The Puerto Rico Office of the Commissioner of Financial Institutions's Authority

Puerto Rico Attorney General Domingo Emanuelli and the OCIF have authority under the Puerto Rico Uniform Securities Act (10 L.P.R.A. §860 et seq.) to investigate broker-dealer practices affecting Puerto Rico residents. Puerto Rico's unique financial regulatory status makes coordination with federal regulators essential.

The Harm Requiring Regulatory Response

Puerto Rico retail investors face unique vulnerabilities: limited SEC jurisdiction arguments, recovery from Hurricane Maria, and a financial crisis that has left many residents managing what savings they have through national discount brokers — all subject to PFOF practices.

What State Regulators Should Do

The Puerto Rico Office of the Commissioner of Financial Institutions (OCIF), in coordination with the Puerto Rico Attorney General's office, should:

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

Contacting the Puerto Rico Office of the Commissioner of Financial Institutions

Puerto Rico investors and advocates can contact the Puerto Rico Office of the Commissioner of Financial Institutions (OCIF) at https://ocif.pr.gov to report concerns and request regulatory action on PFOF practices affecting Puerto Rico residents.