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Iowa Regulatory Action

Iowa Insurance Division, Securities Bureau: What Iowa Financial Regulators Should Do About Citadel

The Iowa Insurance Division, Securities and Regulated Industries Bureau has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 550,000 Iowa retail investors. Here is what state regulators should do — and why.

The Iowa Insurance Division, Securities Bureau's Authority

Iowa Attorney General Brenna Bird and the Iowa Insurance Division's Securities Bureau have authority under the Iowa Uniform Securities Act (Iowa Code Chapter 502) to investigate broker-dealer practices.

The Harm Requiring Regulatory Response

Iowa's agricultural economy means many retail investors are farming families managing savings and retirement accounts through discount brokers — all subject to undisclosed PFOF arrangements.

What State Regulators Should Do

The Iowa Insurance Division, Securities and Regulated Industries Bureau, in coordination with the Iowa Attorney General's office, should:

  • Open an investigation into whether broker-dealers serving Iowa 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 Iowa residents
  • Contact NASAA to explore multistate coordination
  • Issue investor education guidance about PFOF practices and how Iowa investors can protect themselves
  • Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Iowa retail investors

Contacting the Iowa Insurance Division, Securities Bureau

Iowa investors and advocates can contact the Iowa Insurance Division, Securities and Regulated Industries Bureau at https://iid.iowa.gov/securities to report concerns and request regulatory action on PFOF practices affecting Iowa residents.

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