Swap execution facility trueEX has hired Kevin Lupowitz as chief technology officer to lead the platform’s technical direction as it pushes beyond its swaps origins and into government bond trading.
The move is part of an ambitious plan by the last standing start-up SEF to become the first full-service venue for interest rates trading across derivatives and cash.
The exchange industry veteran - Lupowitz was a founding employee of fixed income platform Liquidnet and former chief information officer of foreign exchange platform FXall - was most recently CIO of CLEAR, a biometric secure identity platform that is used in airports, stadiums and concert venues.
In his new role, Lupowitz reports to trueEX founder and CEO Sunil Hirani.
“Kevin’s hire signals our intent to accelerate the transformation of the broader rates markets for the good of both dealers and institutional clients,” said Hirani.
TrueEX has already expanded beyond cleared over-the-counter benchmark swaps that are mandated for SEF trading and now covers 20 currencies, including emerging markets swaps. Last year, the firm added execution for uncleared instruments including swaptions. The development was in response to client demand for greater efficiency savings on bilateral trades after new uncleared margin rules raised the cost and complexity associated with trading such products.
The addition of government bond trading capabilities aims to open the door for further efficiency savings, enabling packaged trades to be executed within a single venue. As part of the expansion initiative, the platform is also considering the addition of government bond futures through partnerships with derivatives exchanges, which would extend those efficiencies to invoice spread trading.
The last 12 months have seen trueEX achieve critical mass to cement its position alongside the two incumbent players, Bloomberg and Tradeweb, which is part-owned by IFR parent Thomson Reuters. Notional volume traded on trueEX this year jumped more than six-fold from 2016 and the firm has amassed a 30% market share in dealer-to-client swaps - up from 9% a year ago.
Growth has come alongside a surge of interest from broker/dealer clients. The venue has attracted 24 dealers to-date, while the 10 most active interest rate swaps dealers should all be on board in the coming months as another five prepare to join.
“With its expanding dealer and client footprint, trueEX has the potential to transform efficiency and structure of the global interest rates markets,” said Lupowitz.
Activity is expected to increase in 2018 as European firms become subject a sweeping overhaul of fixed income trading under MiFID II.
While some of the most liquid bonds and derivatives will be mandated to trade on new organised trading facilities or their US SEF equivalents, trueEX is focused on a voluntary shift to electronic execution as clients seek improved transparency and greater efficiency to lower costs and meet new best-execution requirements.