Squarepoint Affiliate Starts Market-Making Arm to Rival Citadel

An affiliate of Squarepoint is starting an electronic-trading unit, taking a page out of Citadel LP’s and Two Sigma Investments’ playbooks by operating a market maker alongside a hedge fund business.

The new broker-dealer business will be called STG Securities, according to people with knowledge of the matter. It will run separately from Squarepoint’s hedge fund, buying and selling securities using its own capital, the people said, asking not to be named discussing a private matter.