Citadel Securities has urged the SEC to keep Rule 611, the order protection rule that has governed US stock trading since 2005, warning that repeal could push retail orders away from exchanges and weaken displayed liquidity. The Securities Industry and Financial Markets Association (SIFMA) separately told the SEC that brokers could keep paying for market data even after the rule disappears.
Citadel challenges the SEC's cost case
Citadel Securities urged the SEC yesterday (Monday) to keep the order protection rule for US stocks, arguing repeal could hurt retail investors and public exchanges. Without Rule 611, a trading center could execute an order at a worse price than a protected quote displayed elsewhere.
The SEC proposed in June to rescind Rule 611 and Rule 610(e), which restricts locked and crossed quotes. Reuters reviewed the Citadel Securities letter, in which the firm said the SEC had not shown that repeal's benefits would outweigh its risks. It described expected compliance savings of about $250,000 per trading day as small next to the size of the US stock market.
Brokers, the firm said, would find it easier to bypass better displayed exchange prices, so more customer orders could end up internalized or routed to alternative venues instead of public markets. According to Citadel Securities: "We urge the Commission to reconsider this Proposal." The firm instead favors a minimum trading-volume threshold before an exchange keeps protected-quote status, which would preserve the rule for larger venues while letting brokers skip it at smaller ones.
SIFMA says data costs may not fall
SIFMA and its Asset Management Group filed a separate 25-page comment letter Monday, backing less venue proliferation but asking the SEC to settle downstream rules before any repeal takes effect. The group said the national best bid and offer would remain the execution benchmark even if displayed quotes lose Rule 611 protection, meaning brokers could still have to explain executions that miss it.
Market-data savings look uncertain too, because firms may still need consolidated data from every displayed venue for best-execution reviews even after cutting trading connections to some of them. SIFMA wrote that market data cost and complexity would not appear to be reduced.
Citadel Securities also warned that tokenized-equity venues could execute trades without matching better prices shown in conventional markets, which SIFMA said raises separate questions about whether tokenized shares are fungible with standard securities. The SEC has floated a volume threshold as a middle path: based on trading from September 2025 through February 2026, a 1% share of average dollar volume would leave protected quotes on seven exchanges, against six under a 2% cutoff. The SEC's June release set no date for a final vote.
Source: Finance Magnates
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