Citadel LLC, the parent of Griffin’s money-management and brokerage firms, is setting up a dealer to make markets in contracts used to hedge or speculate on everything from currencies to corporate creditworthiness, according to a regulatory filing and a person briefed on the matter, who asked not to be identified because the plans are private. The move positions Citadel to compete with JPMorgan Chase & Co. and other banks that reap tens of billions of dollars in annual revenue from over-the-counter derivatives.

When regulators permitted the first fully electronic options exchange to start more than a decade ago, Chicago-based Citadel used its technological edge to become one of the largest market makers in both stock and equity-options trading. The firm now sees an opening in the swaps market as rules put in place after the 2008 financial crisis to promote transparent pricing, central clearing and electronic trading transform a business long dominated by a group of 16 international banks.

“If the market evolves in a way where the most important factor goes from relationships to technology, that is what the new entrants will thrive on,”said Ryan Sheftel, head of e-commerce in the fixed-income division of Credit Suisse Group AG. “If it goes very electronic, relationships matter less.”

Katie Spring, a Citadel spokeswoman, declined to comment on the new unit. […]