A trio of federal judges in Washington have ruled against Citadel Securities in a case against the US Securities and Exchange Commission over its approval of the IEX’s D-Limit order type. According top a report by Bloomberg.
A trio of federal judges in Washington have ruled against Citadel Securities in a case against the US Securities and Exchange Commission over its approval of the IEX’s D-Limit order type, according to a report by Bloomberg.
D-Limit orders are subject to a 350 microsecond delay which is meant to reduce the advantage of high-frequency traders like Citadel. The electronic trading firm, founded by billionaire Bill Ackman, argued that D-Limit has a negative impact on investors by delaying orders and that the SEC approval process broke the laws and rules that govern it. Citadel wanted the court to force the SEC to reconsider or reverse its approval for D-Limit which was granted in August 2020 and came into force in October of the same year.
Citadel Securities profits from small differences between the bid and ask prices in a trade.
Instead, has the court found, “the SEC’s determination that the D-Limit order does not violate the Exchange Act by unfairly discriminating or unduly burdening competition was reasonable and supported by substantial evidence.”
IEX called the decision “a huge win for all investors and traders” while Citadel, which profits from small differences between the bid and ask prices in a trade, said in a statement that the company looks for wad to “continuing to engage with the SEC to ensure that the best interests of both retail and institutional investors are protected”.
