CHALLENGE:
Eris Futures was formed in 2010 by five of Chicago’s largest proprietary trading firms: DRW, GETCO, Nico Holdings, Infinium, and CTC Holdings. The company’s founding exchange was a trading platform designed to match interest rate swap futures, clearing trades through CME Group.
But absent from Eris Exchange were post-trade functionality and regulatory requirements that stood in the way of approval for a CFTC (Commodities Futures Trading Commission) Regulated Designated Contract Market. Because the order matching platform, SwapX, was built with third-party software, Eris desired a technology partner to integrate their matching engine with these clearing and back office specifications.
Connamara was recommended to Eris for expertise working with capital markets and regulatory organizations. Before our CEO, James Downs, and COO, Mike Gatny, could formulate a written proposal, Eris Futures bought Connamara’s verbal pitch. They put their faith in Connamara’s engineering team to design and implement the software and infrastructure that connected and managed Eris Futures’ post-trade functionality.
SOLUTION:
When devising a software solution that would meet Eris’ needs, Connamara’s early meetings and discovery sessions gained an appreciation for the CFTC’s reliability, availability, disaster recovery, and security requirements. Our team understood that deep adherence to these strict regulations would result in Eris Futures’ successful approval by the Trading Commission and acted accordingly.
Our team integrated and sent the trades customers made on SwapX downstream to the CME Clearport for clearing and settlement. Using Ruby and Ruby on Rails, our program imported SwapX real-time trade data for regulatory audits and trade data archiving requirements. We calculated daily settlement prices of futures contracts and published them to interested parties in various formats and protocols. Finally, we created multiple reporting tools and widgets for monitoring and alerting the system’s health.
During the handoff, Connamara assisted Eris in hiring and training an internal software development staff to implement and support this new technology.
RESULT:
The Commodity Futures Trading Commission successfully approved Eris Futures’ application to become a designated contract market (DCM) in October 2011, demonstrating Connamara’s commitment to compliance with regulatory requirements.
After this initial launch, Eris Futures expanded the project to include an option for Block Trades. Connamara built this feature to integrate with this new, existing infrastructure. In the years following the CFTC approval, Connamara was tasked with further refining and enhancing Eris’ post-trade and reporting infrastructure to meet shifting industry priorities.
With Connamara as a foundational software vendor, Eris Futures achieved critical early objectives that set the stage for future milestones. In the years prior, Eris Exchange and SwapX received numerous awards for innovation and leadership in the interest rate swap technology space. Risk Magazine named Eris part of “25 Risk Firms of the Future” in 2012.
In 2018, Eris Futures became Eris Innovations and ErisX. ErisX was acquired by the CBOE in 2022.
