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Kansas Regulatory Action

Kansas Securities Commissioner: What Kansas Financial Regulators Should Do About Citadel

The Kansas Office of the Securities Commissioner has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 500,000 Kansas retail investors. Here is what state regulators should do — and why.

The Kansas Securities Commissioner's Authority

Kansas Attorney General Kris Kobach and the Kansas Securities Commissioner have jurisdiction under the Kansas Securities Act (K.S.A. 17-12a101 et seq.) to investigate market maker conflicts.

The Harm Requiring Regulatory Response

Kansas retail investors have limited access to financial advocacy resources and depend primarily on national discount brokers, all of which route order flow to Citadel Securities.

What State Regulators Should Do

The Kansas Office of the Securities Commissioner, in coordination with the Kansas Attorney General's office, should:

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

Contacting the Kansas Securities Commissioner

Kansas investors and advocates can contact the Kansas Office of the Securities Commissioner at https://www.ksc.ks.gov to report concerns and request regulatory action on PFOF practices affecting Kansas residents.

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