Agency payment system

Abstract

An agency payment system for transactions covered by a virtual market control entity between participants. The system determines all payments required to be made by each virtual market control entity participant on a given day. It nets all of each of the participant's required payments to be made with the payments received by the virtual market control entity on the previous day due to each participant to obtain a net cash movement, either from the virtual market control entity to the participant's account or from the participant's account to the virtual market control entity. It transfers between the participant's account and the virtual market control entity's account and each participant's account the net cash movements to the virtual market control entity's account. It then transfers between the virtual market control entity's account and each participant's account the net cash movements to the participant's account.

1 . A method for operating an agency payment system for transactions covered by a virtual market control entity between participants in said agency payment system with said virtual market control entity, said transactions being for delivery of a commodity product during a delivery period, said agency payment system having a data entry device, a database, a calculating means, a computing means, and a processor, said method comprising the steps of:
 entering into said database with said data entry device required amounts of product to be delivered and a delivery period based on optional or contingent conditions in connection with each transaction, a cost for the product and calculating the product cost between participants on a single day during the delivery period for each transaction;   determining with said calculating means, during the delivery period for each transaction, for each participant to each transaction, payment of the product cost required to be made to the virtual market control entity or to be received from the virtual market control entity;   determining with said computing means all payments of product costs required to be made and received on a given day by the virtual market control entity, acting solely as an agent for each participant, so as to determine the amount of a potential default by each participant for each transaction at the end of each day;   netting, with said processor, the amounts payable and receivable at the end of each day separately for each participant including all of each participant's required payments of product costs made to the virtual market control entity, and all delivery costs by other participants to said virtual market control entity, which correspond to said virtual market control entity owing the delivery cost to the participant, which are due to the participant, to obtain a net cash single payment movement, either from the virtual market control entity to each participant's bank account or from each participant's bank account to the virtual market control entity; and   transferring said net cash single payment movement for each participant either from the virtual market control entity to each participant's bank account or from each participant's bank account to the virtual market control entity as calculated by the netting step.   
     
     
         2 . A method as claimed in  claim 1  wherein said commodity product is a financial commodity or obligation and delivery may be made in physical delivery of a financial product against payment for such product. 
     
     
         3 . An agency payment system for transactions covered by a virtual market control entity between participants in said agency payment system with said virtual market control entity, said transactions being for delivery of a commodity product during a delivery period, said agency payment system comprising:
 a data entry device for receiving information relating to contract terms and bank information for each transaction and for each participant in each transaction;   a virtual submission interface operating over the Internet to match contract terms of each participant in each transaction to form a binding agency agreement with each participant in each transaction and said virtual market control entity, when a match is determined;   a first calculating means for determining, during the delivery period for each transaction, said delivery period being based on optional or contingent conditions, payment of the product cost, for each participant to each transaction, required to be made to the virtual market control entity or received from the virtual market control entity, so as to determine a potential default by each participant for each transaction at the end of each day if the payment is not made for each transaction;   a second calculating means for determining all payments of product costs under all transactions with each participant required to be made and received on a given day by the virtual market control entity, acting solely as an agent for each participant, so as to determine the amount of a potential default by each participant for each transaction at the end of each day;   a netting means for netting the amounts payable and receivable at the end of each day separately for each participant including all of each participant's required payments of product costs made to the virtual market control entity, and all delivery costs by other participants to said virtual market control entity, which correspond to said virtual market control entity owing the delivery cost to the participant, which is due to the participant, to obtain a net cash single payment movement, either from the virtual market control entity to the participant's bank account or from the participant's bank account to the virtual market control entity; and   a database controller for receiving data on the matched contracts, sending a confirmation to the participants of the contracts, confirming of the agency payment relationship, and transferring the funds between the virtual market control entity and each participant at the end of each day.   
     
     
         4 . A system as claimed in  claim 3  wherein said commodity product is a financial commodity or obligation and delivery may be made in physical delivery of a financial product against payment for such product.