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.