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Vermont Regulatory Action

Vermont Department of Financial Regulation, Securities Division: What Vermont Financial Regulators Should Do About Citadel

The Vermont Department of Financial Regulation, Securities Division has jurisdiction to investigate Citadel Securities' payment for order flow practices affecting an estimated 115,000 Vermont retail investors. Here is what state regulators should do — and why.

The Vermont Department of Financial Regulation, Securities Division's Authority

Vermont Attorney General Charity Clark and the Vermont DFR Securities Division have authority under the Vermont Uniform Securities Act (9 V.S.A. §5101 et seq.) to investigate broker-dealer practices.

The Harm Requiring Regulatory Response

Vermont's progressive investor community places high value on transparency and ethical business practices — values fundamentally at odds with Citadel's undisclosed PFOF arrangements.

What State Regulators Should Do

The Vermont Department of Financial Regulation, Securities Division, in coordination with the Vermont Attorney General's office, should:

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

Contacting the Vermont Department of Financial Regulation, Securities Division

Vermont investors and advocates can contact the Vermont Department of Financial Regulation, Securities Division at https://dfr.vermont.gov/financial-product/securities to report concerns and request regulatory action on PFOF practices affecting Vermont residents.

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