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Indiana Regulatory Action

Indiana Secretary of State, Securities Division: What Indiana Financial Regulators Should Do About Citadel

The Indiana Secretary of State, Securities Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 1.2 million Indiana retail investors. Here is what state regulators should do — and why.

The Indiana Secretary of State, Securities Division's Authority

Indiana Attorney General Todd Rokita and the Indiana Securities Division have jurisdiction under the Indiana Uniform Securities Act (I.C. 23-19-1-1 et seq.) to investigate market maker conflicts affecting Indiana residents.

The Harm Requiring Regulatory Response

Indiana's industrial heartland has a large working-class retail investor base with significant exposure to 401(k) investments routed through PFOF-dependent brokers.

What State Regulators Should Do

The Indiana Secretary of State, Securities Division, in coordination with the Indiana Attorney General's office, should:

  • Open an investigation into whether broker-dealers serving Indiana residents are meeting best execution obligations under state securities law
  • Issue a formal inquiry to major PFOF-dependent brokers about their routing arrangements with Citadel Securities and the execution quality they achieve for Indiana residents
  • Contact NASAA to explore multistate coordination
  • Issue investor education guidance about PFOF practices and how Indiana investors can protect themselves
  • Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Indiana retail investors

Contacting the Indiana Secretary of State, Securities Division

Indiana investors and advocates can contact the Indiana Secretary of State, Securities Division at https://www.in.gov/sos/securities to report concerns and request regulatory action on PFOF practices affecting Indiana residents.

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