Synthetic Funds Having Structured Notes

Abstract

The present invention relates to synthetic funds for purchase by investors. A structured note is structured to provide customized equity returns/exposure. Terms of each structured note may be specified by the purchaser and the structured notes may be unsecured liabilities of the obligor, e.g., there are no underlying assets upon which the structure note is based. Thus, there will be no limits on the use of structured note proceeds and management of assets and liabilities will be left entirely to the obligor's discretion. Structured note payment obligations may be related to the performance of an objective valuation, but structured note holders will depend on the good credit of the obligor for payment.

1 . A computer implemented process for creating and issuing instruments for a synthetic fund, comprising:
 receiving at a computer an electronic request to purchase at least one customized structured note, where the request comprises:
 an amount of the at least one structured note; and 
 at least one term of the at least one structured note, where the at least one term of the note includes:
 a) a selection of multiple objective valuation measures (OVM) to provide a desired investment exposure, wherein the selected OVMs have publicly available performance data such that the performance of the customized structured note is ascertainable; 
 b) a valuation of the at least one structured note based on the selected objective valuation measures; and 
 c) a time period for redeeming the at least one structured note. 
 
   electronically generating, using a computer, the at least one structured note based on the request;   receiving, at a computer, payment for the at least one structured note; and   electronically issuing the at least one customized structured note, where the at least one structured note is an unsecured liability of the obligor in which the obligor is expressly under no obligation to purchase assets corresponding to the selected OVMs or to otherwise purchase assets specifically securing the obligation to the purchaser under the customized structured note.   
     
     
         2 . The process according to  claim 1 , where at least one of the multiple objective valuation measures comprises:
 a mutual fund;   a stock market index;   a bond fund;   a bond index;   an inflation index;   a fund of funds;   a hedge fund; or   an interest rate.   
     
     
         3 . The process according to  claim 2 , where the valuation is based on the objective valuation measures without a predetermined amount of fees associated with the objective evaluation measures. 
     
     
         4 . The process according to  claim 2 , where the valuation of the at least one structured note is based in part on the time period for redeeming the at least one structured note. 
     
     
         5 . The process according to  claim 1 , where the payment for the structured note is based on the objective valuation measures at the time the note is issued. 
     
     
         13 . A computer-implemented process for creating and issuing a synthetic fund comprising:
 receiving at a non-transitory processor an electronic request to purchase at least one customized structured note, where the request comprises:
 an amount of the at least one structured note; and 
 at least one term of the at least one structured note, where the at least one term of the note includes: 
 a) identification of multiple objective valuation measures (OVM) to provide an investment exposure, wherein the OVMs have publicly available performance data such that the performance of the customized structured note is ascertainable; 
 b) a valuation of the at least one structured note based on said objective valuation measures, where the valuation is based on the objective valuation measures without a predetermined amount of fees associated with the objective evaluation measures; and 
 c) a time period for redeeming the at least one structured note, where the valuation of the at least one structured note is based in part on the time period for redeeming the at least one structured note; 
   electronically generating, using a non-transitory processor, the at least one structured note based on the request;   receiving, at a processor, payment for the at least one structured note, where the payment for the structured note is based on the objective valuation measure at the time of issuance; and   issuing the at least one customized structured note, where the at least one structured note is an unsecured liability of the obligor in which the obligor is expressly under no obligation to purchase assets corresponding to the selected OVMs or to otherwise purchase assets specifically securing the obligation to the purchaser under the customized structured note.   
     
     
         14 . The process according to  claim 13 , where at least one objective valuation measure is one of:
 a mutual fund;   a stock market index;   a bond fund;   a bond index;   a fund of funds;   an inflation index;   a hedge fund; and   an interest rate.