Overview
- The SEC proposed rescinding Rule 611, the 2005 trade-through protection, in June and said removing it would cut compliance costs; Citadel formally opposed that plan in a comment letter submitted on Monday.
- Citadel called the SEC's economic analysis 'fatally flawed' and said estimated savings of about $250,000 per trading day are small compared with potential damage to market quality.
- The firm warned that removing the rule would let brokers fill customer orders off public exchanges more often, which could reduce displayed liquidity and weaken price discovery by shrinking activity on transparent venues.
- As an alternative to full repeal, Citadel proposed a minimum trading-volume threshold for exchanges to earn protected-quote status so small, low-liquidity venues would not force routing to thin markets.
- The proposal remains under review in the SEC comment process and could affect retail investors, market-data needs, and how tokenized or private trading venues compete with public exchanges.