US2014172676A1PendingUtilityA1

Derivatives on compensation-related restricted securities

61
Assignee: BGC PARTNERS INCPriority: Dec 27, 2001Filed: Feb 24, 2014Published: Jun 19, 2014
Est. expiryDec 27, 2021(expired)· nominal 20-yr term from priority
Inventors:Philip GinsbergTimothy H. Heaton
G06Q 40/04
61
PatentIndex Score
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Cited by
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Claims

Abstract

Futures contracts on options contracts are provided in which the duty to purchase the right to purchase a commodity or security may be agreed upon by two or more parties. The futures contract segment of the exchange device is the duty to purchase the underlying options contract at a specific time. The options contract segment of the exchange device is the right to buy an underlying security or commodity. Margin schemes may be included in either segment of the exchange device or the exchange device as a whole.

Claims

exact text as granted — not AI-modified
What is claimed is: 
     
         1 . A method, comprising the steps of:
 at a computer of an electronic trading system designed to trade derivatives on restricted securities, receiving from a first party an order to trade a derivatives contract on restricted securities, the restricted securities being financial instruments of an issuer issued to an issuee as compensation for employment of or services by the issuee to the issuer, the restricted securities being under a restriction on alienability, the restriction having attached to the restricted securities from the date of issue, the derivatives contract creating a duty or power in the purchaser or seller to engage in a transaction in the restricted securities at a delivery date;   receiving at a computer of the electronic trading system a counter order for the derivatives contract from a counterparty; and   as a result of matching of the order and counter order, issuing electronic transfer instructions to transfer the derivatives contract on the restricted securities between the first party and the counterparty.   
     
     
         2 . The method of  claim 1 , further comprising the step of:
 in the electronic trading system, maintaining and executing data instructing delivery of the restricted securities on the delivery date.   
     
     
         3 . The method of  claim 1 , wherein the restricted securities is a restricted employee option contract. 
     
     
         4 . The method of  claim 3 :
 wherein the restricted securities have at least one vesting condition;   the method further comprising holding, in an escrow account, at least a portion of proceeds from the transfer of the derivatives contract until the at least one condition for vesting is satisfied.   
     
     
         5 . The method of  claim 1 , wherein
 the restricted security is a convertible employee option.   
     
     
         6 . The method of  claim 1 :
 wherein the restricted securities include an employee option;   the method further comprising issuing at the delivery date new restricted securities to satisfy a purchaser of the derivatives contract.   
     
     
         7 . The method of  claim 1 , wherein:
 the derivatives contract is transferred subject to one margin scheme based on both the derivative and the restricted securities.   
     
     
         8 . The method of  claim 1 , wherein:
 the derivatives contract is subject to a margin scheme calling for margin against variations in value of the restricted securities; and   the electronic trading system is further programmed to call for margin under the margin scheme as the restricted securities vary in value.   
     
     
         9 . The method of  claim 1 , wherein:
 the derivatives contract order covers a futures contract on restricted securities with a plurality of vesting dates.   
     
     
         10 . The method of  claim 1 , wherein:
 the restricted securities include stock of the issuer.   
     
     
         11 . The method of  claim 1 , wherein:
 the restricted securities include a bond of the issuer.   
     
     
         12 . The method of  claim 1 , wherein:
 the restricted securities include a convertible bond of the issuer.   
     
     
         13 . The method of  claim 1 , wherein:
 the restricted securities include options on equity of the issuer.   
     
     
         14 . A system for trading a derivatives contract on a restricted security, comprising:
 a processor; and   a memory, the memory having stored therein at least one software module that when executed is operable to cause the processor to:
 receive from a first party an order to trade a derivatives contract on restricted securities, the restricted securities being financial instruments of an issuer issued to an issuee as compensation for employment of or services by the issuee to the issuer, the restricted securities being under a restriction on alienability, the restriction having attached to the restricted securities from the date of issue, the derivatives contract creating a duty or power in the purchaser or seller to engage in a transaction in the restricted securities at a delivery date; 
 receive at a computer of the electronic trading system a counter order for the derivatives contract from a counterparty; and 
 as a result of matching of the order and counter order, issue electronic transfer instructions to transfer the derivatives contract on the restricted securities between the first party and the counterparty. 
   
     
     
         15 . The system of  claim 14 , the software module(s) being further operable to cause the processor to:
 maintain and execute data instructing delivery of the restricted securities on the delivery date.   
     
     
         16 . The system of  claim 14 , wherein the restricted securities is a restricted employee option contract. 
     
     
         17 . The system of  claim 16 :
 wherein the restricted securities have at least one vesting condition;   the software module(s) being further operable to cause a processor to hold, in an escrow account, at least a portion of proceeds from the transfer of the derivatives contract until the at least one condition for vesting is satisfied.   
     
     
         18 . The system of  claim 14 , wherein
 the restricted security is a convertible employee option.   
     
     
         19 . The system of  claim 14 :
 wherein the restricted securities include an employee option;   the software module(s) being further operable to cause the processor to issue at the delivery date new restricted securities to satisfy a purchaser of the derivatives contract.   
     
     
         20 . The system of  claim 14 , wherein:
 the software module(s) being further operable to cause the processor to issue transfer instructions for the derivatives contract subject to one margin scheme based on both the derivative and the restricted securities.   
     
     
         21 . The system of  claim 14 , wherein:
 the derivatives contract is subject to a margin scheme calling for margin against variations in value of the restricted securities; and   the electronic trading system is further programmed to call for margin under the margin scheme as the restricted securities vary in value.   
     
     
         22 . The system of  claim 14 , wherein:
 the derivatives contract order covers a futures contract on restricted securities with a plurality of vesting dates.   
     
     
         23 . The system of  claim 14 , wherein:
 the restricted securities include stock of the issuer.   
     
     
         24 . The system of  claim 14 , wherein:
 the restricted securities include a bond of the issuer.   
     
     
         25 . The system of  claim 14 , wherein:
 the restricted securities include a convertible bond of the issuer.   
     
     
         26 . The system of  claim 14 , wherein:
 the restricted securities include options on equity of the issuer.

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