Citadel Securities sues SEC over approval of new stock-order type

Hawick Data NV

17/10/2020 02:41

By Kanishka Singh
    Oct 16 (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.

 (Reporting by Kanishka Singh; Editing by Leslie Adler)
 ((Kanishka.Singh@thomsonreuters.com; +91 8061822801;))