System and method for settling trades

Abstract

A method of settling trades includes the steps of obtaining an authenticated delivery instrument, wherein the authenticated delivery instrument is authenticated by a first exchange and may be used to settle a trade undertaken on the first exchange. An electronic proxy is issued for the delivery instrument, wherein the electronic proxy may be exchanged for the authenticated delivery instrument and where the electronic proxy is used to settle a trade undertaken on a second exchange.

I claim: 
     
         1 . A computer implemented method for settling trades for product that has a physical delivery obligation, the method comprising:
 authenticating a redeemable delivery instrument that may be used to settle a trade undertaken on a first exchange;   creating, with a computer, authentication data representative of the authenticated delivery instrument on a second exchange;   settling a trade undertaken on a second exchange using the authentication data.   
     
     
         2 . The computer implemented method of  claim 1  further comprising arranging physical possession of the underlying product of the trade undertaken on the second exchange using the authentication data. 
     
     
         3 . The computer implemented method of  claim 1 , wherein the authenticated delivery instrument is a receipt. 
     
     
         4 . The computer implemented method of  claim 3 , wherein the receipt is an entry in a database record associated with a clearing firm. 
     
     
         5 . The computer implemented method of  claim 1 , wherein the authenticated delivery instrument is a shipping certificate. 
     
     
         6 . The computer implemented method of  claim 1 , wherein the authenticated delivery instrument may be used to deliver the product only for trades undertaken at the first exchange. 
     
     
         7 . The computer implemented method of  claim 1 , wherein the trade settled on the second exchange comprises a trade of a futures contract. 
     
     
         8 . The computer implemented method of  claim 1 , wherein the trade settled on the second exchange comprises a cash trade. 
     
     
         9 . A computer implemented system for tracking ownership of a product, the system comprising:
 a first exchange interface operative to receive a redeemable authenticated delivery instrument that may be used to settle a trade undertaken on a first exchange;   a second exchange interface operative to receive authentication data representative of the authenticated delivery instrument on a second exchange;   a clearing firm interface operative to transmit the authentication data to a clearing firm in communication with the clearing firm interface, whereby ownership of the redeemable authenticated delivery instrument is transferred from a first trader on the first exchange to a second trader on the second exchange.   
     
     
         10 . The computer implemented system if  claim 9 , wherein the authenticated delivery instrument is a receipt. 
     
     
         11 . The computer implemented system if  claim 10 , wherein the receipt is an entry in a database record associated with a clearing firm. 
     
     
         12 . The computer implemented system if  claim 9 , wherein the authenticated delivery instrument is a shipping certificate. 
     
     
         13 . The computer implemented system if  claim 9 , wherein the authenticated delivery instrument may be used to deliver the product only for trades undertaken at the first exchange. 
     
     
         14 . The computer implemented system if  claim 9 , wherein the trade settled on the second exchange comprises a trade of a futures contract. 
     
     
         15 . The computer implemented system if  claim 9 , wherein the trade settled on the second exchange comprises a cash trade. 
     
     
         16 . A computer implemented method of settling trades for product having a physical delivery obligation, the method comprising:
 providing a redeemable delivery instrument that is authenticated by a first exchange;   issuing, with a computer, authentication data that represents the delivery instrument;   using the authentication data to settle a trade undertaken on a second exchange.   
     
     
         17 . The computer implemented method of  claim 16 , wherein the delivery instrument is a receipt. 
     
     
         18 . The computer implemented method of  claim 16 , wherein the delivery instrument is a shipping certificate. 
     
     
         19 . The computer implemented method of  claim 16  further comprising undertaking a trade. 
     
     
         20 . The computer implemented method of  claim 16 , wherein the step of providing a delivery instrument comprises the step of verifying that an underlying product meets predetermined specifications.