11/2/2009 About Us
Ralph Y. Liu is the Founder and Chairman of California-based Advanced e-Financial
Technologies, Inc. (AeFT). AeFT is currently a research and consultancy firm. It has been one of
the major providers for financial innovations in the new real estate and property derivatives field
since its inception in 2001. AeFT's earlier seminal REIFO venture attempt in early 2002 (for other
than nostalgic reason, the original, not-updated vintage site is still kept at http://www.
InvestorsAlly.com ) was regarded as the first online real estate futures and options exchange in
the global financial derivatives industry (See page 3 of Futures and Options Week, "First Online
Exchange for Real Estate Futures", Vol. 7, Number 36, September 16th, 2002 , also Risk
Magazine, "Building A Hedge for Housing", Feature, December 1st, 2002 , also John Rubino's
book, "How to Profit from the Coming Real Estate Bust - Money-Making Strategies for the End of
the Housing Bubble"; Published by Rodale, 2003; ISBN 1579548709, 9781579548704; pages
226-227 , also Risk Magazine again, "Universal Hedging", Feature by Nick Sawyer, March 6th,
2003 , also "Contract Market Viability" by Gordon C. Rausser and Henry L. Bryant, April 2004
and Comments on Session "Aggregation Issues" by Professor Robert J. Shiller, BIS Paper No.
21, Part 26, Page 338, April 2005) that fostered the subsequent interests and efforts by many
other industry participants to start exploring in this emerging field. The housing-led financial
crisis that started to appear in early 2007 has made its earlier extensive research and
development work in the preceding years coincidentally very relevant and timely.
In early 2006, AeFT pioneered the development of real estate index derivatives into more user
friendly consumer financial products. Notable examples are its patent pending SwapRent (SM)
instruments to facilitate the newly created "economic renting, owning and switching" concept as
well as the related new generation of mortgage products such as HELM, PELM and FVCM for
property owners and investors in countries located in many parts of the world. Upon introducing
this radically new simplifying and unifying consumer "economic renting/owning" or "economic
own-rent switching" concept, Ralph has been able to provide the similar economic benefits,
traditionally offered only by complicated financial derivatives in the past, to homeowners and
investors without having to resort to those traditional complex derivative instruments, since most
consumers are already very familiar with the many differences between the financial transactions
of owning and renting a real estate property.
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11/2/2009 About Us
Through its REIDeX subsidiary (a WIP prototype is currently located at http://www.REIDeX.com
for illustration and public education purposes), it provides a marketplace for the trading and
settlement support of the three types of SwapRent (SM) contracts (Generic, AG and DP) and
other property index-linked derivatives on both residential and commercial properties.
Due to the fact that the SwapRent (SM) system and its embedded mortgage product HELM were
originally invented based on an efficient flexible and reversible shared economic ownership
concept that is coincidentally consistent with the profit sharing principles of Islamic finance,
Ralph has devoted much of his recent time in early 2009 researching Islamic banking practices
in order to develop a new generation of Islamic mortgage products based on a Sharia compliant
version of SwapRent (SM) and HELM to introduce his new "economic owning and renting"
concepts to the 1.66 billion of global Muslim population.
The exciting new type of housing finance products that he created specifically under these
Islamic finance principles is called FARM (Flexible And Reversible Musharakah or
Musyarakah) which provides ultimate economic benefits to both Muslim and Western
consumers alike. For the first time people could finally own, occupy and use a residential
property not only without Riba, the burdening of people through the borrowing or lending of
money, but also get to hold on to the property under unforeseen future adverse economic
situations. The successful implementation of this new FARM product by homeowners could
potentially make the term "mortgage foreclosure" or "property repossession" obsolete.
Previously he was the Chief Investment Officer and an Executive Vice President of China
Everbright (Guang-da) Bank based in Beijing where he introduced the first RMB (CNY) -
denominated interest rate swap to the Beijing inter-bank community that started the domestic
derivatives industry in China. Due to the newly created ability to manage the bank's asset and
liability through these new interest rate swaps, he was able to design and launch the first long
term fixed rate residential mortgage offered by the bank to the entire homeowners market in
China as well as the first fixed rate corporate loans for corporate borrowers in the country. Using
fixed interest rates to borrow from commercial banks was finally made possible for the first time
for Chinese homeowners and corporate borrowers since the introduction of the free market
concepts in the 80's by a previously central planning society under the Communist government.
Chinese business entities finally got to compete with American, Japanese or European
companies on an equal basis at the global stage in terms of managing their own borrowing cost.
Global MNCs doing business in China could hence manage their overall interest rate risks in the
domestic currency RMB as well.
Due to this newly introduced capability for all the Chinese property mortgage borrowers to use
fixed rate mortgages which was introduced, launched by China Everbright (Guang-da) Bank in
January, 2006 and subsequently followed by many major commercial banks in China,
homeowners in China may get to avoid a similar subprime mortgage lending fiasco by relying on
transient low variable rates that happened in the US home mortgage markets. Although the RMB
lending rates have not moved sharply higher since then and the Chinese property market is
continuing to be pushed higher by short term variable borrowing rates, the low interest rate
environment may come to an end sooner or later and the credit-induced climb of the Chinese
property market may subsequently also come to a halt as a result.
With a timely development of the SwapRent (SM) transaction service for homeowners and the
SwapRent (SM) embedded HELM and FARM products in a new alternative complementary
housing finance system, banks and other financial institutions in the future may easily get to
escape the massive mortgage defaults and foreclosures that banks in places like the US, the
UK, Ireland and Dubai have encountered in recent years.
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11/2/2009 About Us
Ralph built and ran a successful Singapore-based derivatives trading/risk management
consulting and IT systems company in the 90's called ARMS (Advanced Risk Management
Solutions, Pte. Ltd.) which provided services over 26 countries covering the entire emerging
markets from Asia, Middle East to Central and Eastern Europe with a 4% global market share.
Counted among clients were many major stock exchanges, futures and options exchanges,
brokerage companies, banks and other financial institutions including central banks around the
regions.
ARMS' teams of financial engineers and traders would typically set up and run OTC derivatives
trading desks such as interest rate swaps and FX options through joint ventures with local banks
in the region. Ralph was an innovator, creator as well as a prolific writer, speaker and educator
that had helped shape the development of the financial markets in many of the Asian, Middle
Eastern, and Central / Eastern European emerging economies in the 90's. Among many of his
earlier academic publications and inventions, the VaR Derivatives and related new theories that
he created were of particular interests to the financial enterprise-wide risk management
community.
In his earlier years as a prominent derivatives banker in Asia, he was brought to Singapore from
New York by UBS while a Vice President in sales, trading and risk management. With the early
experiences gained on Wall Street, he successfully created many new innovative treasury
businesses based on structured derivatives for the Asian banking community. He then moved on
to be the Managing Director and Head of Structured Derivatives for Chase Manhattan Bank
based in Hong Kong to run the entire Asian derivatives business with many more financial
innovations and substantial business revenue results for the bank.
Ralph acquired his earlier training in financial derivatives and capital markets sales and trading
through working at many prestigious Wall Street institutions such as Morgan Stanley, Chemical
Bank (JP Morgan Chase now) and Equitable Life Assurance Society (AXA now), all based in
New York City.
Ralph received his MBA in 1987 from the Wharton Business School after he completed many
other graduate degrees and studies in computer information science and chemical engineering
from various top American universities (Penn, Michigan and Rice).
Ralph was born in Taiwan and holds both US and EU citizenships as well as an Australian,
Singapore, Hong Kong and China Permanent Residence. He speaks fluent Chinese and
understands basic Russian. He lives in Rancho de Liu in Southern California with his wife,
children & their Arabian horses.
Here below are partial lists of references.
Press, Magazine and Book Coverage
"A new beginning", Islamic Home Finance, ISlamic Business and Finance, Oct 09, Issue 46,
CPI Financial, November 2nd, 2009 CPI Financial web link
"Private sector home affordability strategies progress", Structured Credit Investor, Issue
155, October 7th, 2009.
"Game-Changers: New Financial Products and Platforms in Uncharted Territories", by John
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11/2/2009 About Us
Jay, Senior Analyst, Aite Group, April 6th, 2009 (page 4 - 7).
"Entrepreneur Liu Sees A Derivative Solution for Homeowners", Dow Jones Newswires,
September 4th, 2007
"Product Proposed to Hedge Against Home Prices", Inside Mortgage Finance's Inside B&C
Lending, August 24th, 2007
"SwapRent (SM) Plan Matches Struggling Borrowers with Investors" MortgageDaily.com,
July 10th, 2007
"Profile: Ralph Liu - Back on the Ranch", Risk China Magazine (in Chinese), December
2006
"Profile: Ralph Liu - Back on the Ranch", Asia Risk Magazine, July 2006
"The Chinese Derivatives Market Is Way Too Seductive - An Interview by Cai Jin Magazine
in Beijing, March 2006 (in Chinese), Page 1; Page 2; Page 3
"China Takes Limelight", Derivatives Week, March 20th, 2006
"The man behind the deal", The Hong Kong Standard, February 14th, 2006
"Rancher Spurs Beijing to Accept Rate Swaps", Wall Street Journal, February 14th, 2006
"PBOC lists rules for interest rate swaps", The Standard, February 10th, 2006.
"Entrepreneur Sees A Futures Market for Homeowners", Los Angeles Times, April 20th,
2003
LA Times Article Web Version, April 20th, 2003
"Universal Hedging", Risk Magazine, Feature by Nick Sawyer, March 6th, 2003, Web-link
"How to Profit from the Coming Real Estate Bust - Money-Making Strategies for the End of
Housing Bubble", John Rubino, Published by Rodale 2003, ISBN 1579548709,
9781579548704, pages 226-227
"Preserving Your Home's Value", Business 2.0, February 2003
"Building A Hedge for Housing", Risk Magazine, Feature, December 1st, 2002, Web-link
"First Online Exchange for Real Estate Futures", FOW Week (Page 4), September 2002
ASP Vendors Vie for Asian Business, Risk Magazine, October, 2000, Page 1; Page 2
"Malaysian Bank Expands in Derivatives - ARMS Derivatives Trading Project", Futures and
Options Week, June 1997
"Banks Hold the Keys to Future of Malaysian Derivatives", Asia Times, December 1996
"ARMS and the Risk Man", Futures and Options World, February 1996
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11/2/2009 About Us
"Derivatives - Safest Tools Around", Business Monday, Taipei China Post, September 1995
"Dabbling in Derivatives - Sound Money Market Is Essential", Indonesian Business Weekly,
Jakarta, Indonesia, May 1995
"Chase Derivatives Chief Quits Hong Kong for Base in Singapore", Business Times,
September 27th, 1994
"Foreign Banks Preparing for the Launch of RMB Currency Derivatives (in Chinese)", Hong
Kong Economic Times, August 1994
"Derivatives Demand Picking Up in S-E Asia", Malaysian Business Times, August 1994
"Asians Tune in to New Instruments", South China Morning Post, August 1994
Published Articles
"SwapRent-empowered FARM - An 8-minute Introduction", Written on August 18th, 2009
"FARM vs. HELM - The Two Opposite Entry Points to Adjust Economic Ownership in Real
Estate Property", Written in July, 2009
"FARM - A New Type of Housing Finance Products without Foreclosure Possibility", Written
in May, 2009
"SwapRent (SM) Embedded HELM vs. SAM and SEM", Written in May, 2009
SwapRent (SM) Presentation File, Version 6, "SwapRent (SM) - A New Alternative for
Property Owners and Investors", July, 2009
SwapRent (SM) Presentation File, Version 5, "SwapRent (SM) - A New Alternative for
Property Owners and Investors", June, 2009
SwapRent (SM) Presentation File, Version 3b, "SwapRent (SM) - A New Alternative for
Property Owners and Investors", August, 2008
Localizing homeowner credit risk decisions and management - why new SSEs (State
Sponsored Enterprises) may be better replacements for the current GSEs in a new national
housing finance system, July, 2008.
SwapRent (SM) Presentation File, Version 3, "The SwapRent (SM) Project for
Municipalities (City and County Governments)", June, 2008
REIDeX SwapRent (SM) Product Fact Sheet, March, 2008
SwapRent (SM) Presentation File, Version 2, "REIDeX.com - The SwapRent (SM)
Marketplace", A REIDeX, Inc. Presentation File, February, 2008
"USPTO Patent Applications for SwapRent (SM) Transactions, the Related Property
Derivatives Embedded Mortgage Products (HELM, FVCM), Structured Investment Assets
(PILN, REILD), the OTC Market Place (REIDeX) and the Property Price Index Construction
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11/2/2009 About Us
Methodology (SPIM)", Published by USPTO on 10/18/2007, USPTO Patent Application #:
20070244780 A1
"PCT Patent Applications (WO/2007/111928): Real Estate Derivative Financial Products,
Index Design, Trading Methods, and Supporting Computer Systems", Published by WIPO
on October 4th, 2007
"SwapRent (SM) - A New Alternative for Property Owners", An AeFT Business Product
White Paper, Written on March 26, 2006 and Published on October 18th, 2007 (This is the
original English version before being translated into the legalese of the Patent Application.)
SwapRent (SM) Presentation File, Version 1, "SwapRent (SM) - A New Alternative for
Property Owners", An AeFT Inc. Presentation File, Written on March 26, 2006 and
Published on October 18th, 2007
"VaR and VaR Derivatives", Capital Markets Strategies, September, 1996
"Pricing VaR Derivatives - A Capital Cost - Based Approach" Financial Products", April 3rd,
1997
"VaR Derivatives", Derivatives Week, September 1996
"The Value-at-Risk Revolution", Finance Asia, May 1996
"A Lesson in Financial Futures Trading", Asia Time Opinion, April 1996
"The Futures Game", The Edge, December 1995
The Alchemy of Asian Exotics, Risk Magazine, November 1995
"Building for the Futures", Risk Management, Finance Asia, 1995
"Managing Market Risks in Derivatives Trading", The InterData FinanceAsia Handbook,
1995
"When the Standard Advice Fails to Reflect Asian Markets Realities", Asia Times, 1995
"Currency Options Market - Euromoney Guide to Financial Techniques (in Chinese)", 1994,
Page 67; Page 68; Page 69; Page 70; Page 71; Page 72
Conferences and Seminars
Second International Think Tank on Housing Wealth, "House Prices and Risk", Melbourne,
Australia, Organized by Durham University, Durham, England and RMIT University,
Melbourne, Australia, 12-13 February 2009. Draft Conference Agenda
Milken Institute Financial Innovations Lab, "Seminar of Housing Finance - Beyond the
Crisis", Washington DC, Organized by Milken Institute, October 7th, 2008
Harvard Business School Real Estate Symposium 2008, Organized by Harvard Business
School, Cambridge, MA, February 9th, 2008
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11/2/2009 About Us
Guest Speaker Series "A Talk on SwapRent (SM)", Finance Club, Drucker Graduate
School of Management, Claremont, CA, Organized by Claremont Graduate University,
Claremont, CA, November 6th, 2007
Terrapinn Real Estate Derivatives World Conference, New York City, April, 2007
Terrapinn Property Derivatives World Conference, London, June, 2006
Keynote Speech at ISDA Annual General Meeting in Singapore, March 2006
International Swaps and Derivatives Association (ISDA) 2006 AGM Presentation File on
Chinese Financial Markets, Singapore, March 2006
"Backroom Operations in Financial Institutions", The Asia Business Forum, Singapore,
February 2000
"Advanced Asset and Liability Management", ICM, Tokyo, Japan, November 1999
ARMS Global Financial Series 1999, The Value at Risk Approach to Bank-wide Risk
Management, Page 1; Page 2; Page 3; Page 4
"CEO Breakfast Talk for the Insurance Industry", Malaysian Monetary Exchange (MME),
Kuala Lumpur, July 1998
"Asian Bonds '98", International Business Forum, Singapore, February 1998
"Key Uses of Hedging Instruments to Protect Your Investment", International Business
Forum, Kuala Lumpur, February 1998
ARMS Asian Financial Series 1997, Managing the Risks in Trading Derivatives, Page 1;
Page 2; Page 3; Page 4
ARMS Asian Financial Series 1997, FX Options Trading and Their Structured Applications,
Page 1; Page 2; Page 4
"Value at Risk", ICM, Tokyo, Japan, September 1997
"Credit Risk of Derivatives", AIC Conferences, Singapore, September 1997
"Understanding Stock Warrants", Taiwan Stock Exchange, July 1997
"Risk Asia Congress 97", AIC Conferences, Singapore, June 1997
"Internal Audit 1997", The Asian Business Forum, Singapore, June 1997
"Credit Derivatives Summit", Tokyo, Japan, June 1997
Asian Credit Derivatives Summit 1997, AIC Conferences, Hong Kong, May 1997
"Backroom Operations in Financial Institutions", The Asia Business Forum, Singapore, May
1997
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11/2/2009 About Us
"Asian Securities and Investment Automation Congress - Exchange Tech", AIC
Conferences, Kuala Lumpur, Malaysia, April 1997
"Derivatives on Exotic Currencies", The Asia Business Forum, Singapore, March 1997
"The 6th International Financial Markets Seminar, State Administration of Foreign Exchange
(SAFE), Shenzen, China, January 1997
"Trends in Risk Management Technology for Financial Institutions - VaR", AFMA
TechnoFuture96, Sydney, Australia, December 1996
"Currency Derivatives for Traders and Investors - FOW Asia Pacific Derivatives Exhibition",
Singapore, November 1996
"FX Options Trading and Their Structured Applications", Reuters, Seoul, Korea, September
1996
"The 12th Asia Pacific Petroleum Conference (APPEC)", Singapore, September 1996
"Internal Audit in Banking". IIR, Singapore, September 1996
"Re-Engineering the Banks", AIC Conferences, Singapore, August 1996
ARMS Asian Financial Series 1996, Value at Risk and Internal Risk Control
"The '96 Asia Pacific Fund Management Conference", Strategic Forum Expertise, May 1996
"Fund Management in Malaysia", IBC Technical Services, Kuala Lumpur, April 1996
"Fund Management in the Philippines", Institute for International Research, Makati City,
Philippines, March 1996
"Fund Management Conference", AIC Conferences, Jakarta, Indonesia, March 1996
"The Indonesian Fixed Income Conference", AIC Conferences, Jakarta, Indonesia, January
1996
"Currency Derivatives for Traders and Investors", FOW Events, Singapore, October 1995
"A Seminar on Understanding the Stock Options and Index Futures", Kuala Lumpur,
Malaysia, October 1995
"Uses and Advantages of Stock Index Futures for Stock Investors, Kuala Lumpur, Malaysia,
October 1995
"Taiwan Banking and Finance Conference", AIC Conferences, Taipei, Taiwan, August 1995
"FX Options Trading and Their Structured Applications (in Chinese)", Reuters, Taipei,
Taiwan, July 1995
"The Risk and Danger of Derivatives", Asia Law and Practice Seminars, Hong Kong and
Singapore, June and July 1995
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11/2/2009 About Us
"Derivatives for End-Users", AIC Conferences, Singapore, June 1995
"Bond Analytics and Fixed Income Derivatives", Asia Business Forum, Emerging Markets in
Asia, Singapore, May 1995
IBF Managing Bond Portfolios - Bond Analytics and Fixed Income Derivatives, Singapore,
May 1995
IBF Managing the Risks in Trading Derivatives, Singapore, May 1995
"FX Options Trading and Their Structured Applications, Reuters, Singapore, April 1995
"Thai Derivatives Conference", AIC Conferences, Bangkok, Thailand, November 1994
Sample Awards, Rankings and Event Photos
Signing Ceremony Photo of the First CNY (RMB) - denominated Interest Rate Swap in
China, January 2006
"Treasury Vendor Battle", Global Finance Magazine, May 1999
"ALM Systems Ranking", Meridien Research, February, 1999
"Most Popular Finance Web Site", FinanceWise Ranking, October 1998
ARMS' ATMS Awarded Innovation Development Scheme National Science and Technology
Board, Government of Singapore; Technopreneurship, June 1998
ATMS Brochure
Chase FX Options Seminar Photo, Penang, Malaysia, August 1994
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