Jane Street faces $15 billion loss as Citadel Securities challenges SEC rule

Jane Street reportedly incurred a $15 billion loss in July following a margin call that forced the firm to sell a significant portion of its public equities. This marks the hedge fund’s first monthly downturn in a decade, highlighting potential directional risks as the boundaries between market makers, proprietary traders, and hedge funds continue to blur.

Separately, Citadel Securities has formally challenged a proposal by the SEC to eliminate Rule 611 of Regulation NMS, known as the trade-through rule. The firm argues that rescinding this rule, which prevents brokers from executing trades at prices worse than the best available on other exchanges, could diminish market liquidity and weaken price discovery. Citadel Securities characterized the SEC’s economic justification for the change as “fatally flawed,” suggesting that any cost savings would be outweighed by the negative impact on market quality and retail investors.