US interest rate swaps exchange trueEX has filed a lawsuit against IHS Markit for allegedly engaging in anti-competitive practices in the post-trade processing arena.
TrueEX, which competes for liquidity with established venues such as Tradeweb and Bloomberg, recently set up its own post-trade processing subsidiary, truPTS, trespassing on the turf of IHS Markit unit MarkitServ.
MarkitServ has since moved to cut off connections to trueEX, terminating a relationship in which the upstart exchange provides a 'drop copy' notice of completed transactions to the middleware platform.
In an open letter to clients explaining the decision to file the complaint in the New York courts, Sunil Hirani, trueEX co-founder and CEO, writes: "What I have surmised from my conversations with Markit, is they would like us to interact with them in a manner that most closely resembles the way voice broker IDB firms interact with them for voice trades - meaning the transaction would be executed on trueEX (FIX or UI) and then Markit exclusively would perform the matching, clearing and SDR messaging life cycle events.
This change requires trueEX to insert Markit in the 'middle' of all of our activities in order to process, clear and report transactions, thereby creating additional workflow steps, potentially slower response times, additional software and connectivity changes and higher costs."
Alongside the legal action, Hirani is calling on clients to put pressure on Markit to rescind its termination notice.
Markit has yet to respond to the allegations.