Detection of intra-firm matching and response thereto

Abstract

The disclosed systems and methods relate to allowing trading of over the counter (“OTC”) foreign exchange (“FX”) contracts on a centralized matching and clearing mechanism, such as that of the Chicago Mercantile Exchange's (“CME”'s) futures exchange system (the “Exchange”). The disclosed systems and methods allow for anonymous transactions, centralized clearing, efficient settlement and the provision of risk management/credit screening mechanisms to lower risk, reduce transaction costs and improve the liquidity in the FX market place. In particular, the disclosed embodiments increase speed of execution facilitating growing demand for algorithmic trading, increased price transparency, lower cost of trading, customer to customer trading, and automated asset allocations, recurring trades as well as clearing and settlement efficiencies.

We claim: 
     
         1 . A computer implemented method comprising:
 establishing, by an order processor, that a first order received by the order processor is at least partially counter to a previously received but not yet satisfied second order, the first order including a first electronically encoded identifier identifying a first trading entity, the second order including a second electronically encoded identifier different from the first electronically encoded identifier and identifying a second trading entity; and   preventing, by a transaction processor coupled with the order processor, a matching engine of the intermediary from matching the first and second orders with each other when at least a portion of the first electronically encoded identifier matches at least a portion of the second electronically encoded identifier determined by performance of a logical computer program operation which applies a rule that is satisfied by the first and second electronically encoded identifiers.   
     
     
         2 . The computer implemented method of  claim 1 , wherein the first and second electronically encoded identifiers are encoded in a binary format. 
     
     
         3 . The computer implemented method of  claim 1 , wherein the first electronically encoded identifier comprises a concatenation of data identifying the first trading entity with data identifying the second trading entity and wherein the second electronically encoded identifier comprises a concatenation of data identifying the second trading entity with data identifying the first trading entity. 
     
     
         4 . The computer implemented method of  claim 1 , further comprising determining that the first order is at least partially counter to at least one other order previously received from another trading entity with which the first trading entity is not prevented from transacting and, based thereon, allowing the matching engine to match the first order and the determined at least one other order, and making any unsatisfied remainder of the first order available to match against orders at least partially counter thereto subsequently received from other trading entities with which the first trading entity is not prevented from transacting. 
     
     
         5 . The computer implemented method of  claim 1 , wherein the establishing and preventing are performed without identifying the first trading entity to the second trading entity. 
     
     
         6 . The computer implemented method of  claim 1 , wherein the first trading entity is related to a third trading entity and the second trading entity is related to a fourth trading entity, the rule being satisfied based on the first and second electronically encoded identifiers indicating a relationship between the third and fourth trading entities. 
     
     
         7 . The computer implemented method of  claim 1 , further comprising determining, by the transaction processor, an action to take comprising at least one of electronically notifying the first and second trading entities, canceling at least one of the first and second orders, allowing at least one the first and second orders to be matched to other orders but not to each other, or combinations thereof. 
     
     
         8 . The computer implemented method of  claim 7 , further comprising determining the action based on time of day. 
     
     
         9 . The computer implemented method of  claim 1 , wherein the rule is satisfied when the first and second electronically encoded identifiers indicate that the first and second trading entities are at least part of a common trading entity, are the same trading entity, are contractually related to each other or one of the first and second trading entities specifies the other of the first and second trading entities. 
     
     
         10 . The computer implemented method of  claim 9 , wherein the indication is encoded in the first and second electronically encoded identifiers. 
     
     
         11 . A system comprising:
 an order processor operative to establish that a first order received thereby is at least partially counter to a previously received but not yet satisfied second order, the first order including a first electronically encoded identifier identifying a first trading entity, the second order including a second electronically encoded identifier different from the first electronically encoded identifier and identifying a second trading entity; and   a transaction processor coupled with the order processor and operative to prevent a matching engine of the intermediary from matching the first and second orders with each other when at least a portion of the first electronically encoded identifier matches at least a portion of the second electronically encoded identifier determined by performance of a logical computer program operation which applies a rule that is satisfied by the first and second electronically encoded identifiers.   
     
     
         12 . The system of  claim 11 , wherein the first and second electronically encoded identifiers are encoded in a binary format. 
     
     
         13 . The system of  claim 11 , wherein the first electronically encoded identifier comprises a concatenation of data identifying the first trading entity with data identifying the second trading entity and wherein the second electronically encoded identifier comprises a concatenation of data identifying the second trading entity with data identifying the first trading entity. 
     
     
         14 . The system of  claim 11 , wherein the transaction processor is further operative to determine that the first order is at least partially counter to at least one other order previously received from another trading entity with which the first trading entity is not prevented from transacting and, based thereon, allow the matching engine to match the first order and the determined at least one other order, and making any unsatisfied remainder of the first order available to match against orders at least partially counter thereto subsequently received from other trading entities with which the first trading entity is not prevented from transacting. 
     
     
         15 . The system of  claim 11 , wherein the first trading entity is not identified to the second trading entity. 
     
     
         16 . The system of  claim 11 , wherein the first trading entity is related to a third trading entity and the second trading entity is related to a fourth trading entity, the rule being satisfied based on the first and second electronically encoded identifiers indicating a relationship between the third and fourth trading entities. 
     
     
         17 . The system of  claim 11 , wherein the transaction processor is further operative to determine an action to take comprising at least one of transmission of an electronic notification to the first and second trading entities, cancelation of at least one of the first and second orders, allowance of at least one the first and second orders to be matched to other orders but not to each other, or combinations thereof. 
     
     
         18 . The system of  claim 17 , wherein the action is determined based on time of day. 
     
     
         19 . The system of  claim 11 , wherein the rule is satisfied when the first and second electronically encoded identifiers indicate that the first and second trading entities are at least part of a common trading entity, are the same trading entity, are contractually related to each other or one of the first and second trading entities specifies the other of the first and second trading entities. 
     
     
         20 . The system of  claim 19 , wherein the indication is encoded in the first and second electronically encoded identifiers. 
     
     
         21 . A system comprising:
 means for establishing that a first order received by the order processor is at least partially counter to a previously received but not yet satisfied second order, the first order including a first electronically encoded identifier identifying a first trading entity, the second order including a second electronically encoded identifier different from the first electronically encoded identifier and identifying a second trading entity; and   means for preventing a matching engine of the intermediary from matching the first and second orders with each other when at least a portion of the first electronically encoded identifier matches at least a portion of the second electronically encoded identifier determined by performance of a logical computer program operation which applies a rule that is satisfied by the first and second electronically encoded identifiers.   
     
     
         22 . A system comprising:
 a non-transitory memory storing computer-executable instructions executable by a processor coupled with a network interface to cause the processor to perform operations comprising:
 establishing that a first order received by the order processor is at least partially counter to a previously received but not yet satisfied second order, the first order including a first electronically encoded identifier identifying a first trading entity, the second order including a second electronically encoded identifier different from the first electronically encoded identifier and identifying a second trading entity; and 
 preventing a matching engine of the intermediary from matching the first and second orders with each other when at least a portion of the first electronically encoded identifier matches at least a portion of the second electronically encoded identifier determined by performance of a logical computer program operation which applies a rule that is satisfied by the first and second electronically encoded identifiers.