broker and an E-trading system. 
     
     
         7 . The electronic netting system according to  claim 1 , wherein the individual, segregated counterparties are financial institutions. 
     
     
         8 . The electronic netting system according to  claim 7 , wherein the financial institutions are banks. 
     
     
         9 . The electronic netting system according to  claim 8 , wherein the banks include investment banks. 
     
     
         10 . The electronic netting system according to  claim 1 , wherein the bilateral trades are OTC derivatives. 
     
     
         11 . The electronic netting system according to  claim 10 , wherein the OTC derivatives are credit derivatives. 
     
     
         12 . The electronic netting system according to  claim 11 , wherein the credit derivatives are credit indices.