When mandatory electronic swaps trading began in earnest early last year, there were more than 20 swap execution facilities, venues that emerged to meet postcrisis transparency and clearing requirements. Today there are fewer than ten; most are run by brokerages like ICAP that historically dominated swaps trading or by electronic execution titans like Bloomberg and Tradeweb Markets. An exception is trueEX Group, which billed itself as the first Dodd-Frank-compliant swaps exchange in September 2012, when it obtained Designated Contract Market status for interest rate swaps from the Commodity Futures Trading Commission. SEF approval came a year later, and today the 45-employee New York firm, founded by Sunil Hirani, captures 5.7 percent of overall SEF volume and as much as 15 percent of the Bloomberg- and Tradeweb-dominated half of the market that deals directly with the buy side. Were providing choice to consumers in a market thats dominated by incumbents, says CEO Hirani, a onetime Lockheed software engineer who came out of Deutsche Banks derivatives group in the late 1990s to co-found the pioneering credit default swaps platform Creditex Group, which Intercontinental Exchange bought in 2008 for $513 million. The 48-year-old attributes trueEXs success to its focus on nondollar, nonstandard swaps. The world is episodic; the world is custom you need to give people flexibility, he says. Last year Hirani and Donald Wilson, CEO of Chicago-based DRW Trading Group, co-founded Digital Asset Holdings, which in March named former JPMorgan Chase & Co. executive Blythe Masters as CEO to lead its development of blockchain technology for transaction settlements. The two ventures complement each other, Hirani says, and can do much to enhance the security, speed and efficiency of derivatives trading.
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