Citadel Securities has called on the U.S. Securities and Exchange Commission (SEC) to reconsider a proposal to eliminate a longstanding stock-trading rule.
In a letter to the SEC, the high-frequency trading firm argued that the rule, which governs order handling and execution transparency, is critical for maintaining market liquidity and reducing trading costs for retail investors. The proposal, part of broader market-structure reforms, seeks to modernize regulations by removing outdated requirements.
Citadel Securities contended that the rule’s elimination could lead to wider bid-ask spreads, higher volatility, and diminished competition among market participants. The firm emphasized that retail investors, who rely on efficient execution, would bear the brunt of reduced liquidity.
The SEC’s proposal has drawn mixed reactions from industry participants, with some advocating for streamlined rules to adapt to technological advancements. Others, including Citadel Securities, warn that such changes could undermine market stability and investor protections.
The SEC has not yet finalized the rule change, and public comments remain open. The outcome could reshape how stocks are traded in U.S. markets.
