MORELLO, Salvatore (Unit 1705, 127 Kent StreetSydney, New South Wales 2000, AU)
The claims defining the invention are as follows:
1. A method of controlling financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the method includes: receiving, in a funds pool maintained by a processing system, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distributing, using the processing system, at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
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2. The method according to claim 1, wherein the method includes determining, using the processing system, the contribution of funds to be contributed to the funds pool, wherein the contribution of funds is at least one of: a percentage of the purchase funds; and an amount of purchase, funds which exceeds a reserve price for the good or service.
3. The method according to claim 2, wherein at least one of every first party and every second party contributes to the funds pool where said purchase funds exceed respective reserve prices.
4. The method according to any one of claims 1 to 3, wherein the method includes receiving the contribution of funds from at least one of the first party and the second party.
5. The method according to any one of claims 1 to 4, wherein distributing at least some of the accumulated funds includes determining one or more parties that are eligible to receive the funds in the funds pool.
6. The method according to any one of claims 1 to 5, wherein the method includes: calculating, using the processing system, an average contribution of funds to the funds pool; and distributing, using the processing system, at least a portion of the funds that have accumulated in the funds pool to at least one party that was involved in one of the financial transactions resulting in a contribution of funds that was closest to the average contribution of funds for the funds pool.
7. The method according to any one of claims 1 to 5, wherein the method includes: calculating, using the processing system, an average contribution of funds to the funds pool; and , distributing, using the processing system, at least a portion of the funds that have accumulated in the funds pool to the first and second party that were involved in one of the financial transactions resulting in a contribution of funds that was closest to the average contribution of funds for the funds pool.
8. The method according to any one of claims 1 to 7, wherein the method includes analysing, using the processing system, the funds pool to determine if a condition has been met to distribute the funds, wherein if the condition has been met, the processing system distributes the funds accumulated in the funds pool.
9. The method according to claim 8, wherein the condition determines whether sufficient funds have been contributed to the funds pool.
10. The method according to claim 8 or 9, wherein the condition determines whether a required number of contributions have been received in the funds pool.
11. The method according to any one of claims 1 to 10, wherein each first party is a vendor and each second party is a bidder, wherein the method includes: receiving a bid from at least one bidder for the financial transaction; accepting a highest bid by a bidder in respect of each financial transaction, said bidder becoming the respective purchaser; and settling each of said financial transactions.
12. The method according to claim 10 or claim 11, wherein said distributing step further includes distributing the bulk of said funds in the funds pool to at least one party.
13. The method according to any one of claims 10 to 12, wherein the settling step further includes the step of transferring purchase funds for each purchaser that has settled to a financial institution, said purchase funds being equal to respective highest bids.
14. The method according to any one of claims 1 to 13, wherein the purchase funds includes an agent fee.
15. The method according to any one of claims 10 to 14, wherein the method includes transferring, using the processing system, a portion of said purchase funds equal to said reserve price to a respective vendor of each said auction.
16. The method according to any one of claims 1 to 15, wherein said funds pool is maintained by a financial institution.
17. The method according to any one of claims 1 to 16, wherein the method includes: monitoring, using the processing system, a plurality of funds pools; and determining one of the funds pools which the contribution of funds is to be accumulated therein based upon a classification rule.
18. The method according to claim 17, wherein application of the classification rule includes: classifying, using the processing system, the contribution of funds for one of the funds pools based upon at least one of a reserve price for the good or service, the purchase funds, and a proximity which the good and service is located; and allocating the contribution of funds to the classified funds pool.
19. The method according to any one of claims 1 to 18, wherein at least some of the financial transactions are conducted as an auction.
20. A programmable apparatus for controlling a plurality of financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the programmable apparatus is configured to: receive, in a funds pool maintained by the programmable apparatus, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distributing, using the programmable apparatus, at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
21. The programmable apparatus according to claim 20, wherein the programmable apparatus is configured to perform the method according to any one of claims 1 to 18.
22. A computer program product for a programmable apparatus, the computer program product having a computer readable medium having a computer program recorded therein or thereon, the computer program product being configured to control a plurality of financial transactions using the programmable apparatus, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the computer program configures the programmable apparatus to: receive, in a funds pool maintained by the programmable apparatus, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distribute, using the programmable apparatus, at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
23. The computer program product according to claim 22, wherein the computer program product is configured to implement the method of any one of claims 1 to 19.
24. A system for controlling financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the system includes: a means for receiving, in a funds pool, a contribution of funds based upon purchase funds for at least some of the financial transactions; and a means for distributing at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
25. The system according to claim 24, wherein the system is configured to implement the method of any one of claims 1 to 19.
26. A method of controlling financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the method includes: receiving, in a funds pool, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distributing at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
27. A method for controlling a plurality of financial transactions, the method being substantially herein before described.
28. A system for controlling a plurality of financial transactions, the system being substantially herein before described with reference to the accompanying drawings. |
CONTROLLING FINANCIAL TRANSACTIONS
Technical Field
The present invention relates generally to controlling financial transactions, and in one particular, but non-limiting form, the present invention relates to a method, system and computer program product for controlling financial transactions.
Background Art
Generally in a financial transaction the purchaser and seller are competing against each other in order to obtain the best financial situation for themselves. This competition between the buyer and seller can negatively contribute to market instability by raising seller expectations in times of market upturn, or lowering purchaser expectations during periods of market downturn. This instability can have significant influence on other markets, and the greater economy as a whole. The effects of market instability can be financially crippling for vendors or purchasers who choose to enter/leave the market at a time when the instability is not moving in their favoured direction.
Therefore, a need exists to allow financial transactions to be conducted in a manner which may contribute positively to' market stability.
The reference in this specification to any prior publication (or information derived from it), or to any matter which is known, is not, and should not be taken as an acknowledgment or admission or any form of suggestion that that prior publication (or information derived from it) or known matter forms part of the common general knowledge in the field of endeavour to which this specification relates.
Disclosure Of Invention
In one aspect there is provided a method of controlling financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the method includes: receiving, in a funds pool maintained by a processing system, a contribution of funds based upon purchase funds for at least some of the financial transactions; and
distributing, using the processing system, at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contribute^ to the funds pool.
In one form, the method includes determining, using the processing system, the contribution of funds to be contributed to the funds pool, wherein the contribution of funds is at least one of: ( a percentage of the purchase funds; and an amount of purchase funds which exceeds a reserve price for the good or service.
In another form, at least one of every first party and every second party contributes to the funds pool where said purchase funds exceed respective reserve prices.
In another form, the method includes receiving the contribution of funds from at least one of the first party and the second party.
In one form, distributing at least some of the accumulated funds includes determining one or more parties that are eligible to receive the funds in the funds pool.
In another form, the method includes: calculating, using the processing system, an average contribution of funds to the funds pool; and distributing, using the processing system, at least a portion of the funds that have accumulated in the funds pool to at least one party that was involved in one of the financial transactions resulting in a contribution of funds that was closest to the average contribution of funds for the funds pool.
In one embodiment, the method includes: calculating, using thq /.processing system, an average contribution of funds to the funds pool; and distributing, using the processing system, at least a portion of the funds that have accumulated in the funds pool to the first and second party that were involved in one of the
fmancial transactions resulting in a contribution of funds that was closest to the average contribution of funds for the funds pool.
In another embodiment, the method includes analysing, using the processing system, the funds pool to determine if a condition has been met to distribute the funds, wherein if the condition has been met, the processing system distributes the funds accumulated in the funds pool.
In one optional form, the condition determines whether sufficient funds have been contributed to the funds pool.
In another additional or alternate form, the condition determines whether a required number of contributions have been received in the funds pool.
Optionally, each first party is a vendor and each second party is a bidder, wherein the method includes: receiving a bid from at least one bidder for the financial transaction; accepting a highest bid by a bidder in respect of each financial transaction, said bidder becoming the respective purchaser; and settling each of said financial transactions.
In another form, said distributing step further includes distributing the bulk of said funds in the funds pool to at least one party.
In one embodiment, the settling step further includes the step of transferring purchase funds for each purchaser that has settled to a financial institution, said purchase funds being equal to respective highest bids.
In another embodiment, the purchase funds includes an agent fee.
In one form, the method includes transferring, using the processing system, a portion of said purchase funds equal to said reserve price to a respective vendor of each said auction.
In another form, said funds pool is maintained by a financial institution,
In an optional form, the method includes: monitoring, using the processing system, a plurality of funds pools; and determining one of the funds pools which the contribution of funds is to be accumulated therein based upon a classification rule.
In another optional form, application of the classification rule includes: classifying, using the processing system, the contribution of funds for one of the funds pools based upon at least one of a reserve price for the good or service, the purchase funds, and a proximity which the good and service is located; and allocating the contribution of funds to the classified funds pool.
Optionally, at least some of the financial transactions are conducted as an auction.
In another aspect there is provided a programmable apparatus for controlling a plurality of financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the programmable apparatus is configured to: receive, in a funds pool maintained by the programmable apparatus, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distributing, using the programmable apparatus, at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool. :
In another aspect there is provided a computer program product for a programmable ' apparatus, the computer program product having a computer readable medium having a computer program recorded therein or thereon, the computer program product being configured to control a plurality of financial transactions using the programmable apparatus, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the computer program product configures the programmable apparatus to:
receive, in a funds pool maintained by the programmable apparatus, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distribute, using the programmable apparatus, at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
In another aspect there is provided a system for controlling financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the system includes: a means for receiving, in a funds pool, a contribution of funds based upon purchase funds for at least some of the financial transactions; and a means for distributing at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
In another aspect there is provided a method of controlling financial transactions, wherein each financial transaction includes a first party selling a good or service to a second party, wherein the method includes: receiving, in a funds pool, a contribution of funds based upon purchase funds for at least some of the financial transactions; and distributing at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool.
Brief Description Of Figured
Embodiments of the present invention are described with reference hereinafter to the drawings, in which:
Figure 1 is a block diagram of an existing arrangement for conducting financial transactions for an auction;
Figure 2 is a block diagram of an example system for controlling financial transactions of
an auction;
Figure 3 is a flow diagram of an example method for controlling financial transactions of an auction;
Figure 4 is a flow diagram of an example method for redistributing excess funds;
Figure 5 is a flow diagram of an example method for controlling financial transactions of an auction;
Figure 6 is a schematic block diagram of an example of a general purpose computer upon which arrangements described can be practiced;
Figure 7 is a flow diagram representing an example of a method of controlling financial transactions;
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Figure 8 is a block diagram representing an example of a system of controlling financial transactions; and
Figure 9 illustrates tables representing an example of a method and system of controlling stock market transactions.
Modes for Carrying Out The Invention
Where reference is made in any one or more of the accompanying drawings to steps and/or features, which have the same reference numerals, those steps and/or features have for the purposes of this description the same functions or operations, unless the contrary intention appears.
Figure 7 illustrates a flow diagram representing an example of a method for controlling a plurality of financial transactions, wherein each financial transaction includes a first party selling an asset including a good or service to a second party. In particular, at step 810 the method 800 includes receiving, in a funds pool, a contribution of funds based upon
purchase funds for at least some of the financial transactions. At step 820 the method 800 includes distributing at least some of the funds that have accumulated in the funds pool to at least one of the parties involved in one of the financial transactions which contributed to the funds pool. In one form a.programmable apparatus such as a processing system, as will be described in more detail later, can be used to perform steps 810 and 820.
Figure 8 shows a system 900 for controlling financial transactions (A, B), wherein each financial transaction (A, B) includes a first party selling a good or service 902 to a second party, wherein the system 900 includes a means for receiving, in a funds pool 901, a contribution of funds based upon purchase funds 903 for at least some of the financial transactions (A, B), and a means for distributing 905 at least some of the funds that have accumulated in the funds pool 901 to at least one of the parties (A, B) involved in one of the financial transactions which contributed to the funds pool 901. In one form, the means for receiving and the means for distributing can be provided in the form of an apparatus such as a processing system 906.
In one form, the method ^can include determining the contribution of funds to be contributed to the funds pool. This step can be performed using a processing system. In some forms, the contribution of funds is determined using a contribution rule which can include at least one of determining a percentage of the purchase funds; and determining an amount of purchase funds which exceeds a reserve price for the good or service. In some forms, one of the first party and the second party can apply the contribution of funds to the funds pool. However, in other forms, both the first and second party apply the contribution to the funds pool.
In one form, distributing 905 at least some of the funds includes determining one or more parties that are eligible to receive the funds in the funds pool 901. This step can be performed by the processing system 906. In one specific form, determining the parties that are eligible to receive the funds can include calculating an average contribution of funds to the funds pool 901. This step,,can be performed by the processing system 906. Next, the method and system includes distributing at least a portion of the funds that have accumulated in the funds pool 901 to at least one party that was involved in one of the
fϊnancial transactions resulting in a contribution of funds that was closest to the average contribution of funds for the funds pool. Again, this step can be performed by a processing system 906. As both parties have a vested interest in possibly obtaining at least a portion of the distributed funds, both parties in each financial transaction are encouraged to work together rather than compete against each other in the respective financial transaction, which results in a stabilisation in the market.
In an alternate form, the method an system can include distributing, using the processing system 906, at least a portion of the funds that have accumulated in the funds pool to the first and second party that were involved in one of the financial transactions resulting in a contribution of funds that was closest to the average contribution of funds for the funds pool 901. In this form, both of the parties are rewarded for performing a financial transaction which stabilises the market.
In one form, the method and system includes analysing, using the processing system 906, the funds pool 901 to determine if a condition has been met to distribute the funds, wherein if the condition has been met, the processing system 906 distributes the funds accumulated in the funds pool 901. In one optional form, the condition determines whether sufficient funds have been contributed to the funds pool 901. In an additional or alternate form, the condition determines whether a required number of contributions have been received in the funds pool 901.
As will be appreciated by people skilled in the art, the method and system described herein is not necessarily limited to: a particular type of financial transaction. However, in one preferable form, the method and system can be implemented in the form of an auction, as will be described in more detail below.
An auction is the process of selling a vendor's property and/or services by accepting one or more bids from potential purchasers. Common types of auction include the traditional English style auction where potential purchasers openly bid monetary amounts to secure sale of a vendor's property and/or services, with the highest bid normally being accepted as the winning big. In Dutch (or Chinese) style auctions, a vendor or agent acting on behalf of
a vendor begins the auction with an-opening offer, gradually lowering the offer until a first purchaser bids an amount equal to the offer.
An agent is usually engaged by a vendor to act on behalf of the vendor when approaching and negotiating with potential purchasers. An agent is typically well versed in the preparation and conduct of an auction, and may conduct several auctions concurrently on behalf of one or more vendors. In some markets, an agent must be registered to conduct an auction on behalf of a vendor. Skilled agents may often illicit impulse decisions from purchasers, such as instigating adversarial tactics between purchasers, in an attempt to secure a higher than anticipated winning bid.
An agent and vendor usually agree to a reserve price prior to the commencement of an action. The reserve price is a minimum price the vendor is willing to sell the product and/or services. In certain situations, the vendor may choose to lower a reserve price during the auction to ensure that the property and/or services are sold. When a bidder wins an auction, the winning bidder provides funds to the vendor in exchange for the property and/or services.
The achievable selling price of a product or service being auctioned is dependent upon the condition of the market at the time of the auction. The traditional method of financial transactions occurring after an auction can negatively contribute to market instability by raising seller expectations in times of market upturn, or lowering purchaser expectations during periods of market downturn. This instability can have significant influence on other markets, and the greater economy as a whole. The effects of market instability can be financially crippling for vendors or purchasers who choose to enter/leave the market at a time when the instability is not moving in their favoured direction.
Figure 1 is a block diagram of a system 100 according to an existing arrangement for conducting financial transactions for an auction. In the system 100, a vendor 102 seeks to sell property and/or services via an auction. The vendor 102 normally engages an agent 104 to act on behalf of the vendor 102 such that the agent 104 is responsible for conducting of the auction. In some instances, an agent 104 approved by a regulatory authority may be
required to sell the property and/or services at an auction.
The auction can be conducted according to any rules and in the manner agreed upon by the vendor 102 and agent 104. For example, the auction may be conducted as a silent auction wherein potential buyers (not shown) submit a single bid, with the buyer who submits the highest bid winning the auction. The winning buyer may then become the purchaser 106, and the highest bid is the purchase price. Alternatively, the auction may be conducted in a traditional English style, where the buyers submit multiple increasing bids. The final bidding buyer in such an auction then becomes the purchaser 106, and the final bid is the purchase price.
In some auctions, a "cooling off period is granted, during which time the purchaser 106 may reconsider or retract the offer to buy the property and/or services from the vendor 102. At the completion of the auction, and after any cooling off period, the settlement of the auction occurs where the vendor 102 receives purchase funds from the purchaser 106 in exchange for providing the property and/or services. In the system 100 illustrated, during settlement, the purchaser 106 transfers purchase funds equal to the purchase price to a financial institution(s) 108. The financial institution(s) 108 may include one or more financial institutions such as vendor's bank (not shown) or a purchaser's bank (not shown). The vendor's and purchaser's banks may transfer money between one another, as directed by the respective vendor 102 and purchaser 104. The purchase funds are then transferred from the financial institution(s) 108 to the vendor 102.
An agent fee is paid to the agent 104 by the vendor 102 for conducting the auction. The agent fee may be fixed or variable, for example, in accordance with the purchase price which the agent 104 achieves for the vendor 102. In the system 100, once settlement between the purchaser 106 and vendor 102 has occurred, the vendor pays an agent fee based on the price of property and/or services sold.
In an auction according to this system 100, the agent 104 conducting the auction encourages the buyers to submit increasingly high maximum bids. This is done for a variety of reasons such as a desire to ensure the vendor achieves the highest possible price,
and/or to increase fees payable to the agent 104 in situations where the agent fee is at least partially based up on the purchase price. This can lead to excessively high winning bids, which may be well above the reserve price required by the. vendor 102. Whilst this method may be preferred by vendors during periods of prosperity for the property and/or services being auctioned, it contributes to market instability by creating unrealistic market expectations by other vendors (not shown).
In an alternative arrangement (not shown) the vendor 102 may not need to engage an agent 104 and may conduct the auction on their own behalf. This does not significantly affect the financial transactions of the main participants in the auction, namely the vendor 102 and purchaser 106. Whilst the vendor 102 is no longer required to pay the agent 104 an agent fee, the purchaser still needs to provide purchase funds to the vendor 102 in exchange for obtaining the property and/or services from the vendor 102.
Referring to Figure 2 there is shown a block diagram of a system according to the present disclosure. The system 200 dnγolves a vendor 202, an agent 204, a purchaser 206 and a financial institution(s) 208. According to the system 200, the vendor 202 and agent 204 agree to a reserve price 211 and conduct an auction according to the auctioning method agreed upon between the vendor 202 and the agent 204. The highest bid from a buyer becomes the purchase price 213, and the respective buyer (not shown) becomes the purchaser 206.
The settlement of the auction occurs when the purchaser 206 provides the funds for the purchase price to the financial institution(s) 208. Preferably, the purchaser 206 is able to transfer the purchase price funds from a purchaser computer 214, which may reside at the purchaser's residence, workplace, or alternatively may be a portable computer with a suitable (e.g. wireless) mechanism for accessing electronic payment facilities (not shown). The financial institution(s) 208 receive the purchase price funds via at least one financial institution(s) computer 216. The purchase price funds include at least two components, namely a reserve funds component (not shown) equal to the reserve price, and an excess funds component 215. In a preferred embodiment, where an agent 204 is engaged by a vendor 202 to conduct the auction, the purchase price funds also include an agent fee
component 217. The financial institution(s) 208 may include a purchaser bank (not shown), vendor bank (not shown) and agent bank (not shown). In the system 200, the reserve price funds are transferred to a vendor bank within the financial institution(s) 208, and the reserve price funds may be subsequently transferred to the vendor 202. Preferably, the above transfer to the vendor 202 may be made by a secure connection between a financial institution(s) computer 216 and a vendor computer 210. Thus, according to the system 200, the vendor is assured of receiving the reserve price 211, which was originally agreed upon between the vendor 202 and the agent 204. An agent bank (not shown) may receive an agent fee from a purchaser bank (not shown), both banks being within the financial institution(s) 208. A financial institution(s) computer 216 then transfers the agent fee 217 to an agent computer 212 for access by the respective agent 204.
A financial institution computer 216 maintains the excess funds in the funds pool 218 (herein referred to as the excess funds pool 218). Preferably the excess funds pool 218 is held by an agent bank computer (not shown) within the financial institution(s) 208. Each time a product and/or service is sold above a reserve price 211 at an auction, the excess funds are transferred to an excess funds pool 218. Generally, the excess funds pool 218 is established and maintained by the financial institution(s) 208, although the pool may
• s ' i . equally be maintained by an* agent 204. The excess funds pool 218 is analysed, generally by the processing system 216, to ascertain if sufficient excess funds have been contributed to the excess funds pool 218. If there are sufficient funds, the pool 218 is distributed to at least one party (202, 206) whom participated in one of the financial transactions. In one form, the pool can be distributed to at least one purchaser having contributed to the excess funds pool 218. The level of sufficient funds may be based upon a number of criteria such as, for example, total amount of excess funds contributions, number of contributors, or percentage total of cumulative purchase price. By means of example only, a financial institution(s) 208 may distribute funds each time a predetermined number of purchasers contribute to the excess funds pool 218. For example, the predetermined number may be 10. Distribution of excess funds 215 at regular intervals is useful in traditionally more volatile markets as the distribution ensures a regular turnover of purchasers such that each excess funds pool 218 involves purchasers being subjected to similar market conditions. Generally, multiple excess funds pool 218 are established, with each pool being segregated
based on contributions from purchasers in auctions with similar features, such as, for example, physical proximity, reserve price, or purchase price.
In one particular form, the excess funds pool 218 may be distributed to a designated party (202, 206) based on any criteria defined by the agent 204 or financial institution(s) 208 associated with the excess funds pool 218. For example, the excess funds 215 may be distributed to a random party 202, 206 such as a purchaser 206 having contributed to the pool 218. In a preferred implementation, the pool 218 is contributed to by purchasers 206 who win an auction at a purchase price 213 within a predefined range, and the pool 218 is distributed to at least one party 202, 208 who was involved in a financial transaction which contributed in an excess funds contribution that was closest to the average of all the contributions to the excess funds pool 218. By distributing the funds 215 according to the average of the contributions in a purchase price segregated excess funds pool 218, the purchasers 206 are encouraged to bid in a more conservative manner dependant upon similarly priced auctions. Furthermore, vendors are encouraged to sell goods and/or services at reasonable prices rather than over-inflated prices. This promotes a more stable market with less susceptibility to rapid price fluctuations, as in markets where traditional auction financial transactions are utilised.
In the system of the present disclosure, the vendor 202 maintains the option to not sell a product and/or services if the maximum bid at auction does not reach a reserve price, being equal to the reserve funds which the vendor 202 receives with settlement.
The vendor 202 is also benefited by the stabilised market, by having greater certainty over the achievable reserve price, and a more intrinsic understanding of the value of the property and/or services based upon similar property and/or services having been recently sold. In one particular, but not necessarily limited, embodiment, the system is applied to the real estate property market and in particular the housing property market. However, it will be appreciated that the disclosed method and system can be applied to a large range of financial transactions.
Figure 3 is flow diagram of a method 400 for controlling the financial transactions of an
auction according to an embodiment of the invention, A vendor selling property and/or services engages an agent (Step 402). The vendor selling property and/or services engages the agent to act on behalf of the vendor and to also conduct the auction of the property and/or services, The vendor agrees on a reserve price (Step 404). This may involve the vendor and agent liaising with one another to determine what is an appropriate and desirable reserve price to set for the auction of the property and/or services. Typically, the agent 204 will have insight into the particular market of the property and/or services to be sold and will able to provide guidance to the vendor 202 about a fair and equitable price to ask for reserve. The auction is then conducted (Step 406). The agent receives one or more bids from at least one bidder. During the auction, it can be determined if the bidding reaches the reserve price (Step 408). If the bidding for the auctioned property and/or services does not reach the reserve price ( 1 No'), the auction ends without sale (Step 410). The auction may proceed again at a later time. In an alternative embodiment, the vendor may choose to lower the reserve price sufficiently (at Step 408) to ensure that the auction reaches the revised reserve price.
If it is determined at Step 408 that the auction has reached the reserve price (υes 1 ), the property and/or services are sold to the purchasers (Step 412). The purchaser is the winning bidder. A cooling off period may be implemented after the purchaser wins the auction, during which time the purchaser may decide not to proceed with the purchase. In the method 400 of Figure 3, once the property and/or services are sold (at Step 412), the auction settles (Step 414). The settlement involves the purchaser transferring purchaser funds to a financial institution(s) for subsequent transfer to a number of parties to the auction. Generally, the processing system of the financial institution receives the purchase funds from the purchaser, wherein the processing system is configured to distribute one or more portions of the received funds. A portion of the purchase funds equal to the reserve price is transferred, using the processing system, to the vendor 202. Another portion of the purchase funds is transferred, using the processing system, to the agent as agent fees for conducting the auction on behalf of the vendor, if such an agent is engaged. The remaining portion of the purchase funds is the excess funds, which are transferred, using the processing system, to an excess funds pool. In an alternative embodiment, the portion of the purchase funds equal to the reserve price that is transferred to the vendor further
includes the agent fees. In such an implementation, the vendor is then required, using the processing system, to transfer' agent fees to the agent for conducting the auction. If the vendor 202 conducts the auction without the services of an agent, there are no agent fees payable, and therefore all purchase funds at or below the reserve price are transferred, using the processing system, to the vendor, and the excess is transferred, using the processing system, to the excess funds pool.
The excess funds pool is contributed to by a plurality of purchasers from auctions, who proceed with settlements of respective auctions. The excess funds pool is distributed to at least one of the plurality of purchasers who contributed to the pool according to a predetermined or specified technique (Step 416). In one implementation, the excess funds pool is distributed, using the processing system, to at least one party involved in a financial transaction which resulted in a contribution of excess funds to the excess funds pool which is closest to the average of ^aIl excess funds contributed to the respective pool. In on particular form, the excess funds pool is distributed, using the processing system, to the purchaser whose contribution of excess funds to the excess funds pool is closest to the average of all excess funds contributed to the respective pool. In an alternative form, the excess funds pool is distributed, using the processing system, to the vendor who was involved in one of the financial transactions which resulted in the contribution of excess funds to the excess funds pool which was closest to the average of all excess funds contributed to the respective pool. In another form, the excess funds pool is distributed to the purchaser and vendor whom performed a financial transaction which resulted in a contribution to the excess funds pool and wherein the contribution was closest to the average of all excess funds to the pool. In this implementation, both the vendor and purchaser are rewarded for performing a realistic financial transaction in the marketplace.
Alternatively, the excess funds can be distributed, using the processing system, to one or more random parties, for example, based on a lottery system. In this instance, the processing system may use a random or pseudo-random number generator to determine one or more random parties whom the excess funds pool is to be distributed to. In another implementation, the funds 'are distributed, using the processing system, to one of the parties involved in an excess' funds contributing financial transaction which contributed
either the most amount or least amount of excess funds. In another implementation, the excess funds are distributed, using the processing system, equally amongst each of the auction purchasers who contributed to the excess funds pool. In another implementation, the excess funds are distributed, using the processing system, equally amongst each of the auction vendors involved in . excess funds contributing financial transactions for the respective excess funds pool. In another implementation, the excess funds are distributed, using the processing system, equally amongst each of the partied involved in excess funds contributing financial transactions for the excess funds pool.
Figure 4 is a flow diagram of a method 500 of determining when the excess funds pool are to be distributed, as in Step 416 of Figure 3. Generally, the excess funds pool is distributed once one or more conditions are met. The excess funds from the purchaser settling (at Step 414) are pooled into an excess funds pool (Step 502). The excess funds pool may be controlled by the financial institution(s) or an agent associated with the excess funds pool. The agent or financial institution(s) controlling the pool decide when there are sufficient funds in the pool, and when distribution should occur. In this instance, the processing system of the agent or financial institution can be configured to determine whether one or more conditions have been met in order to begin the distribution process. In Figure 4, the excess funds pool is considered to have sufficient funds when a predefined number of purchasers have contributed to the fund (ie. funds have been received and are present in the excess funds pool). In this instance there may be a number of parties who have intended to settle, but have not currently contributed funds towards the excess funds pool, and thus these financial transactions have not been completed for meeting the one or more conditions to initiate the distribution process. The excess funds pool is analysed, using the processing system, to determine if the particular number of purchasers have contributed (Step 504). If there have not been a sufficient number of purchasers that contributed, the excess funds pool is not distributed, and the excess funds pool must be analysed again, using the processing system, once another purchaser has contributed (Step 506). If, on the other hand, the processing system determines (at Step 504) that a sufficient number of purchasers have contributed ,to the excess funds pool, the processing system is configured to begin the distribution of the excess funds pool (Step 508).
Figure 5 is a flow diagram of the method 600 of controlling financial transactions of a plurality of auctions according to an embodiment of the invention. Bids are received from bidders in the auctions (Step 602). The bids may be received by an agent, or alternatively by a vendor if no agent is engaged to conduct the auctions. A bidder is accepted as the highest bidder in each of the auctions (Step 602). The highest bidder is the purchaser for the respective auction (Step 604). Each of the auctions is settled by the purchaser (Step 608). The purchaser contributes excess funds to an excess funds pool (Step 610), the excess funds being above a reserve price. The excess funds is received via a processing system in an excess funds pool. The excess funds pool is then distributed, using a processing system, to at least one of the parties involved in the auction. In one form, the excess funds pool is distributed, using the processing system to at least one of the purchasers whom contributed to the excess funds pool (Step 612). However, as previously discussed, vendors may also be eligible to receive at least a portion of the excess funds in the excess funds pool.
The method of controlling financial transactions of an auction may be implemented using a computer system 700, such as that shown in Fig. 6 wherein the processes of Figs. 3-5 may be implemented as software 750, such as one or more application programs executable within the computer system 700. In particular, the steps of method of controlling financial transactions of an auction are 'effected by instructions in the software that are carried out within the computer system 700. The instructions may be formed as one or more code modules, each for performing one or more particular tasks. The software may also be divided into two separate parts, in which a first part and the corresponding code modules performs the controlling financial transactions of an auction methods and a second part and the corresponding code modules manage a user interface between the first part and the user. The software may be stored in a computer readable medium, including the storage devices described below, for example. The software is loaded into the computer system 700 from the computer readable medium, and then executed by the computer system 700. A computer readable medium having such software or computer program recorded on it is a computer program product. The use of the computer program product in the computer system 700 preferably effects an advantageous apparatus for controlling financial transactions of an auction.
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As seen in Fig. 6, the computer system 700 is formed by a computer module 701, input devices such as a keyboard 702 and a mouse pointer device 703, and output devices including a printer 715, a display device 714 and loudspeakers 717. An external Modulator-Demodulator (Modem) transceiver device 716 may be used by the computer module 701 for communicating to and from a communications network 720 via a connection 721. The network 720 may be a wide-area network (WAN), such as the Internet or a private WAN. Where the connection 721 is a telephone line, the modem 716 may be a traditional "dial-up" modem. Alternatively, where the connection 721 is a high capacity (eg: cable) connection, the modem 716 may be a broadband modem. A wireless modem may also be used for wireless connection to the network 720.
The computer module 701 typically includes at least one processor unit 705, and a memory unit 706 for example formed from semiconductor random access memory (RAM) and read only memory (ROM). The module 701 also includes an number of input/output (I/O) interfaces including an audio-video interface 707 that couples to the video display 714 and loudspeakers 717, an UO interface 713 for the keyboard 702 and mouse 703 and optionally a joystick (not illustrated), and an interface 708 for the external modem 716 and printer 715. In some implementations, the modem 716 may be incorporated within the computer module 701, for example within the interface 708. The computer module 701 also has a local network interface 711 which, via a connection 723, permits coupling of the computer system 700 to a local computer network 722, known as a Local Area Network (LAN). As also illustrated, the local network 722 may also couple to the wide network 720 via a connection 724, which would typically include a so-called "firewall" device or similar functionality. The interface 711 may be formed by an Ethernet circuit card, a wireless Bluetooth™ or an IEEE 802.21 wireless arrangement.
The interfaces 708 and 713 may afford both serial and parallel connectivity, the former typically being implemented according to the Universal Serial Bus (USB) standards and having corresponding USB connectors (not illustrated). Storage devices 709 are provided and typically include a hard disk drive (HDD) 710. Other devices such as a floppy disk drive and a magnetic tape drive (not illustrated) may also be used. An optical disk drive
712 is typically provided to act as a non- volatile source of data. Portable memory devices, such optical disks (eg: CD-ROM, DVD), USB-RAM, and floppy disks for example may then be used as appropriate sources of data to the system 700.
The components 705 to 713 of the computer module 701 typically communicate via an interconnected bus 704 and in a manner which results in a conventional mode of operation of the computer system 700 known to those in the relevant art. Examples of computers on which the described arrangements can be practiced include IBM-PC's and compatibles, Sun Sparcstations, Apple Mac Tm or alike computer systems evolved therefrom.
Typically, the application programs discussed above are resident on the hard disk drive 710 and read and controlled in execution by the processor 705. Intermediate storage of such programs and any data fetched from the networks 720 and 722 may be accomplished using the semiconductor memory 706, possibly in concert with the hard disk drive 710. In some instances, the application programs may be supplied to the user encoded on one or more CD-ROM and read via the corresponding drive 712, or alternatively may be read by the user from the networks 720 or 722. Still further, the software can also be loaded into the computer system 700 from other computer readable media. Computer readable media refers to any storage medium that participates in providing instructions and/or data to the computer system 700 for execution and/or processing. Examples of such media include floppy disks, magnetic tape, CD-ROM, a hard disk drive, a ROM or integrated circuit, a magneto-optical disk, or a computer readable card such as a PCMCIA card and the like, whether or not such devices are internal or external of the computer module 701. Examples of computer readable transmission media that may also participate in the provision of instructions and/or data include radio or infra-red transmission channels as well as a network connection to another, computer or networked device, and the Internet or Intranets including e-mail transmissions and information recorded on Websites and the like.
The second part of the application programs and the corresponding code modules mentioned above may be executed to implement one or more graphical user interfaces
(GUIs) to be rendered or otherwise represented upon the display 714. Through manipulation of the keyboard 702 and the mouse 703, a user of the computer system 700
and the application may manipulate the interface to provide controlling commands and/or input to the applications associated with the GUI(s).
In one form, the computer system 700 includes a selection module which is used to select the at least one party whom the excess funds are distributed. In one form, the selection module can be configured to determine an average excess funds contribution for a respective pool. Then, the selection module is configured to determine one of the parties involved in one of the contributing financial transactions which contributed excess funds to the respective pool which is closest to the determined average excess funds contribution. In an alternative form, the selection module is configured to perform a lottery system, wherein the selection module includes a random number generator which generates a random number. The selection module includes a control unit which uses the generated random number to select one of the parties involved with one of the contributing financial transactions. In particular, the parties involved in financial transaction whom contributed to the pool may be stored in a list, wherein the random number generator is used to generate a random integer ranging between 1 and a maximum number of purchasers in the list. The random number generated by the random number generator is then used to select one of the party in a position in the list which corresponds to the generated random number.
In an alternate form to the . selection module, the computer system 700 may include a distribution module which is configured to equally distribute the excess funds amongst each of the parties involved in a contributing transaction which contributed to the respective excess funds pool. In particular, the distribution module divides the total amount of excess funds in the respective excess funds pool by the number of parties whom were involved in contributing transactions to the respective excess funds pool to determine equal portions of the excess funds which are to transferred to the respective parties.
In another alternate form, the computer system 700 may include a distribution module which is configured to equally distribute the excess funds amongst each of the parties involved in the auction. In particular, the distribution module divides the total amount of excess funds in the respective excess funds pool by the number of partied involved in the contributing financial transactions to determine equal portions of the excess funds which
are to transferred to the respective parties.
Referring to Figure 9 there is shown tables 1000, 1100, 1200 representing examples of various financial transactions in the form of stock market transactions which have been controlled using the method and system described herein. In particular, each table 1000, 1100, 1200 represents a funds pool, wherein each funds pool is configured to receive a particular classification of funds contributions.
Funds pool 1000 is classified to receive funds contribution for transactions which are greater than one million dollars and the company whose stock is being sold in the transaction has a market capitalisation of between thirty million dollars and three hundred million dollars. Similarly, funds pool 1100 is classified to receive funds contribution for transactions which are greater than ten million dollars and the company whose stock is being sold in the transaction has a market capitalisation of between three hundred million dollars and three billion dollars. Similarly, funds pool 1200 is classified to receive funds contribution for transactions which are greater than one hundred million dollars and the company whose stock is being sold in the transaction has a market capitalisation of greater than three billion dollars.
Referring specifically to transaction 1001 of funds pool 1000, it is apparent that $1,150,000 was the purchase funds for the financial transaction of stock "Salinas". In this particular example, the contribution rule is a percentage based upon the purchase funds, that being 2.5% of the purchase funds which both the purchaser and seller must contribute to the funds pool. As such, as would be apparent to people skilled in the art, each party contributes $28,750 to the funds pool, such that the funds pool receives a total contribution of $57,500 for transaction 1001.
In this particular example, the funds pool 1000 is configured such that a distribution condition is satisfied when ten contributions of funds have been received from ten financial transactions of stock. In this example, the distribution rule is configured to determine the average contribution of funds for the funds pool and distribute 90% of the accumulated funds to the first and second parties for the contribution of funds which was closest to the
average funds contribution. In this example, the average contribution of funds for funds pool 1000 is $63,750. The parties which contributed the closest to the average contribution of funds are "Ferguson - Anderson" 1002 which contributed $66,000. In this example, Ferguson would receive $286,875 (ie. 45% of the accumulated funds) and Anderson would receive $286,875 (ie. 45% of the accumulated funds). A monitoring party which controls the implementation of the method and system receives the remaining 10% of the accumulated funds for the funds pool 1000.
This implementation described for funds pool 1000 equally applies for funds pools 1100 and 1200.
Although the present invention has been described in terms of the presently preferred embodiments, it is to be understood that the disclosure is not to be interpreted as limiting. Various alterations and modifications will no doubt become apparent to those skilled in the art after having read the above disclosure. AU such alterations and modifications should be considered within the spirit and scope of the invention as broadly herein before described.
Optional embodiments of the present invention may also be said to broadly consist in the parts, elements and features referred to or indicated herein, individually or collectively, in any or all combinations of two or more of the parts, elements or features, and wherein specific integers are mentioned herein which have known equivalents in the art to which the invention relates, such known equivalents are deemed to be incorporated herein as if individually set forth.
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