The Mississippi Secretary of State, Securities Division's Authority
Mississippi Attorney General Lynn Fitch and the Mississippi Secretary of State's Securities Division have authority under the Mississippi Securities Act (Miss. Code Ann. §75-71-101 et seq.) to investigate broker-dealer practices.
The Harm Requiring Regulatory Response
Mississippi retail investors face the compounded disadvantage of lower incomes, higher percentage of savings invested in discount brokers, and no state-level enforcement action on PFOF.
What State Regulators Should Do
The Mississippi Secretary of State, Business Services and Securities Division, in coordination with the Mississippi Attorney General's office, should:
- Open an investigation into whether broker-dealers serving Mississippi 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 Mississippi residents
- Contact NASAA to explore multistate coordination
- Issue investor education guidance about PFOF practices and how Mississippi investors can protect themselves
- Consider rulemaking under state securities law to require enhanced disclosure of PFOF arrangements affecting Mississippi retail investors
Contacting the Mississippi Secretary of State, Securities Division
Mississippi investors and advocates can contact the Mississippi Secretary of State, Business Services and Securities Division at https://www.sos.ms.gov/securities to report concerns and request regulatory action on PFOF practices affecting Mississippi residents.