A method of exchanging an obligation between parties where the exchange is administered
by a supervisory institution that ensures real-time settling of obligations between
parties by updating shadow records in real-time and instructing one or more exchange
institutions to effect, from time to time, the exchange of obligations in accounts
maintained external to the supervisory institution. Updates to the exchange institution
accounts may reflect the net obligations of parties over a nominated period of
time. The role of the supervisory institution is to ensure that obligations are
only settled where parties have sufficient balance in their shadow records to complete
the transaction. Obligations that can be exchanged include, but are not limited
to: shares in financial or physical assets, participation rights in wagers, national
or synthetic currencies, exchange settlement account deposits, taxation account
deposits, and deposits of financial instruments or precious metals.
