Regulatory changes, specifically, the moving of derivatives to centrally cleared venues, are set to create new opportunities in the industry, and five trading firms decided to capitalize on this by starting the Eris Exchange. Eris, which began trading in late July, trades interest rate swap futures and options that are cleared by CME Clearing. Its members are Chicago Trading Company, DRW Holdings, GETCO, Infinium Capital Management and Nico Holdings.

"It’s a unique contract design which replicates the OTC economic benefits while being able to be seamlessly processed in a futures back-office infrastructure," says Neal Brady, CEO of Eris Exchange.

Customers of Eris include users of OTC vanilla interest rate swap products, which can include asset managers and hedge funds. Eris is registered as an Exempt Board of Trade, which means its contracts can only be traded by "eligible contract participants."

Paul Zubulake, senior analyst at Aite Group, says, "[Eris’] main challenge is to get broad-based participation to accomplish the goal of having a liquid marketplace."