System And Method For Facilitating Unified Trading And Control For A Sponsoring Organization's Money Management Process

Abstract

An embodiment of the present invention provides a system, method, process, software and standards that enable a unified trading and control process utilized by sponsoring organizations and asset managers (money managers) for sub advised or externally managed investment portfolios as to increase control over the trading process by a sponsoring organization, enhance regulatory compliance, substantially lower trading costs and improve investment performance on a recurring basis for the shareholders and beneficiaries investing in registered and non registered mutual funds and institutional investment portfolios.

What is claimed is: 
     
         1 . A computer-implemented method of trade order routing among a sponsoring organization, an asset manager, and a plurality of executing brokers, the method comprising:
 receiving trade orders at a high touch-low touch engine, the trade orders received through a computer-based order management system using an industry communications protocol, the trade orders each containing data corresponding to an order from the asset manager, and the data incorporating data from an account of the sponsoring organization in the order management system and including data of asset name and number of asset units,   wherein at least one of the order management system and the high touch-low touch engine provides a computer-based graphical user interface and associated software program to asset managers,   wherein the order management system is in communication with a plurality of first executing brokers designated by the asset manager, and a plurality of second executing brokers designated by the sponsoring organization, and   wherein the first and second executing brokers each operate a respective soft dollar administration system that records execution costs, soft dollar costs, and total execution costs associated with the asset manager;   determining, with the high touch-low touch engine, for each trade order, whether the data corresponding to the order from the asset manager indicates a low touch order expected to have low market impact or a high touch order expected to have high market impact;   when the data corresponding to the order from the asset manager indicates a high touch order:
 formatting, by the high touch-low touch engine using the industry communications protocol, the each trade order as a high touch trade order instructing routing of the high touch order to the plurality of first executing brokers, and 
 routing the high touch order to a first executing broker of the plurality of first executing brokers, for execution of the high touch order by the first executing broker, and for determination, by the soft dollar administration system of the first executing broker, of a first total execution cost for the high touch order for the sponsoring organization's account in the order management system based on a sum of the recorded execution and soft dollar costs associated with the asset manager; and 
   when the data corresponding to the order from the asset manager indicates a low touch order:
 formatting, by the high touch-low touch engine using the industry communications protocol, the each trade order as a low touch trade order instructing routing of the low touch order to the plurality of second executing brokers, and 
 routing the low touch order to a second executing broker of the plurality of second executing brokers, for execution of the low touch order by the second executing broker, and for determination, by the soft dollar administration system of the second executing broker, of a second total execution cost for the low touch order for the sponsoring organization's account in the order management system based on the recorded execution cost associated with the asset manager. 
   
     
     
         2 . The method of  claim 1 , further comprising receiving from the first executing broker a report that indicates execution of the high touch order and the first total execution cost. 
     
     
         3 . The method of  claim 1 , further comprising receiving from the second executing broker a report that indicates execution of the low touch order and the second total execution cost. 
     
     
         4 . The method of  claim 1 , wherein the order management system is the asset manager's order management system. 
     
     
         5 . The method of  claim 1 , wherein determining whether the data corresponding to the order from the asset manager indicates a low touch order expected to have low market impact or a high touch order expected to have high market impact, comprises applying logical rules to market data to determine an expected market impact of the trade order. 
     
     
         6 . The method of  claim 1 , further comprising reviewing, by the order management system, the trade order using a rules-based compliance engine to prevent compliance violations. 
     
     
         7 . The method of  claim 1 , further comprising executing, by the first executing broker, the high touch order. 
     
     
         8 . The method of  claim 1 , further comprising executing, by the second executing broker, the low touch order. 
     
     
         9 . The method of  claim 1 , further comprising conducting, by a compliance system associated with the order management system, a rules-based compliance review of a trade order for compliance violations prior to the trade order being sent to the high touch-low touch engine. 
     
     
         10 . The method of  claim 1 , further comprising conducting, by a compliance system associated with the order management system, a rules-based compliance review of the low touch order for compliance violations prior to sending the low touch order to the second executing broker. 
     
     
         11 . The method of  claim 1 , further comprising conducting, by a compliance system associated with the order management system, a rules-based compliance review of the high touch order for compliance violations prior to sending the high touch order to the first executing broker. 
     
     
         12 . The method of  claim 1 , further comprising conducting, by a compliance system associated with the order management system, a pre-trade compliance process that at least one of suspends and cancels a trade order determined to violate compliance rules and that releases a previously suspended trade order that no longer violates compliance rules. 
     
     
         13 . A system for trade order routing among a sponsoring organization, an asset manager, and a plurality of executing brokers, the system comprising:
 a computer-based order management system; and   a computer-based high touch-low touch engine in communication with the order management system,   wherein the order management system is in communication via a computer network with computer-based trading systems and computer-based soft dollar administration systems of the plurality of executing brokers,   wherein the high touch-low touch engine receives through the order management system trade orders each containing data corresponding to an order from the asset manager, the data incorporating data from an account of the sponsoring organization in the order management system and including data of asset name and number of asset units,   wherein at least one of the order management system and the high touch-low touch engine provides a computer-based graphical user interface and associated software program to asset managers,   wherein the order management system is in communication with a plurality of first executing brokers designated by the asset manager, and a plurality of second executing brokers designated by the sponsoring organization,   wherein the first and second executing brokers each operate a respective soft dollar administration system that records execution costs, soft dollar costs, and total execution costs associated with the asset manager,   wherein the high touch-low touch engine determines, for each trade order, whether the data corresponding to the order from the asset manager indicates a low touch order expected to have low market impact or a high touch order expected to have high market impact,   wherein when the high touch-low touch engine determines, for the each trade order, that the data corresponding to the order from the asset manager indicates a high touch order:
 the high touch-low touch engine formats, using an industry communications protocol, the each trade order as a high touch trade order instructing routing of the high touch order to the plurality of first executing brokers, and 
 the order management system routes the high touch order to a first executing broker of the plurality of first executing brokers, for execution of the high touch order by the first executing broker, and for a determination, by the soft dollar administration system of the first executing broker, of a first total execution cost for the high touch order for the sponsoring organization's account in the order management system based on a sum of the recorded execution and soft dollar costs associated with the asset manager, and 
   wherein when the high touch-low touch engine determines, for the each trade order, that the data corresponding to the order from the asset manager indicates a low touch order:
 the high touch-low touch engine formats, using the industry communications protocol, the each trade order as a low touch trade order instructing routing of the low touch order to the plurality of second executing brokers, and 
 the order management system routes the low touch order to a second executing broker of the plurality of second executing brokers, for execution of the low touch order by the second executing broker, and for a determination, by the soft dollar administration system of the second executing broker, of a second total execution cost for the low touch order for the sponsoring organization's account in the order management system based on the recorded execution cost associated with the asset manager. 
   
     
     
         14 . The system of  claim 13 , further comprising the first executing broker and the second executing broker. 
     
     
         15 . The system of  claim 13 , wherein the high touch-low touch engine determines whether the data corresponding to the order from the asset manager indicates a low touch order expected to have low market impact or a high touch order expected to have high market impact by applying logical rules to market data to determine an expected market impact of the trade order. 
     
     
         16 . The system of  claim 13 , wherein the order management system reviews the trade order using a rules-based compliance engine to prevent compliance violations. 
     
     
         17 . The system of  claim 13 , wherein a compliance system associated with the order management system conducts a rules-based compliance review of the each trade order for compliance violations prior to routing the each trade order to the high touch-low touch engine. 
     
     
         18 . The system of  claim 13 , wherein a compliance system associated with the order management system conducts a rules-based compliance review of the low touch order for compliance violations prior to sending the low touch order to the second executing broker, and conducts a rules-based compliance review of the high touch order for compliance violations prior to sending the high touch order to the first executing broker. 
     
     
         19 . The system of  claim 13 , wherein the order management system receives from the first executing broker a report that indicates execution of the high touch order and the first total execution cost, and receives from the second executing broker a report that indicates execution of the low touch order and the second total execution cost. 
     
     
         20 . A computer-implemented method of trade order routing among a sponsoring organization, an asset manager, and a plurality of executing brokers, the method comprising:
 generating trade orders at an order management system, the trade orders each containing data corresponding to an order from the asset manager, and the data incorporating data from an account of the sponsoring organization in the order management system and including data of asset name and number of asset units,   wherein the order management system provides a computer-based graphical user interface and associated software program to asset managers,   wherein the order management system is in communication with a plurality of first executing brokers designated by the asset manager, and a plurality of second executing brokers designated by the sponsoring organization, and   wherein the first and second executing brokers each operate a respective soft dollar administration system that records execution costs, soft dollar costs, and total execution costs associated with the asset manager;   when the data corresponding to the order from the asset manager indicates a high touch order expected to have high market impact:
 formatting, using an industry communications protocol, the each trade order as a high touch order instructing routing of the high touch order to the plurality of first executing brokers, and 
 routing the high touch order to a first executing broker of the plurality of first executing brokers, for execution of the high touch order by the first executing broker, and for determination, by the soft dollar administration system of the first executing broker, of a first total execution cost for the high touch order for the sponsoring organization's account in the order management system based on a sum of the recorded execution and soft dollar costs associated with the asset manager; and 
   when the data corresponding to the order from the asset manager indicates a low touch order expected to have low market impact:
 formatting, using an industry communications protocol, the each trade order as a low touch order instructing routing of the low touch order to the plurality of second executing brokers, and 
 routing the low touch order to a second executing broker of the plurality of second executing brokers, for execution of the low touch order by the second executing broker, and for determination, by the soft dollar administration system of the second executing broker, of a second total execution cost for the low touch order for the sponsoring organization's account in the order management system based on the recorded execution cost associated with the asset manager.