Citadel Securities LLC v. SEC, No. 20-1424 (D.C. Cir. 2022)Annotate this Case
In 2005, the SEC promulgated a series of initiatives dubbed “Regulation NMS,” which stands for National Market System. One of those initiatives established the concept of the “[n]ational best bid and national best offer,” which are the best bid and best offer for a security, from the taker’s point of view, across all U.S. securities exchanges. Regulation NMS also classifies some providers’ orders as “protected” bids or offers (collectively “protected quotations”). Protected quotations are “automated,” publicly displayed, and the national best bid or offer.
At issue is not whether companies like Petitioner may seek advantages in the market by using advanced technology and ingenious trading strategies, but instead whether the SEC may allow an exchange to innovate, with the D-Limit order, in a way that offers new opportunities to long-term investors.
The D.C. Circuit approved the SEC's rule, finding that substantial evidence supported the SEC’s findings and the SEC’s conclusions were reasonable and reasonably explained.