Citadel Securities warns US securities regulator about risks of 24-hour trading

Citadel Securities, a market maker founded by billionaire investor Ken Griffin, recently submitted a comprehensive wish list for capital markets regulation to the U.S. Securities and Exchange Commission. Among the key points highlighted in the 29-page letter was the importance of addressing the risks associated with 24-hour trading proposed by various exchanges.

The market maker stressed the necessity of establishing a clear regulatory framework and robust market infrastructure to support round-the-clock trading. Specifically, Citadel called for consistency in dates related to extended trading hours, a move that has been announced by major exchanges like Nasdaq, Cboe Global Markets, and Intercontinental Exchange, which operates the New York Stock Exchange.

In addition to concerns surrounding 24-hour trading, the letter also put forth proposals for regulating different asset classes such as equities, derivatives, treasuries, credit, and digital assets. Citadel emphasized the need for both new regulations and revisions to existing rules to ensure a level playing field in the capital markets. The firm, which conducts trades amounting to approximately $570 billion daily, expressed the importance of addressing regulatory issues related to private rooms or alternative trading systems that restrict market participation.

According to Citadel, these private rooms raise significant concerns that require regulatory scrutiny, particularly concerning fair access and transparency rules. Furthermore, the firm advocated for greater transparency in the corporate bond market, urging faster disclosure of block trade sizes to improve market efficiency and integrity.

As the SEC considers Citadel’s proposals, the timing coincides with the recent appointment of Paul Atkins as the regulator’s chairman. Atkins, who previously served as an SEC member from 2002 to 2008 and is known for his business-friendly approach, is expected to oversee potential regulatory changes in response to firms like Citadel seeking reforms in the capital markets landscape.

While the SEC has yet to provide formal comments on Citadel’s specific proposals, the market maker’s wish list highlights a series of pressing issues in the financial markets that warrant regulatory attention. As the regulatory landscape continues to evolve, it is anticipated that discussions around market structure, transparency, and fairness will play a central role in shaping the future of capital markets regulation. Citadel’s engagement with the SEC underscores the ongoing dialogue between market participants and regulators to address complex challenges and ensure the integrity of the financial system.