BANKS OCTOBER 17, 20204:51 AMUPDATED 7 HOURS AGO Citadel Securities sues SEC over approval of new stock-order type By Kanishka Singh 2 MIN READ (Reuters) - Citadel Securities, which provides trading services to asset managers, banks, broker-dealers and hedge funds, has sued the Securities and Exchange Commission over its decision to approve a new mechanism for trading stocks at upstart exchange operator IEX Group Inc. “The SEC failed to properly consider the costs and burdens imposed by this proposal that will undermine the reliability of our markets and harm tens of millions of retail investors,” a Citadel Securities spokeswoman said in an email on Friday. The lawsuit, which was filed on Friday and first reported by the Wall Street Journal, increases Citadel Securities’ dispute over IEX’s “D-Limit” order type. The D-Limit is designed to give traders a way to buy or sell stocks at the exchange while protecting them against unfavorable price moves. Citadel Securities earlier asked the SEC to reject the proposal from IEX, saying the D-Limit will damage the U.S. stock market’s integrity. But in August, the SEC sided with IEX allowing the plan to go forward. Citadel Securities asked the U.S. Court of Appeals for the District of Columbia Circuit to review the SEC’s decision to approve the D-Limit order, according to a copy of the court filing. The SEC was not immediately available for comment late on Friday. IEX President Ronan Ryan, in a statement quoted by the Wall Street Journal, said he was confident the SEC’s decision will be upheld. “Since its launch on Oct. 1, D-Limit is already proving valuable to a broad set of market participants,” Ryan said. “From our perspective, this recent action should only encourage more investors, brokers and market makers to use D-Limit given that the protections we have created are clearly working,” Ryan said. https://www.reuters.com/article/cit...pproval-of-new-stock-order-type-idUSL4N2H8011
Citadel Securities files lawsuit against SEC over IEX new order type AuthorBanking Citadel Securities LLC on Oct. 16 filed a lawsuit against the U.S. Securities and Exchange Commission for approving a new order type introduced by IEX Group Inc., Bloomberg News reported, citing Citadel Securities. Late in August, the SEC approved IEX's proposed Discretionary Limit, or D-Limit, order type, which will provide traders and investors with the ability to submit a limit order that IEX says will adjust its pricing if the stock price is estimated to adversely change. Citadel Securities, the trading and market-making shop, wrote to the SEC in mid-August, claiming that the IEX D-Limit proposal will "discriminate against all types of liquidity takers" because predictive technology known as the IEX Signal can be triggered by ordinary trading activity and could therefore force brokers to reevaluate their routing strategies. After filing the lawsuit with the U.S. Court of Appeals in Washington, Citadel said the SEC "failed to properly consider the costs and burdens imposed by this proposal," which could potentially "harm tens of millions of retail investors." IEX co-founder and President Ronan Ryan said he is confident that the SEC's approval will be upheld, Bloomberg News reported. The regulator declined to comment. Hudson River Trading LLC and Nasdaq Inc. are reportedly among those that oppose the IEX order type.
Go IEX!! Fuck citadel, they are upset because they can no longer have such a stranglehold on the latency arbitrage exploitation of NMS structure. These new IEX orders set the NBBO and will dent these behemoths profits considerably when people figure out. Nasdaq opposed this because their main profit source is latency arbitrageurs which pay nasdaq up to $50K a month to shoot fish in a barrel.
Citadel and D.E. Shaw single-handedly put thousands of floor traders out of business in the 1990s as the business moved to the screens.......now they are upset because others are showing up and trying to eat their lunch. Oh the irony.
The lawsuit in itself is a testament that traders should use the D-limit order type. Does IB offer access to the D-limit order type?
+1 Basically wrote this but didn't hit post button. Citadel & friends should put more effort into explaining exactly why this is not just about keeping their oligopoly intact.
Here is how to accomplish same thing as D-Limit, but in a fair way - giving people a choice. (The delay was reduced to 10ms since) https://www.nasdaq.com/docs/ELO Infographic Update January 2018.PDF