Patent Publication Number: US-8112344-B2

Title: Participation systems and methods

Description:
CROSS-REFERENCE TO RELATED APPLICATIONS 
     This application is a continuation application of U.S. application Ser. No. 12/051,897, filed Mar. 20, 2008 and titled “Participation Systems and Methods,” which claims the benefit of U.S. Provisional Application No. 60/896,652, filed Mar. 23, 2007, and titled “Modern Participation Models,” the contents of which are incorporated herein by reference in its entirety. 
    
    
     BACKGROUND 
     This invention relates to participation systems and methods. 
     Entities can desire to raise capital for various purposes such as financing a new operation, financing specific activities, and/or financing purchase of a set of assets. The company seeking to raise capital can raise the capital in a variety of ways. 
     One way in which companies can raise capital is by issuing equity securities (e.g., stock). A share of stock in a company represents a claim on a proportional share of the company&#39;s value which is reflected in the price of the stock. Equity represents an ownership share of the issuer. As such, the value of the stock reflects the assets, the expected operating results, and the perceived risks of the entire entity as a whole. 
     Companies can also raise capital by taking on debt rather than selling ownership, for example, by borrowing money from banks and other lending institutions or by issuing bonds. A bond does not represent a partial ownership in the issuing company; the bond represents an absolute legal commitment by the company to pay the bondholder in a pre-specified manner. The price of a bond will reflect both the creditworthiness of the issuer as well as the “market risk” relevant to the issuance. 
     SUMMARY 
     In general, in one aspect, the invention features a computer-implemented method for establishing a contractual relationship between two parties based on a segregated contract participation unit, in which the method includes offering to a set of potential investors, on an electronic exchange, a segregated contract participation unit to purchase an economic participatory interest associated with a specific aspect of an issuer operation, and upon purchase of the segregated contract participation unit by a specific investor of the set of potential investors, establishing a contractual relationship between the issuer and the specific investor that binds the issuer to execute a set of obligations according to terms specified in the segregated contract participation unit. 
     Embodiments of the invention may include one or more of the following features. 
     The set of potential investors may include one of an open set of potential investors, a restricted set of potential investors, or a specific set of potential investors. 
     The specific aspect of the issuer operation may include at least one of an activity, asset, or project related to a product or service of the issuer. 
     The specific aspect of the issuer operation may include at least one of an activity, asset of project related to an operation of the issuer in a particular location. 
     The computer-implemented method of offering the segregated contract participation unit may include offering the segregated contract participation unit for a specified amount of money. 
     The computer-implemented method of offering the segregated contract participation unit may include offering the segregated contract participation unit in exchange for a product or component provided by the purchaser. 
     The computer-implemented method of offering the segregated contract participation unit may include offering the segregated contract participation unit in full or partial exchange for a service provided by the purchaser. 
     In general, in another aspect, the invention features a computer-implemented method for managing the generation and sale of segregated contract participation units, in which the method includes receiving a qualified operating agreement from an issuer, the qualified operating agreement specifying an economic participatory interest associated with a specific aspect of an issuer operation and forming the basis for a segregated contract participation unit offered to purchasers, validating the qualified operating agreement, registering the qualified operating agreement on an economic participation market, and providing the segregated contract participation unit based on the qualified operating agreement, wherein the segregated contract participation unit establishes a contractual relationship between the issuer and a purchaser of the segregated contract participation unit. 
     Embodiments of the invention may include one or more of the following features. 
     The qualified operating agreement may include information about an activity basis for the segregated contract participation units, and logic for calculating the proceeds payable for each segregated contract participation unit. 
     The qualified operating agreement may include information about a set of investors eligible to purchase the segregated contract participation units. 
     The qualified operating agreement may include information about disclosure requirements. 
     The qualified operating agreement may include information about amendment rules. 
     The computer-implemented method of validating the qualified operating agreement may include determining whether the qualified operating agreement includes required information. 
     The computer-implemented method of validating the qualified operating agreement may include determining if the qualified operating agreement is correctly structured. 
     The computer-implemented method may further include recording information about a purchaser of the segregated contract participation unit in a database. 
     The computer-implemented method may further include distributing proceeds of the segregated contract participation unit to the holder. 
     In general, in another aspect, the invention features a computer-implemented method of trading segregated contract participation units that includes accessing, using a computer system, information including one or more of a performance metric and external data related to an activity basis for the segregated contract participation unit, wherein the segregated contract participation unit establishes a contractual relationship between a holder of the segregated contract participation unit and an issuer of the segregated contract participation unit and the activity basis provides an economic foundation for the proceeds payable for the segregated contract participation unit, and trading the segregated contract participation unit on a trading venue by buyers and holders determining a price between the buyer and the seller for the segregated contract participation unit taking into account the information including the one or more of a performance metric and external data. 
     Embodiments of the invention may include one or more of the following features. 
     The computer-implemented method may further include receiving information from the issuer of the segregated contract participation unit about the performance metric. 
     The computer-implemented method may further include recording an executed trade in a computer database. 
     The computer-implemented method may further include severing a contractual relationship between the seller and the issuer of the segregated contract participation unit subsequent to execution of a trade, and establishing a contractual relationship between the buyer and the issuer of the segregated contract participation unit subsequent to execution of a trade. 
     The computer-implemented method may further include restricting a set of buyers of the segregated contract participation unit to a limited class of investors. 
     The computer-implemented method may further include distributing proceeds from the segregated contract participation unit to a holder of the segregated contract participation unit based on a distribution calculation included in a qualified operating agreement associated with the segregated contract participation unit. 
     Other general aspects include other combinations of the aspects and features described above and other aspects and features expressed as methods, apparatus, systems, computer program products, and in other ways 
     In some embodiments, the economic participation market, qualified operating agreements, and segregated contract participation units issued by an issuer and offered on the economic participation market can create mechanism and marketplace for both private and public companies to raise capital. This method of raising capital allows the capital to be raised according to the specific terms of a contractual participation agreement and available to a universe of participants that is unlimited in its potential size and diversity. Exemplary participants include trading partners, other operating entities, financial investors, and/or speculators. 
     The economic participation market can provide the advantage of widening the spectrum of alternatives that companies have for raising funds and that investors have for participating in risks and rewards associated with specific economic activities. The financial contracts created and traded on the economic participation market can also provide the advantage of efficiency. It is believed that the segregated contract participation units can be more economically efficient than existing financing methods such as debt and equity stock because their risk, and therefore their pricing, is a function of specific and focused sets of variables. 
     Other features and advantages of the invention are apparent from the following description, and from the claims. 
    
    
     
       DESCRIPTION OF DRAWINGS 
         FIG. 1  is a block diagram of a computer system. 
         FIG. 2  is a block diagram of an issuer, an economic participation market, and investors. 
         FIG. 3  is a flow chart of a segregated contract participation unit (CPU) generation and management process. 
         FIG. 4  is a flow chart of a qualified operating agreement (QOA) generation process. 
         FIG. 5  is a block diagram of QOA authoring activities. 
         FIG. 6  is a flow chart of a QOA approval process. 
         FIG. 7  is a flow chart of a QOA registration process. 
         FIG. 8  is a flow chart of a CPU agreement generation process. 
         FIG. 9  is a flow chart of a CPU registration process. 
         FIG. 10A  is a diagram of a primary market. 
         FIG. 10B  is a diagram of a secondary market. 
         FIG. 11  is a flow chart of an amendment process. 
         FIG. 12  is a flow chart of an amendment process. 
         FIG. 13  is a flow chart of a withdraw process. 
         FIG. 14  is a diagram of a process involving non-monetary based CPUs. 
         FIG. 15  is a diagram of a process involving non-monetary based CPUs. 
         FIG. 16  is a block diagram of a computer system. 
     
    
    
     DESCRIPTION 
     Referring to  FIG. 1 , a computer system  10  includes software to assist with creation and issuance  12   a , administration  12   b , redemption  12   c , and trading  12   d  of segregated contract participation units. Although a single computer system  10  is shown, typically many such systems can be used and indeed each of the software processes can be performed on different computers, controlled by or managed by different entities that are involved in any of the aspects of the segregated contract participation units 
     1 The Economic Participation Market 
     Referring to  FIG. 2 , an economic participation market  26  is used to facilitate the creation, issuance, and administration of segregated contract participation units  24 . Segregated contract participation units  24  form a contractual relationship between an entity (referred to herein as issuer  20 ) that issues the segregated contract participation unit  24  and investors in the segregated contract participation units (referred to herein as investors  28 ) that purchase the segregated contract participation units  24 . The formation of this contractual relationship is facilitated by the economic participation market  26 . The economic participation market  26  provides central processing engines and communication links between the multiple different participants involved in the generation, sale, and redemption of the segregated contract participation units  24 . 
     The economic participation market  26  provides a market in which corporate entities (e.g., issuer  20 ) can offer to sell and sell economic participation in specific aspects of an issuer operation to a universe of investors and partners (e.g., investor  28 ). Examples of aspects of an issuer operation include activities, assets, and/or projects, associated with the issuer  20 . The universe of investors and partners can be specified by the issuer  20  and therefore, is not restricted in its potential size and diversity. For example, the issuer  20  could specify that the universe of potential buyers is not restricted and thereby allow any investor to purchase the CPUs. On the other hand, the issuer could place one or more restrictions on who is eligible to purchase the CPUs. As such, the set of investors to which the CPUs are sold can be an open set of investors, a restricted set of investors, and/or a specific set of investors. 
     An Issuer  20  sells participation in a given aspect of an issuer operation by issuing a set of contractual participation units  24  whose legal and economic rights are tied to a set of the underlying activities, assets and/or projects and are specified in a qualified operating agreement, (QOA)  22 . The economic participation market  26  facilitates the issuance of the contractual participation units  24  by the investor as described herein. Investors  28  acquire economic participation in the aspect of an issuer operation by purchasing CPUs  24 . The investors  28  can purchase the CPUs  24  from either the Issuer  20  or other holders of CPUs  24  such as distributors, broker/dealers, or individual holders selling part or whole of their position. The purchase of a CPU  24  forms a contractual relationship between the issuer  20  and the investor  28 . 
     In general, the economic participation market  26  provides a market in which the issuers  20  can sell segregated contract participation units  24  to investors  28  (e.g., one in which any registered issuer  20  can sell to any investor  28 ). The set of investors who can purchase a particular CPU from the issuer can be open, restricted, or specific. For example, an issuer  20  can restrict the size, the type and even the identity of those to which its CPUs  24  will be offered. Restrictions such as these can be specified in the QOA  22 . 
     In addition, the issuer  20  can issue CPUs  24  on any basis (e.g., in contrast to stock where the full valuation of the stock is based on the valuation of some corporate entity or subsidiary thereof). In the economic participation market  26  the basis of a CPU  24  can be any endeavor, activity, project or set of assets that the issuer  20  defines in a QOA  22 . As such, the economic participation market  26  facilitates a market in which an issuer  20  can sell participation in any aspect of its operation the issuer  20  desires on a market that is as open or as restricted as the issuer  20  wants it to be. 
     Referring to  FIG. 3 , a process  50  for managing the formation, administration, and settlement of contracts established based on the segregated contract participation units  24  in the economic participation market  26 , each of which will be discussed in more detail to follow. Prior to participating on the economic participation market  26  (e.g., selling segregated contract participation units, purchasing segregated contract participation units, or performing other functions associated with the economic participation market), the economic participation market  26  registers the individual or entity ( 52 ). After being registered an issuer  20  can generate and submit QOAs to the economic participation market  26 . The economic participation market  26  processes the received qualified operating agreements ( 54 ). The issuer  20  also generates and submits CPU agreements to the economic participation market  26  based on a QOA  22  that has been previously processed. The CPU agreement specifies the terms of a CPU issued based on such CPU agreement. The economic participation market  26  processes the received CPUs ( 55 ) and allows the issuer to issue segregated contract participation units  24  based on the processed CPU agreement ( 56 ). After the issuer  20  (through the economic participation market  26 ) issues the segregated contract participation units  24 , the economic participation market  26  manages the segregated contract participation units  24  ( 58 ) and subject to the terms of the qualified operating agreement  22  and the segregated contract participation units  24  collects and distributes proceeds of the segregated contract participation units  24  to the investors  28  ( 60 ). 
     2 Registration 
     The economic participation market  26  includes a mechanism enabling electronic registration of individuals and entities associated with the economic participation market  26 . In general, individuals and entities that transact and/or interact with the economic participation market  26  are registered before engaging in the relevant workflow processes. The economic participation market  26  can require different information depending on participant type. At a minimum, the economic participation market  26  receives a basic set of identity and contact information for the person or entity during the registration process. However, for certain types of market participants, it can be required or beneficial to receive additional information. 
     For participant types that represent entities with multiple people, a single representative could perform the electronic registration. If necessary or desired, this representative specifies that multiple user accounts should be created, optionally assigning different permissions to the multiple accounts. In addition to the electronic registration, in some embodiments the economic participation market  26  manually interacts with authorized agents to verify identity, obtain notarized signature of legal documents, etc. 
     Based on the registration process, the economic participation market  26  generates and stores a data record for the participant. The data record can be stored in a database linked to the appropriate data that will be created and processed in the system moving forward—primarily QOAs, CPUs and Disclosure Filings. The economic participation market  26  can assign a set of permissions to an account associated with a participant type. The permissions can allow a particular individual or entity to perform a limited set of tasks on the economic participation market  26 . For example, an issuer  20  could have permissions to generate a qualified operating agreement, but not have permission to approve the qualified operating agreement. 
     3 Processing of Qualified Operating Agreements 
     As described above in relation to  FIG. 3 , the economic participation market  26  processes qualified operating agreements and segregated contract participation unit agreements prior to enabling the issuer to issue segregated contract participation units based on the QOAs and CPU agreements. Any company that desires to issue segregated contract participation units in some aspect of an issuer operation authors a QOA and CPU agreements and has them approved by the appropriate review authorities and legal agencies. The economic participation market  26  mandates such a review because once the CPUs are issued, the QOA  22  becomes the binding legal contract between Issuers  20  and investors  28 . By completing the QOA  22  and issuing CPUs  24 , the issuer  20  legally binds itself to execute a set of obligations in the exact way it specifies in the QOA  22 . Investors  28  who have purchased CPUs  24  either directly from an Issuer  20 , or indirectly through the secondary market, can refer to the QOA  22  as a binding agreement in the event that they wish to make any claim of breach of contract against the Issuer  20 . 
     The Economic participation market  26  provides the network in which QOAs  22  are registered and made available for review by a potential investor  28 . Various participants in the economic participation market  26  are involved in the related workflow processes. 
     
       
         
           
               
               
             
               
                   
               
             
            
               
                 Issuers 
                 An Issuer is an entity, either privately or 
               
               
                   
                 publicly held, that sells CPUs in the 
               
               
                   
                 economic participation market. A single 
               
               
                   
                 Issuer can sell multiple sets of CPUs and 
               
               
                   
                 author multiple QOAs. 
               
               
                 Investor in segregated 
                 An Investor in a segregated contract 
               
               
                 contract participation units 
                 participation unit is an individual or entity 
               
               
                   
                 that purchases CPUs in the EPM, either in 
               
               
                   
                 the primary market as part of a CPU 
               
               
                   
                 issuance, or in the secondary market. CPUs 
               
               
                   
                 can be bought directly over the EPM or 
               
               
                   
                 through a distributor or a Broker/Dealer. 
               
               
                 CPU Broker/Dealers 
                 A CPU Dealer is a person or entity who 
               
               
                   
                 buys and/or sells CPUs in the EPM for his 
               
               
                   
                 own account. A CPU Broker is an agent 
               
               
                   
                 who executes orders for CPUs in the EPM 
               
               
                   
                 on behalf of CPU Dealers and Investor in 
               
               
                   
                 segregated contract participation units. A 
               
               
                   
                 CPU Broker/Dealer is simply an entity who 
               
               
                   
                 acts in both capacities. 
               
               
                 Review Authorities 
                 A Review Authority is an entity 
               
               
                   
                 responsible for confirming that the 
               
               
                   
                 structure and content and disclosures of 
               
               
                   
                 QOAs meet the requirements set forth by 
               
               
                   
                 the EPM, before such QOAs are 
               
               
                   
                 disseminated in the market. 
               
               
                 Legal Services Providers 
                 A legal service provider is an entity that 
               
               
                   
                 provides a legal service. The legal services 
               
               
                   
                 providers can include entities specializing 
               
               
                   
                 in contract law, as QOAs represent 
               
               
                   
                 contracts between Issuers and Investors in 
               
               
                   
                 the segregated contract participation units. 
               
               
                 Information Providers 
                 An Information Provider is an external 
               
               
                   
                 entity that provides market data and/or 
               
               
                   
                 statistical information that Issuers use, in 
               
               
                   
                 conjunction with internal performance 
               
               
                   
                 information, to calculate the required 
               
               
                   
                 distribution of proceeds to Complex CPU 
               
               
                   
                 Investors as well as general performance 
               
               
                   
                 metrics of the activity basis of a set of 
               
               
                   
                 Complex CPUs. Reuters and Bloomberg 
               
               
                   
                 are examples of Information Providers. 
               
               
                 Participation Market 
                 Participation Market Analysts are entities 
               
               
                 Analysts 
                 that provide analyses and opinions related 
               
               
                   
                 to the future performance and pricing of 
               
               
                   
                 CPUs, both before and after issuance. The 
               
               
                   
                 consumers of this information include 
               
               
                   
                 Investor in segregated contract 
               
               
                   
                 participation units and potential Investor in 
               
               
                   
                 segregated contract participation units as 
               
               
                   
                 well as Issuers and other service providers 
               
               
                   
                 in the EPM. Participation Market Analysts 
               
               
                   
                 can use mechanisms in the economic 
               
               
                   
                 participation market for disseminating this 
               
               
                   
                 information to consumers. 
               
               
                 Distributor of CPUs 
                 A CPUs Distributor is an entity that 
               
               
                   
                 provides distribution services for newly 
               
               
                   
                 issued CPUs by purchasing them from 
               
               
                   
                 Issuers and selling them to Investor. 
               
               
                 CPU Transfer Agents 
                 An Issuer can employ a CPU Transfer 
               
               
                   
                 Agent to act as a registrar for its CPUs, 
               
               
                   
                 keeping track of the individuals and entities 
               
               
                   
                 that currently own them and 
               
               
                   
                 communicating this information to Issuers. 
               
               
                   
                 CPU Transfer Agents issue electronic 
               
               
                   
                 certificates of ownership to investors. 
               
               
                   
                 Additionally, a CPU Transfer Agent can 
               
               
                   
                 serve as an Issuer&#39;s paying agent to 
               
               
                   
                 distribute proceeds to Investors. 
               
               
                 Micro-Accounting Services 
                 Micro-Accounting Services collect 
               
               
                   
                 business transaction information from 
               
               
                   
                 Issuers electronically over the economic 
               
               
                   
                 participation market, aggregate, analyze 
               
               
                   
                 and organize this information and publish it 
               
               
                   
                 to investors and other relevant parties 
               
               
                   
                 electronically. These processes are 
               
               
                   
                 completed in real-time or with a pre-set 
               
               
                   
                 frequency, giving Investors a transparent 
               
               
                   
                 view of the performance of their CPUs. 
               
               
                 Payment and Escrow 
                 Payment and Escrow Services process 
               
               
                 Services 
                 credit card, direct debit and various types 
               
               
                   
                 of online banking payments electronically 
               
               
                   
                 over the economic participation market. 
               
               
                   
                 They are used primarily to accept payments 
               
               
                   
                 from Investors and transfer funds to 
               
               
                   
                 Issuers, CPU Distributors and CPU 
               
               
                   
                 Broker/Dealers upon meeting terms and 
               
               
                   
                 conditions spelled out in the QOA and 
               
               
                   
                 CPU agreements. 
               
               
                   
               
            
           
         
       
     
     As shown in  FIG. 4 , a process  70  for processing the qualified operating agreements  22  prior to the issuer  20  issuing segregated contract participation units  24  includes authoring the qualified operating agreement ( 72 ), validating the qualified operating agreement ( 74 ), and registering the qualified operating agreement ( 76 ), each of which will be discussed in more detail herein. 
     Authoring the qualified operating agreement ( 72 ) is completed by the Issuer  20  with the possible help of other entities associated with the economic participation market  26  such as CPU Distributors and Legal Services. For example, CPU Distributors can be employed or engaged by the Issuer  20  to sell the CPUs  24  to investors  28 , and to aid in the authorship of the QOA  22  by helping the Issuer  20  construct a calculation methodology that will be used to measure the performance of the activities on which the issuer  20  desires to sell participation. Since the QOA  22  is a contract, legal services providers can be used to help draft the terms of the contract in a manner that protects both the issuer  20  and potential investors  28 . Legal services providers can also help to draft the contract in a form suitable to relevant review authorities associated with the economic participation market  26 , who are responsible for validating the QOA  22  before it is registered in the economic participation market  26 . 
     In general, there are no limits placed on the universe of activities on which companies can base a QOA and sell participation. For example, a company could sell participation in the performance of a particular branch, a particular region, a particular product, or a particular period of time. The performance can be measured in terms of revenues, profit, grows, or any other measurement clearly defined in the qualified operating agreement  22 . However, while the subject matter of the activities on which companies can sell participation is not limited, the economic participation market  26  does provide a pre-defined structure under which the contracts are formed. For example, a sale of participation, which is defined in a QOA  22 , includes a specific well defined set of information and/or include a specific set of sections. The set of information or sections can be pre-defined to allow the issuers  20  and investors  28  to clearly determine the content of the contract and their rights and responsibilities pursuant to the contract. 
     In order to generate a QOA  22 , an issuer  20  provides various types of information that form the information and sections of the QOA  22 .  FIG. 5  shows exemplary actions that the issuer  20  takes to generate the QOA  22 , such actions can occur in any order. Activities performed in defining the QOA  22  can include one or more of defining an activity basis ( 80 ), defining the investor universe ( 82 ), defining disclosure procedures and methods ( 84 ), defining rules for amending the QOA ( 86 ), and defining CPU logic ( 88 ). These actions (e.g., actions  80 ,  82 ,  84 ,  86 , and  88 ) can include one or more sub-actions. For example, defining the CPU logic ( 88 ) can include sub-actions such as defining calculation methodology ( 90 ), defining distribution of proceeds ( 92 ), defining participation holder rights ( 94 ), defining market and statistical data ( 96 ), defining options provisions ( 98 ), and defining conditions and calculations for payments and other obligations ( 100 ). 
     4 Activity Basis 
     As described above, one activity involved in generating the QOA  22  is to define the activity basis for the QOA  22 . An activity basis relates to the aspect of an issuer operation for which the issuer  20  is selling participation. The issuer  20  can sell participation in a wide range of different types of activities, projects and/or assets provided that the issuer  20  defines the details of the relevant activities or assets and delineates the accounting procedures and parameters that will be used to measure performance. The following examples illustrate what is meant here, however, other examples are possible. 
     For example, a retail company that is set to begin operations in China may wish to sell participation in the China operations. For example, the company could initially plan to open stores in Shanghai but also plan possible expansion into Beijing and other cities. The company could sell participation based on various aspects of this new endeavor. In the section of the QOA  22  in which it defines the Activity Basis, the company (serving as the issuer  20  of participation units) will specify exactly the part of its operations for which it is selling participation. For example, the activity basis would indicate whether the participation include possible future operations in Beijing and other cities, or be limited to only the initial stores in Shanghai. The issuer  20  also defines the accounting procedures and factors that define the economic basis for which it is offering participation—e.g. revenues, gross margins, percentage of gross profits, etc. 
     In another example, a privately owned Internet company with an advertising-based revenue model may desire to sell participation in its user base. For example, the company (serving as the issuer  20  of participation units) could desire to have the value of the CPUs that it issues be based on to the number of registered or active users without regard to any revenues, profits, etc. that it realizes from such users. Such an activity basis would be possible by specifying in the Activity Basis section of the QOA, exactly what set of users it refers to and how it will measure the relevant statistics, for example, registered users, unique page visitors, etc. 
     In another example, a consumer products company may desire to sell participation in a new product. For example, the company could desire to have the value of the CPUs that it issues be based on the success of the product. To accomplish such an objective the activity basis could be based on revenue earned from the product. An issuer may be willing to pay a high percentage of specific revenues for a few years with little or no residual rights provided after such initial period. In another example of the use of complex CPUs, a company may commit to pay an amount calculated based on the maximum between its actual earning from a certain activity or the product of its revenues times the average profit margin in its industry. Lastly, a company facing shortage of a critical component for its production line can pay its supplier with cash plus CPUs in return for the valuable components promising a percent of the revenues generated by the end product. 
     5 Define CPU Logic 
     As described above, another activity involved in generating the QOA  22  is to define the CPU logic. The CPU logic includes an explanation of the accounting parameters that the issuer  20  will use to establish the economic foundation of the aspect of an issuer operation for which it wishes to sell participation. 
     The CPU Logic sections include the specific sets of new participation units that the company will issue based on this Activity Basis. There can be a one-to-many relationship between the other sections of the QOA  22  (e.g., the activity basis, the investor in segregated contract participation unit universe, the disclosure requirements, and the amendment rules) and the CPU Logic section because an issuer  20  can issue many types of CPUs  24  for a given activity basis. Allowing a company (e.g., the issuer  20 ) to generate different types of CPUs based on the same definitions in the other sections can provide the benefit of reducing time and effort for generating different types of CPUs  24 . The issuer  20  can issue multiple types of CPUs  24  with the initial registration of the QOA  22  and/or can issue new CPUs  24  once an initial set of CPUs  24  has already been issued. For example, if the issuer  20  finds that a CPU  24  with a particular set of terms is not selling well, the issuer  20  could issue another set of CPUs  24  with differing terms. In addition, the issuer  20  could generate different sets of CPUs  24  with differing terms to target different groups of investors. For example, an issuer  20  could offer a higher return on CPUs that are issued for a longer term or in a greater quantity. In addition, the differing CPUs  24  could provide participation with differing levels of risk. 
     For example, returning to the example of the retailer selling participation in new operations in China described above, the retailer may issue one set of CPUs related only to initial stores opened in Shanghai, and another set that will also pay proceeds based on any future operations in other cities. The Activity Basis section of the QOA can outline the accounting parameters that will be used as the basis for all stores, and each CPU Logic section will specify the stores relevant to the particular CPU  24 . This is one example of how, from a contractual and documentation perspective, the same elements of a QOA  22  can be referenced by multiple CPU Logic sections. 
     The economic participation market  26  can support multiple types of segregated contract participation units  24 . Two exemplary types of segregated contract participation units are basic contractual participation units (BCPUs) and Complex Contractual Participation Units (CCPUs). Basic contractual participation units refer to CPUs for which all performance metrics, calculations of proceeds to investors  28  are derived only from financial information and performance results internal to the issuer  20  and related to the activity basis. In contrast, Complex Contractual Participation Units are CPUs that use external data in addition to financial information and performance results internal to the issuer  20  and related to the activity basis in any related calculations. For example, in a CCPU, a company can include foreign exchange rates in the calculation of distribution of proceeds to investors  28  as well as internal accounting metrics associated with the Activity Basis. External data employed by CCPUs includes data available either publicly or privately to all holders of CPUs. In another example, a company could include the performance of a competitor&#39;s stock in the calculation. 
     As described above in relation to  FIG. 5 , the action of defining the CPU logic ( 88 ) can include sub-actions such as defining calculation methodology ( 90 ), defining distribution of proceeds ( 92 ), defining participation holder rights ( 94 ), defining market and statistical data ( 96 ), defining options provisions ( 98 ), and defining conditions or calculations for payments and other obligations ( 100 ), each of these exemplary sub-actions will be described below. 
     In defining the CPU logic, the Issuer  20  defines a calculation methodology. The calculation methodology specifies which accounting metrics will be used to calculate any proceeds paid out to investors  28 . Such metrics will be used by buyers, sellers, analysts and distributors. Each participant will use its own modeling of risk and value. This section can reference the pieces of the QOA&#39;s Activity Basis definition that are relevant to this specific offering of CPUs. 
     In defining the CPU logic, the issuer  20  defines the distribution of proceeds. Defining the distribution of proceeds includes defining the methodology and frequency of any distribution of income, interest, dividends and/or any other proceeds that it will pay to investors  28  holding the CPUs  24 . The issuer  20  also specifies the manner by which such proceeds will be paid; the economic participation market  26  will not necessarily act as the actual channel for distribution, but it will offer data processing services and provide technical communication interfaces to participating Electronic Payment Services. 
     In defining the CPU logic, the issuer  20  defines the rights of the participation holder. Exemplary rights of the participation holder include whether either the Issuer  20  and/or the investor  28  will have any option to redeem, convert exchange or trade any rights or obligation vested in a segregated contract participation unit. If such options are present, the terms of such options should be defined. 
     In defining the CPU logic, the Issuer  20  defines Market and Statistical Data that will be used in the calculation of the CPU. For example, if CCPUs are being issued, the issuer  20  specifies the details of the market and/or statistical data it will use to calculate performance metrics and distribution of proceeds. For example, the issuer  20  can specify that it will use the end-of-day mid-market foreign exchange rates as supplied by Reuters or various indexes published by the government, Dow Jones, etc. 
     In defining the CPU logic, the issuer  20  defines any options provisions. For example, the issuer  20  can add provisions for call or put options on the CPUs  24  being issued to protect itself or the investors. Such options can affect the attractiveness of the segregated contract participation units and their pricing. 
     In defining the CPU logic, the issuer  20  defines conditions for payments and other obligations of the participation holder  28 . For example, the issuer  20  can define a payment schedule or accepted methods of payment. The issuer may give the CPU holder other rights such as first refusal on buying additional CPUs to be issued in the future, discounted prices on buying certain products or services from the issuer etc. 
     6 Defining the Eligible Investors 
     In defining the CPU logic, the Issuer  20  also defines the set of individuals or entities that are eligible to be investors in segregated contract participation units (also referred to as the buyer universe). If a person is included in the set of individuals or entities that are eligible to be investors in segregated contract participation units the economic participation market  26  grants access to the QOA  22  to such individual or entity. For example, the issuer  20  can define the individuals or entities that are eligible to be investors  28  to be an unrestricted investor pool such that the QOA  22  will be available for reading and purchase by anyone who has registered in the EPM as an investor  28 . On the other hand, issuers  20  can restrict this universe to smaller groups of investors  28  as it sees fit, and different restrictions can apply to different CPU sections within one QOA  22 . In some cases the Issuer can retain the right to individually approve each potential investor. 
     7 Defining the Disclosure Procedures, Timing and Methods 
     In defining the CPU logic, the issuer  20  defines procedures, timing and methods for disclosures. For example, the issuer  20  can define when and how it will disseminate information related to the economic performance or measurement of the activity basis, as defined in the activity basis definition of the QOA  22 . Based on the logic defined in the QOA  22 , the economic participation market  26  provides dissemination facilities that allow issuers  20  to file such information and have it securely broadcasted to the relevant public or private audience over the network. No general mandates are made regarding the exact filings that Issuers  20  must produce, with the specific requirements set by the issuer and accepted by a particular Review Authority or Agencies that will review the issuer QOA  22 . However, in some embodiments, Issuers  20  may be required to clearly define what and when they commit to disclose in this section of the QOA  22 . It is expected that Issuers will undertake frequent disclosures and in some cases will disclose information on a weekly, daily or even real time basis. 
     8 Defining the Amendment Rules 
     In defining the CPU logic, the Issuer  20  also defines rules for amending the QOA  22  after CPUs  24  are issued based on the QOA  22 . The amendments to the QOA  22  can be restricted to amendments by the issuer  20 , amendments by the investors, or both. In addition, the issuer  20  could define the amendment rules to prohibit any post-issuance amendments to the QOA  22 . If either the Issuer  20  or the investors  28  are allowed to change one or more of the terms of the QOA  22  and/or rights of Investors  28  the rules for such changes are specified in the amendment rules. Such rules can include such provisions as: percentage of unit holders that must ratify any such change, procedures for voting on a proposed change, percentage of holders that are allowed to initiate a request for a change process (e.g., as described in more detail below). 
     9 QOA Validation and Approval 
     Referring back to  FIG. 4 , subsequent to the issuer authoring the QOA ( 72 ) and prior to the economic participation market  26  accepting newly issued segregated contract participation units  24  based on the QOA  22 ( 76 ), the economic participation market  26  manages a process for validating the QOA  22 ( 74 ). More particularly, before an Issuer  20  can officially register a QOA  22  in the economic participation market  26 , the QOA must be validated by a review authority associated with the economic participation market  26 . The review authority can be regulated or unregulated. The review authority reviews the QOA  22  and confirms that the QOA  22  is correctly structured and written before the QOA is officially registered and disseminated n the economic participation market  26 . 
       FIG. 6  shows and exemplary a process  110  for validation and approval of the QOA  22 . The economic participation market  26  receives a draft QOA  22  from the issuer  20  ( 112 ) and the review authority reviews the draft QOA ( 114 ). The review authority determines whether the QOA  22  meets standards outlined by the economic participation market  26  ( 116 ). For example, the review authority can determine if the format of the QOA  22  is correct and whether the QOA  22  adequately describes the rights and responsibilities of all parties to the contracts. If the review authority determines that the QOA  22  does not conform to the standards, the review authority returns the QOA  22  to the issuer  20  for revision ( 117 ). On the other hand, if the review authority determines that the QOA  22  does conform to the standards, the economic participation market  26  allows the QOA  22  to proceed to the registration process ( 118 ). 
     10 Registration of the QOA 
     Referring back to  FIG. 4 , subsequent to the issuer  20  authoring the QOA ( 72 ) and validating the QOA ( 74 ), the economic participation market  26  registers the QOA  22  on the economic participation market  26  ( 76 ). 
       FIG. 7  shows a process  120  for registering a QOA  22 . Upon receipt of a QOA document ( 122 ), a register QOA workflow process within the economic participation market  26  determines whether the QOA  22  has been validated by the review authority ( 124 ). If the QOA  22  has not been validated, the economic participation market  26  does not register the QOA and communicates any errors back to the issuer  20 . On the other hand, if the economic participation market  26  confirms that the QOA  22  is marked as having been validated by the Review Authority, the Register QOA workflow changes the QOA&#39;s status to “registered” ( 128 ) and communicates the status change to the Issuer  20  ( 130 ). Once a QOA  22  has a status of registered, the CPUs  24  defined therein are in a status of “registered—awaiting issuance”. Once the QOAs  22  and the segregated contract participation unit agreements have a registered status, the economic participation market  26  allows issuance of new CPUs  24  by the issuer  20  based on the QOA  22 ( 132 ). 
     11 Approval, Registration, and Validation of Segregated Contract Participation Units Based on a QOA 
     For each type of segregated contract participation unit that the issuer  20  desires to issue based on a qualified operating agreement, the issuer  20  generates and validates a segregated contract participation unit agreement for the segregated contract participation units to be issued. More particularly, before an Issuer  20  can officially register CPUs in the economic participation market  26 , in addition to the QOA, a segregated contract participation unit agreement is also validated by a review authority. The approval and review of a CPU agreement can be either part of or separate from the approval and review of the QOA because multiple different CPUs can be generated based on a single QOA. 
       FIG. 8  shows and exemplary a process  134  for validation and approval of the segregated contract participation unit agreement. An issuer  20  authors the segregated contract participation unit agreement based on a QOA  22  ( 135 ) and prior to the economic participation market  26  accepting newly issued segregated contract participation units  24  based on the segregated contract participation unit agreement ( 137 ), the economic participation market  26  manages a process for validating the segregated contract participation unit agreement ( 136 ). More particularly, before an Issuer  20  can officially register the segregated contract participation unit agreement and issue segregated contract participation units based on the segregated contract participation unit agreement and associated QOA, the segregated contract participation unit agreement is validated by the review authority. The review authority reviews the segregated contract participation unit agreement and confirms that the segregated contract participation unit agreement is correctly structured and written before it is officially registered and disseminated. 
     For example, the economic participation market  26  receives a draft segregated contract participation unit agreement from the issuer  20  and the review authority reviews the draft segregated contract participation unit agreement. The review authority determines whether the segregated contract participation unit agreement meets standards outlined by the economic participation market  26 . For example, the review authority can determine if the format of the segregated contract participation unit agreement is correct and whether the segregated contract participation unit agreement adequately describes the rights and responsibilities of all parties to the contracts. If the review authority determines that the segregated contract participation unit agreement does not conform to the standards, the review authority returns the segregated contract participation unit agreement to the issuer  20  for revision. On the other hand, if the review authority determines that the segregated contract participation unit agreement does conform to the standards, the economic participation market  26  allows the segregated contract participation unit agreement to proceed to a registration process after which the issuer  20  can issue segregated contract participation units based on the segregated contract participation unit agreement and associated QOA. 
       FIG. 9  shows a process  138  for registering a CPU agreement. Upon receipt of a CPU agreement document ( 139 ), the participation market  26  determines whether the CPU agreement document has been validated by the review authority ( 140 ). If the CPU agreement document has not been validated, the economic participation market  26  does not register the CPU agreement document and communicates any errors back to the issuer  20  ( 141 ). On the other hand, if the economic participation market  26  confirms that the CPU agreement document is marked as having been validated by the Review Authority, the status of the CPU agreement is changed to “registered” ( 142 ) and the economic participation market  26  communicates the status change to the Issuer  20  ( 143 ). Once a CPU agreement document has a status of registered, the economic participation market  26  allows issuance of new CPUs  24  by the issuer  20  based on the QOA  22  and the CPU agreement ( 144 ). 
     12 Issuance and Sale of Segregated Contract Participation Units 
     Various individuals or entities associated with the economic participation market  26  can be involved in the issuance and sale of segregated contract participation units  24 . After the economic participation market  26  registers a new QOA  22 , the issuer  20  files a new issuance of CPUs  24  in the economic participation market  26 . The economic participation market  26  can include electronic filing mechanisms to facilitate filing the issuance of the CPUs  24  by the issuer  20 . The information provided in the filing includes a reference to the relevant QOA  22  and to the specific CPU Definition therein, a specification of any CPU Distributor(s) being used and a description of the means by which the CPUs will be sold. The electronic filing mechanism provided by the economic participation market  26  validates the filing by verifying that the QOA  22  and the CPU agreement being referenced have previously been registered in the network. The details of the filing will be made available on the economic participation market  26  to users with the appropriate permissions. As described in more detail below, the issuer  20  can use the economic participation market  26  to offer the issued segregated contract participation units  24  directly to individuals and entities on a primary sale or to Distributors who will sell them to qualified buyers. 
     13 Purchase of CPUs by Investor in Segregated Contract Participation Unit in a Primary Sale 
       FIG. 10A  shows a block diagram of the sale of CPUs  24  to an investor  28 . In the primary sale, the issuer  20  sells segregated contract participation units  24  directly to the investor  28 . The sale of the segregated contract participation units  24  to the investor  28  forms a contractual relationship between the investor  28  and the issuer  20 . 
     For a direct sale, the issuer  20  may pay a commission to a representative. In addition, the issuer  20  may engage an approved CPU Transfer Agent to manage the creation of electronic certificates of ownership and transferal to investor in segregated contract participation units, and to communicate this information back to the issuers  20 . The transfer agent can continue to function in this role for the life of the CPUs  24  or until replaced by another transfer agent. The transfer agent&#39;s primary responsibility is to manage the official registry of investors who own the CPUs. The transfer agent receives notification of all trades and manage the registry of ownership for the issuer  20 . 
     In the direct market, electronic payment and escrow services can facilitate the physical transfer of money. 
     For sales of CPUs  24  on the direct market, an issuer  20  can offer a set of CPUs  24  to either an open universe of investors or to a private group that the issuer  20  specifies in the QOA  22 . In order to manage the issuance process, the economic participation market  26  can include a distribution service that accepts and manages bids for CPUs  24  submitted by potential investor in segregated contract participation units. The issuer  20  will be able to continually monitor this “order book” data which will eventually result in actual primary sales. More sophisticated auction mechanisms can also be used. 
     14 Indirect Sale of CPUs to Investors 
     In addition to selling segregated contract participation units  24  directly to investors  28  on the primary market, the issuer  20  can also sell an interest in a segregated contract participation unit  24  to an investor  28  through third parties (referred to herein as dealers or distributors).  FIG. 10B  shows a block diagram of an indirect sale of CPUs  24  to an investor  28 . The issuer  20  sells one or more segregated contract participation units to a distributor  150 . The distributor  150  subsequently re-sells the segregated contract participation units  24  to an investor in the segregated contract participation units  28 . As such, the investor  28  obtains the contact participation unit  24  from the third party (e.g., the distributor  150 ) rather than obtaining the segregated contract participation unit  24  directly from the issuer  20 . 
     In some embodiments, a Distributor can work with the Issuer  20  to determine the initial price of the CPUs  24  it agrees to purchase, and then sells them to the investor  28 . The price at which lots of the same set of CPUs are offered in an issuance can vary over time. 
     Investors  28  can use the distribution service tools on the economic participation market  26 , to purchase CPUs  24 . In some embodiments, electronic payment and escrow services along with Distributors will facilitate the physical transfer of money. 
     Both the issuer  20  and the distributors  150  can offer a set of CPUs  24  to either an open universe of investors or to a private group that is specified in the QOA  22 . 
     The Issuer  20  and/or the distributor  150  can use a basic distribution service offered on the economic participation market  26  that accepts and manages bids submitted by potential investors. The issuer  20  and/or the agent  150  will be able to continually monitor this “order book” data which will eventually result in actual sales. More sophisticated auction mechanisms will also be offered as distribution services, and can be used by Distributors for sales involving third parties. When one or more Distributors are used, they will come to an agreement with the issuer  20  regarding the manner in which they sell the CPUs  24 , including the degree to which they employ distribution services offered on the economic participation market versus using their own tools and processes. 
     15 Secondary Market Trading 
     Once an investor  28  has purchased a segregated contract participation unit  24  (either directly or indirectly), if desired, the investor  28  can re-sell the segregated contract participation unit  24  on a secondary market. Secondary Market Trading refers to the process by which the investors  28  and CPU Dealers buy and sell CPUs  24  that have already been issued. The value of the contact participation unit  24  on the secondary market is likely to fluctuate based on the performance of the underlying activiti(es) in which the segregated contract participation unit  24  offers participation. For example, if a segregated contract participation unit offers participation in a new model of car sold in North America by offering a portion of the proceeds from sales of the car and the initial sales of the car are greater than projected, then the value of the contract participation  24  is likely to increase. In contrast, if the initial sales are below expectation, the value of the segregated contract participation unit  24  is likely to decrease. In matching buy and sell orders for CPUs in the EPM only buy orders from qualified buyers (as per the QOA) are considered. The system can utilize different matching and auctioning techniques. Because of the contractual nature of the units traded, buying units implies undertaking contractual obligations towards the issuer (e.g. obligation not to disclose confidential issuer&#39;s information provided to unit holders as part of a restricted disclosure procedure. 
     16 Distribution of Proceeds 
     The distribution of proceeds refers to the process by which Issuers  20  distribute income, interest, dividends or any other proceeds to investors  28  holding CPUs  24  it has issued. 
     The Issuer  20  can distribute proceeds or it can employ a CPU Payment Agent to do so on its behalf. If a payment agent is used, the issuer  20  pays the Agent a fee. The actual distribution can occur over the economic participation market  26  via Payment and escrow services, or it can take place outside of the economic participation market  26 . Regardless of how the payment is executed, the economic participation market  26  is notified of the transfer of moneys and maintains a record of the transfer. 
     17 Amendment of Qualified Operating Agreements 
     In some situations, the issuer  20 , the investor  28 , or both may desire to make a change or amendment to the qualified operating agreement  22  after the segregated contract participation units  24  have been issued based on an amendment procedure described in the qualified operating agreement  22 . In general, when agreement is reached with regard to amendments (as described below), both general content as well as specific CPU definition sections of a QOA  22  can be amended. Such amendments can be either issuer-initiated or CPU holder-initiated. 
     Issuer-initiated amendments are amendments that the Issuer  20  wishes to make. For example, subject to rights provided to it in the QOA, the issuer  20  may desire to modify the disclosure requirements, redeem all or part of the entire issue, change the currency used in calculations or even change the economics of the CPUs within a predefined range Depending on the type of amendment and the amendment rules specified in the QOA  22 , the issuer  20  may need to get a certain percentage of votes from Investors to allow it to legally make the amendment to the QOA  22 . The exceptions to the vote requirement include amendment rights and amendment types that the issuer  20  clearly specified in the QOA  22  as not requiring a vote. For amendments requiring a vote of the investors  28 , the issuer  20  must specify in the QOA  22  the percentage of votes that it will need to execute the change. Often such rules will be written to apply to a wide class of amendments. For example, an issuer  20  can write that for any amendment that would change the calculation methods used to calculate distribution of proceeds to Investors, it must get support from 80% of Investors. The economic participation market  26  can provide services that enable voting to be managed electronically. 
       FIG. 11  shows a process  160  for managing issuer-initiated amendments to a QOA  22 . The economic participation market  26  receives an amendment request from the issuer  20  ( 162 ). Based on the type of amendment in the amendment request, the economic participation market  26  determines whether the amendment is of a type that requires a vote of the investors in order to implement the amendment ( 164 ). If the amendment is not of a type that requires a vote of the investors, the economic participation market  26  makes the amendment ( 165 ). On the other hand, if the amendment is of a type that requires a vote of the investors  28 , the economic participation market  26  determines what percentage of votes is necessary to make the amendment ( 166 ). The percentage of votes necessary is specified in the qualified operating agreement  22 . The economic participation market  26  requests and receives votes from investors  28  regarding the proposed amendment ( 168 ) and determines whether the number of votes in favor of the amendment is greater than the percentage required to implement the amendment ( 170 ). If the percentage is greater than or equal to the required percentage, the economic participation market makes the amendment ( 172 ). On the other hand, if the percentage is less than the required percentage, then the economic participation market  26  does not make the amendment and notifies both Issuer and Investors about the voting results . . . . 
     CPU holder-initiated amendments are amendments that originate with the Investors  28  of a set of CPUs. For example, an investor  28  may desire to exercise rights granted to the investors, elect an option to change performance calculations, replace the auditors (if allowed) etc Since amendments made and ratified by the investors  28  generate a legally binding obligation for the issuer  20 , the issuer  20  may limit the type of amendments that can be made by the investor  28 . For example, the issuer  20  buyer might not allow amendments to the calculation of proceeds by the investor in segregated contract participation units unless it was specifically allowed at the QOA or the CPU agreement. In addition to limitations on the type of amendments that can be made by the investors  28 , in the Amendment Rules section of the QOA, the Issuer  20  specifies both a minimum percentage of holders needed for an amendment request to be put to a vote and the required percentage of positive votes for such an amendment request to actually become a legally binding obligation for both the issuer  20  and the investors  28 . The issuer  20  can specify these for as many and as general or specific amendment types that it desires to allow. 
       FIG. 12  shows a process  180  for managing such issuer-initiated amendments. The economic participation market  26  receives an amendment request from one of the investors  28  ( 182 ). The economic participation market  26  determines whether the amendment is of a type that is allowed to be made by the investors  28  and whether the minimum percentage of investors for the amendment request have been satisfied ( 184 ). Both the type of amendments that can be initiated by an investor in the CPU and the minimum percentage of holders needed for an amendment request to be put to a vote are specified in the QOA  22  for the CPU  24 . For example, prior to requesting an amendment, the investor in the CPUs who desires to initiate the amendment can solicit signatures from other investors. The proposed amendment will be presented generally for a vote only if a large enough proportion of the investors support proposing the amendment. If the amendment is not of a type that is allowed to be made by the investors  28  or if the minimum percentage of holders needed for an amendment request to be put to a vote is not obtained, the economic participation market  26  rejects the amendment ( 186 ). On the other hand, if the amendment is of a type that is allowed to be made by the investors  28  and minimum percentage of holders needed for an amendment request to be put to a vote is obtained prior to submission of the request, the economic participation market  26  requests and receives votes from the investors who currently hold the segregated contract participation units ( 188 ) and determines whether the number (e.g., the percentage) of votes were received in support of the amendment was big enough to support the amendment ( 190 ). If enough votes supporting the amendment were not received, the economic participation market  26  rejects the amendment ( 194 ). If enough votes were received in support of the amendment, the economic participation market  26  implements the amendment ( 196 ) and the amendment becomes a legally binding obligation for the issuer  20  and investor  28 . 
     18 Withdraw Qualified Operating Agreement 
     In some situations, issuers  20  can withdraw a QOA  22  after it has been registered and CPUs  24  have already been issued. For example, an issuer  20  could desire to withdraw a QOA  22  if its financial situation changed, it was not able to sell enough CPUs, other more attractive financing options are available, etc. However, prior to withdrawing the QOA  22 , the Issuer  20  buys back all CPUs  24  connected to the QOA  22  that are still being traded in the economic participation market  26 . It is possible to include in the QOA  22  a PUT price in which the issuer is allowed to buy part or all of the outstanding units. 
     Such redemptions can require a positive vote from a certain minimum percentage of Investors and a preset method and/or set of formulae for valuing the CPUs  24 . In order to protect investors in the segregated contract participation units, if the Issuer  20  does not specify both of these in the QOA  22 , the issuer  20  will not be allowed to force a buy back of CPUs  24 . 
       FIG. 13  shows a process  210  for withdrawal of a QOA  22 . The economic participation market  26  receives a request to withdraw the QOA  22  from the issuer  20 ( 212 ) and determines whether the QOA  22  specifies a buyback and withdrawal procedure ( 214 ). If the QOA  22  does not provide such terms, then the economic participation market  26  denies the withdrawal of the QOA  22 ( 216 ). If the QOA  22  does provide a buyback procedure, the economic participation market  26  determines what percentage of votes is necessary to allow the withdrawal and what percentage of the investors must participate in the vote ( 218 ). The percentage of votes necessary and the percentage of investors required are specified in the qualified operating agreement  22 . The economic participation market  26  also requests and receives votes from segregated contract participation unit holders regarding the proposed withdrawal ( 220 ) and determines whether votes were received from a large enough portion of the investors  28  ( 222 ). If votes were not received from a large enough portion of the investors  28 , the economic participation market  26  rejects the withdrawal request ( 224 ). If votes were received from a large enough portion of the investors  28 , the economic participation market  26  determines if the number of votes in favor of the withdrawal is greater than the percentage required to allow the withdrawal ( 226 ). If the percentage is less than the required percentage, then the economic participation market  26  rejects the withdrawal and the CPUs  24  remain as legally binding agreements between the segregated contract participation unit holders and the issuer  20  ( 228 ). On the other hand, if the percentage is greater than or equal to the required percentage, the economic participation market  26  calculates the value of the CPUs  24 ( 230 ). The value is calculated according to a pre-defined formula included in the qualified operating agreement  22 . After calculating the value for the CPUs  24 , the issuer  20  repurchases the CPUs  24  from the investors  28  at the calculated value ( 232 ) and withdraws the QOA  22  from the economic participation market  26  ( 234 ). 
     19 Disclosure 
     Issuers  20  file disclosures based on the details they provide in the Disclosure Procedure and Timing section of the QOA  22 . The filing can be electronic; the economic participation market  26  can include a mechanism that accepts submittals of disclosure documents from registered Issuers  20  and broadcasts them to Investors  28 , all of whom are registered in the economic participation market  26 . The EPM will also have a mechanism that will send alerts to issuers  20  in the days/weeks leading up to scheduled disclosure dates, and will provide exception handling functionality for missed deadlines. 
     20 Participation Based on Non-Monetary Contribution 
     As mentioned above, in some embodiments, the investor  28  can purchase participation by a non-monetary contribution of goods or services.  FIG. 14  provides an example of an arrangement where participation is based on a non-monetary contribution. In such an arrangement, a producer of goods exchanges a component or service for participation in an activity of a manufacturer or company that will use the component or service (as shown in block  240 ). The participation is issued in the form of a CPU  24  that outlines the responsibilities of the manufacturer or company. The manufacturer or company that issued the CPU  24  then incorporates the component into a product (as shown in block  242 ) and the product is sold to consumers (as shown in block  244 ). Based on the terms outlined in the CPU  24 , a portion of the proceeds from the sale of the product into which the component was incorporated is returned to the producer of the goods (as shown in block  246 ). 
     It is believed that allowing a producer of a component to purchase participation in the product into which the component is to be incorporated can re-allocate the risk for the producer of the product. For example, if a component is expensive and the producer of the product is unsure whether a product incorporating the component will be successful, the producer of the product can offer participation to the producer of the component such that the producer of the component shares in the risk of whether the product incorporating the component will be successful. It is believed that such a decoupling of the chain of title from the risk can make higher risk projects and products more feasible. 
     For example, as shown in  FIG. 15 , a car manufacturer could be debating the decision of whether to include an in-dash global positioning system (GPS) in a car due to the cost of such a component. In order to share the risk of the decision with the producer of the GPS system, the GPS producer could exchange the in-dash GPS systems for a CPU issued by the car manufacturer (as shown in block  250 ). For example, the CPU could provide a discounted purchase price plus a return based on a percentage of the profits for cars incorporating the component. The car manufacturer could then incorporate the GPS systems into the cars (as shown in block  252 ) without having to pay the high up-front cost of the GPS systems. The cars that have the GPS system incorporated into them are then sold to consumers (as shown in block  254 ) and a portion of the proceeds from the sale are returned to the GPS producer (as shown in block  256 ) based on the terms in the CPU. 
     The system and methods used to implement the economic participation market described herein can be implemented in digital electronic circuitry, or in computer hardware, firmware, software, or in combinations thereof. For example, calculations of the value for a segregated contract participation unit, the formation of a qualified operating agreement, formation of segregated contract participation units, the settlement processes for segregated contract participation units, etc. can occur in systems  511  as shown in  FIG. 16 . Generation of qualified operating agreements and segregated contract participation units can be implemented using any technique. Also, data structures used to represent contents of the qualified operating agreements and segregated contract participation units can be stored in memory and in persistence storage. The segregated contract participation units can be represented by certificates or preferably as book entries in the records of an administrator or broker/dealer or clearing house or transfer agent or registrar either as manual entries or preferably as data structures in an administrator or a broker/dealer&#39;s computer systems. 
     Apparatus of the invention can be implemented in a computer program product tangibly embodied in a machine-readable storage device for execution by a programmable processor and method actions can be performed by a programmable processor executing a program of instructions to perform functions of the invention by operating on input data and generating output. The invention can be implemented advantageously in one or more computer programs that are executable on a programmable system including at least one programmable processor coupled to receive data and instructions from, and to transmit data and instructions to, a data storage system, at least one input device, and at least one output device. Each computer program can be implemented in a high-level procedural or object oriented programming language, or in assembly or machine language if desired, and in any case, the language can be a compiled or interpreted language. Suitable processors include, by way of example, both general and special purpose microprocessors. Generally, a processor will receive instructions and data from a read-only memory and/or a random access memory. Generally, a computer will include one or more mass storage devices for storing data files, such devices include magnetic disks, such as internal hard disks and removable disks magneto-optical disks and optical disks. Storage devices suitable for tangibly embodying computer program instructions and data include all forms of non-volatile memory, including, by way of example, semiconductor memory devices, such as EPROM, EEPROM, and flash memory devices; magnetic disks such as, internal hard disks and removable disks; magneto-optical disks; and CD ROM disks. Any of the foregoing can be supplemented by, or incorporated in, ASICs (application-specific integrated circuits). 
     An example of one such type of computer is shown in  FIG. 16 , which shows a block diagram of a programmable processing system (system)  511  suitable for implementing or performing the apparatus or methods described herein. The system  511  includes a processor  520 , a random access memory (RAM)  521 , a program memory  522  (for example, a writeable read-only memory (ROM) such as a flash ROM), a hard drive controller  523 , and an input/output (I/O) controller  524  coupled by a processor (CPU) bus  525 . The system  511  can be preprogrammed, in ROM, for example, or it can be programmed (and reprogrammed) by loading a program from another source (for example, from a floppy disk, a CD-ROM, or another computer). 
     The hard drive controller  523  is coupled to a hard disk  130  suitable for storing executable computer programs, including programs embodying the present invention, and data including storage. The I/O controller  524  is coupled by an I/O bus  526  to an I/O interface  527 . The I/O interface  527  receives and transmits data in analog or digital form over communication links such as a serial link, local area network, wireless link, and parallel link. 
     It is to be understood that the foregoing description is intended to illustrate and not to limit the scope of the invention, which is defined by the scope of the appended claims. Other embodiments are within the scope of the following claims.