Citadel Securities sues SEC over approval of new stock-order type
Reuters
Published Oct 16, 2020 09:50PM ET
By Kanishka Singh
(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.
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Written By: Reuters
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