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Citadel Securities -- (big) Market Maker

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Ken Griffin Has Another Money Machine to Rival His Hedge Fund

Providing Liquidity

By targeting big banks, regulators hampered their ability to provide liquidity, JPMorgan Chase & Co. asset management chief Mary Erdoes said last year at the Bloomberg Global Business Forum, where Griffin was a guest.

They’ve been replaced by firms like Citadel Securities that are less regulated, and the market doesn’t yet know if they’ll be reliable partners in a crisis, she said. “It will be a very different playbook when we go through the next liquidity crunch.”

In response, Griffin said his firm was well-positioned to provide liquidity because it captures and processes data better than banks, allowing Citadel Securities to offer prices with more confidence during times of market stress.

The exchange highlighted a sometimes difficult relationship between Citadel Securities and big banks.

Citadel was part of a group of investors and market participants that won a $1.9 billion settlement from some of Wall Street’s biggest financial institutions after alleging that the banks had conspired to limit competition in the credit-default swaps market and sabotage a CDS exchange planned by Citadel and CME Group Inc.

The banks were accused of agreeing to boycott the exchange as long as Citadel was involved.

Griffin hasn’t shown much sympathy for the competition’s woes.

“The disruptive innovation that has taken place within the equities market has created winners and losers,” he said in written testimony for a 2014 hearing of the Senate Banking Committee. It shouldn’t be a surprise that legacy participants “publicly yearn for the old days when they extracted disproportionate rents from investors on the basis of anti-competitive business practices,” Griffin added.

The regulatory overhaul that followed the financial crisis created a more level playing field, said Ahmed, the Citadel spokesman.

“This transformation of the markets has resulted in more liquidity, better pricing and lower transaction costs for end investors,” he said.

Order Flow

Market-makers pay rebates to brokerages for routing them retail client orders, which tend to be the most profitable trades because they carry the least risk.

Citadel Securities has been among the most aggressive in using rebates to win retail orders. Some market participants say the payments promote conflicts of interest and should be banned, but others say they improve order execution for retail investors.

In 2017, the firm agreed to a $22.6 million settlement with the Securities and Exchange Commission over allegations that it had misled clients over a small portion of trades in its high-frequency equities business. That didn’t slow it down much. Citadel Securities now controls about 40% of the U.S. retail equity market share.

Still, the securities business continues to expand rapidly and is now vying to become one of the Fed’s primary dealers. These select firms trade directly with the New York Fed as it implements monetary policy, and they’re required to participate in U.S. Treasury auctions. Such a move might invite fresh scrutiny.
Antwort auf Beitrag Nr.: 62.143.406 von faultcode am 12.12.19 15:17:57
Zitat von faultcode: "Keine Gebühren für ausländische Dividendenzahlungen (vorher 5,90 EUR)"
--> das betrifft mich mit breiter Streuung und damit oft Kleckerbeträgen aus Auslands-Dividenden nach Quellensteuer (gefühlt) besonders positiv

--> dazu ist mit noch ganz allgemein eingefallen:

• da scheint global Bewegung ins Spiel zu kommen, nachdem in den USA nach dem Markt-Durchbruch von Robinhood mittlerweile vielfach "no order fee" bei Standard-/hochliquiden Aktien herrscht (was aber dann kein Börsenhandel mehr ist, sondern Handel mit Market maker Citadel und Co. im Hintergrund)

--> Citadel Securities ist vermutlich schon mittendrin im europäischen Retail-Handel (im Hintergrund): Ui, Ui, Ui :eek:

What Bloomberg Misses About Citadel Securities

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