KCG sells NYSE market maker to Citadel

Deal sees second NYSE market maker sold to HFT firm in two weeks.

KCG Holdings is to sell its market making business to high-frequency trader Citadel, the second major market maker disposal in recent weeks.

Last week, Barclays announced it was selling its New York Stock Exchange (NYSE) market maker division to another high-frequency trader, GTS Securities.

Jamil Nazarali, head of Citadel Execution Services, said the deal was part of the firm’s aggressive expansion plans and its commitment to provide deep liquidity to institutional and retail investors.

“We are constantly seeking innovative ways to improve the market for investors, and we are pleased to bring our experience and technology to the NYSE for the benefit of NYSE-listed companies,” he added.

As part of the move, KCG’s designated market maker team will join Citadel Securities.

The deal is expected to close in the second quarter of 2016 and no financial details have been disclosed.

The sale of Barclays’ market making business on the NYSE last week marked the final exit of banks from market making on the exchange. High-frequency trading firms now dominate trading in New York.

KCG was already widely considered to be a high-frequency trader following its creation in 2013 after a merger of Knight Capital and Getco.