Best Company: Citadel Securities
Citadel Securities won Best Company in the 2020 Markets Choice Awards.
Markets Media caught up with Jamil Nazarali, Global Head of Business Development at Citadel Securities, to learn more.
Please describe the essence/ethos of Citadel Securities — what are the primary characteristics and capabilities, and how does it differentiate vs. peers?
Citadel Securities is a leading global market maker that provides liquidity in a variety of products across fixed income, equities, derivatives, ETFs and FX. Our strengths in risk management, quantitative analytics and technology enable us to serve the liquidity needs of our counterparties consistently across a variety of market conditions. We pride ourselves in driving innovations that create better markets for investors through increased competition, reduced risk and lowered transaction costs.
What are recently completed and/or ongoing initiatives to be a better global market maker?
Our continuous and relentless investment in technology and talent have always been at the core of our success. Over the past five years we have more than doubled our headcount and have become a top liquidity provider in a number of new asset classes. Much of this growth has been client driven – we expand into markets and asset classes where our strengths in technology, risk management and precision pricing can make the biggest impact on improving liquidity. For example, several years ago, we began making markets in off-the-run U.S. treasuries so we could provide liquidity to our clients where they needed it most. Our participation has improved liquidity conditions, especially during the recent volatility when we were able to provide more consistent and competitive pricing than other dealers. We’ve also expanded our offering for institutional investors significantly since entering the space with the launch of our swaps business in 2014, adding U.S. Treasuries, ETFs, equity portfolio trading, ADRs and most recently, block options liquidity.
We also work with exchanges and trading partners to introduce and support innovations that help capital markets function better for both institutional and retail investors. For example, through our role as a Designated Market Maker on the New York Stock Exchange, we helped facilitate the only two direct listings that have come to market on the NYSE so far and have become a trusted resource to companies that are considering entering the public markets through this innovative new process.
Additional examples include our role as a founding member of MEMX, a planned new U.S. equity exchange that is helping drive innovation and operational improvements in the market, as well as our efforts to help CBOE, NYSE and Nasdaq introduce new risk controls that will help reduce operational risk for all market participants.
How has Citadel Securities adapted to the market volatility we’ve seen in recent months? How is this a challenge and how is it an opportunity.
The recent period of extraordinary volatility demonstrated the benefits of electronic trading in a profound way. The markets worked incredibly well because electronic market makers like Citadel Securities stepped up and provided more liquidity than ever before. While many traditional market makers struggled to continue providing liquidity during the market disruption, electronic market makers distinguished themselves by providing consistent and competitive pricing and were able to transition much more effectively to a decentralized and distributed work environment.
We are incredibly proud of how we were able to deliver exceptional execution quality and liquidity to our clients and the market throughout this challenging time. We provided more than $400 million in price improvement on retail equity and options trades in March alone, helped companies that raised more than $4 billion in capital enter the public markets since the closure of the NYSE trading floor, and facilitated critical fixed income transactions that helped clients raise capital to provide relief to families impacted by COVID-19. We also helped our clients adapt to trading floor closures and worked with our partners to develop innovative solutions for addressing market needs such as by working with the NYSE to develop the capability to remotely open IPOs for the first time in history.
All of this has been very rewarding and has created new opportunities for our business, which we are looking forward to pursuing.
How does Citadel Securities invest in its people and how/why is that important?
We believe there are three key factors that drive successful and rewarding careers. The first is having extraordinary colleagues to learn from, the second is having the opportunity and resources to make an impact and the third is having a culture of meritocracy, which rewards that impact with additional growth opportunities. Investing heavily and consistently in all three of these areas not only helps us provide an unparalleled growth environment for our team members, but also fuels innovation and enables us to accomplish great things that other firms simply cannot.
Personally, I’ve been at Citadel Securities for almost a decade and have been involved in a number of impactful efforts that would have taken years at other organizations but came together quickly and seamlessly thanks to our unique culture and incredibly talented team. To give you a recent example, as part of our business continuity strategy for the COVID crisis, we were able to build a state-of-the-art remote trading floor with capacity for up to 50 traders from scratch in just over a week. This required around the clock work and the efforts of many team members around the world but we were able to pull it off without a hitch, all while providing uninterrupted liquidity to our clients amid record breaking volumes and volatility.
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