Eris Innovations attracted US$7.2 million in new funding in its latest funding round which closed yesterday.
This investment came predominantly from companies trading Eris SOFR swap futures, including DV Trading, DRW, Virtu Financial, ARB Trading and Arclight Securities, with DV Trading co-founder Jared Vergosen joining Eris Innovations’ board of directors.
The news follows an announcement on 27 February that Eris SOFR swap futures will be eligible for portfolio margining with interest rates swaps (IRS) cleared through CME Group.
These are cash-settled futures listed on CME Group with tenors of one to 30 years which emulate the risk exposure of a standard SOFR overnight index swap.
The company predicts that this will reduce the cost of holding Eris SOFR positions against offsetting rates swaps cleared through CME by 85 to 95 per cent.
These savings help swap dealers and other market makers to attract demand from market participants, particularly leveraged investors that can benefit from Eris SOFR’s futures margin levels to lower their hedging costs.
It says that end users holding directional Eris SOFR positions can save 50 to 70 per cent in initial margin relative to equivalent cleared IRS.
According to Eris Innovations’ CEO Michael Riddle: “The next chapter of the Eris growth story starts this week, as swap dealers and Eris partner firms leverage portfolio margining to ramp up their activity in Eris SOFR.”
DV Trading’s Jared Vergosen adds: “The recent inclusion of Eris SOFR in swaps portfolio margining is a defining moment for the Eris business.
“DV Trading has been an active market maker in Eris SOFR since its launch, and we plan to grow our presence to provide end users with the benefits of tighter markets.”
