Automated Cash Leveraging Facility to Provide Available Cash from Sweep Investments for Margin Financing

摘要

A computer-implemented trade and order management system that enables cash movement for providing margin financing to customers in brokerage accounts utilizing sweep vehicles on a cost-effective and efficient basis to provide expanded access to capital for brokerages. The computer-implemented method issues sells and buys of the cash sweep vehicles on a daily basis to generate cash and free credits in customer accounts or to reduce free credits and add to the sweep vehicle position in the accounts. The goal is to match the amount in the aggregate across all accounts of free credits with the aggregate of customer debits so as to result in a net zero free credit to customer debit position for the brokerage. This method involves a daily calculation across all pertinent accounts.

主权项

1. A computer implemented method for managing cash in a brokerage comprising:
storing information regarding a plurality of investor accounts in a database; providing a daily cash sweep mechanism for the brokerage's investor accounts, where cash is moved on a daily basis as needed from, or to, one or more selected investor accounts of the plurality of investor accounts to deposit or raise cash with respect to one or more selected investor accounts as necessary on a daily basis, thereby creating for each day one or more selected investor accounts with cash invested in or being removed from the cash sweep mechanism (a “regular sweep program”); and on a given day, aggregating by computer the amount of the buys and sells into the regular sweep program based on the ordinary non-margin, non-borrowing activity of the one or more investors where such buys and sells are due to settlement of purchases or sales of securities, receipt of cash dividends, withdrawals from the brokerage, or other usual investor activity (the “net regular sweep amount”); and on a given day, aggregating by computer the amount of the cash either required for settlement for, or being recovered from margin balances for the benefit of, the margin investor accounts of the plurality of investor accounts requiring (increasing) or decreasing their margin financing, determining by a computer an aggregate amount of net margin financing (the amount required due to increases in margin less the amount being recovered from decreases in margin balances) required by the brokerage for the given day for the one or more margin investor accounts (the “net margin sweep amount”); and deducting the aggregate net margin sweep amount from the net regular sweep amount (the “net total result”), wherein: if the net total result is positive, then purchasing an amount of the sweep mechanism equal to the net total result and placing an amount of free credits equal to the net margin sweep amount in the one or more selected investors' accounts based on said allocating; and if the net total result is negative, then selling an amount of the sweep mechanism equal to the absolute value of the net total result and placing an amount of free credits equal to the net margin sweep amount in the one or more selected investors' accounts based on said allocating; and using the aggregate amount of cash as margin financing for the one or more margin investor accounts.