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Citadel Securities to buy NYSE market-making unit of rival IMC Financial Markets

Citadel Securities to buy NYSE market-making unit of rival IMC Financial Markets

Electronic trading giant Citadel Securities will bolster its already huge presence at the New York Stock Exchange by buying the NYSE market-making business of smaller rival IMC Financial Markets, the companies said.

The deal would solidify Citadel Securities’ status as the largest designated market maker at the exchange. DMM firms are tasked with ensuring orderly trading of stocks listed on the NYSE. They gain certain trading privileges in return, and their blue-jacketed traders occupy a prominent position in the center of the exchange’s historic trading floor.

The deal is subject to approval by the NYSE. If it is completed, Citadel Securities would oversee trading for more than half of the securities listed on the exchange. It would also reduce the number of DMM firms at the Big Board to three from four, potentially raising concerns that the DMM business is becoming overly concentrated.

IMC, a global trading firm based in Amsterdam, runs the third-largest DMM business at the NYSE. Earlier this year, it oversaw trading in 18% of NYSE-listed stocks, while Citadel Securities had a 44% share, according to a NYSE spreadsheet viewed by The Wall Street Journal. The spreadsheet listed DMM assignments for more than 3,000 securities, including closed-end funds and preferred shares as well as the common stock of NYSE-listed companies.

An expanded version of this report appears at WSJ.com.

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Citadel Securities to Buy NYSE Market-Making Unit From IMC

Citadel Securities to Buy NYSE Market-Making Unit From IMC

(Bloomberg) — Citadel Securities plans to buy the market-making unit of smaller rival IMC Financial Markets, expanding its presence at the New York Stock Exchange.



a screen shot of a video game: NEW YORK, NEW YORK - MARCH 20: Traders work on the floor of the New York Stock Exchange (NYSE) on March 20, 2020 in New York City. Trading on the floor will temporarily become fully electronic starting on Monday to protect employees from spreading the coronavirus. The Dow fell over 500 points on Friday as investors continue to show concerns over COVID-19. (Photo by Spencer Platt/Getty Images)


© Photographer: Spencer Platt/Getty Images North America
NEW YORK, NEW YORK – MARCH 20: Traders work on the floor of the New York Stock Exchange (NYSE) on March 20, 2020 in New York City. Trading on the floor will temporarily become fully electronic starting on Monday to protect employees from spreading the coronavirus. The Dow fell over 500 points on Friday as investors continue to show concerns over COVID-19. (Photo by Spencer Platt/Getty Images)

The deal would shore up Citadel Securities’ position as the largest floor broker on the exchange, according to a statement. Terms weren’t disclosed.

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Citadel Securities, which oversees daily trading in more than 1,500 NYSE-listed securities, is among the designated market-makers responsible for ensuring that trading runs smoothly from the floor of the exchange.

Once run by Wall Street banks, the floor broker posts on the Big Board have been taken over by high-speed trading firms in recent years. Citadel Securities purchased its designated market-maker business in 2016.

Though the U.S. stock market is almost entirely electronic, NYSE touts its floor brokers as a key ingredient in keeping trading orderly and less volatile.

“We are thrilled to further extend our presence at the New York Stock Exchange,” Joe Mecane, head of execution services for Citadel Securities, said in the statement.

The Wall Street Journal reported the preliminary agreement earlier Thursday.

(Updates with background comments starting in fourth paragraph.)

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