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The United States Securities and Exchange Commission proposed on June 11 to repeal Rules 611 and 610(e) of Reg NMS. The move opens a 60-day public comment period and could reshape U.S. equity market rules by early 2027. TD Cowen managing director Jaret Seiberg said the revised regulation may be completed in the first quarter of 2027.
Rule 611, also called the trade-through or order protection rule, bars orders below the best available prices on other trading venues. Rule 610(e) prevents exchanges from posting quotes that lock or cross competing markets.
Together, the rules aimed to prevent poor execution prices across fragmented exchanges. The SEC said those protections no longer serve the market as intended. Chairman Paul Atkins has long opposed Rule 611. In a statement tied to Wednesday’s vote, he called the proposed changes overdue.
Atkins said the rules have ‘hindered’ market growth. He also argued that competition and market forces could have produced better results.
The proposal did not emerge without prior discussion. The SEC held two public consultations on equity-market structure last year. During those meetings, the agency gathered input from exchanges, broker-dealers, and market makers. Atkins said the process began transparently before the proposal moved forward.
His view echoed an earlier dissent from the time Rule 611 was adopted. He and former Commissioner Cynthia Glassman argued then that the Commission had replaced market competition with its own assumptions. That dispute now returns as the SEC considers a broad change to Reg NMS. The proposal sits within a wider effort to revisit rules that shape public markets.
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What does this mean for tokenized stock trading on decentralized exchanges? According to Galaxy Digital Research chief executive Alex Thorn, the proposal could open one of the biggest paths yet for tokenized stock trading. The issue matters as automated market makers cannot comply with Rule 611.
AMMs use bonding curves and match trades at available pool prices during block validation. They do not pause to check whether another market offers a better price. Even so, the repeal would not make tokenized equities fully operational. Other securities rules would still apply.
Registration on an exchange or alternative trading system would remain necessary. Clearance, settlement, and other centralized market requirements would also stay in place. The proposal would remove two rules, but it would not remove the wider securities framework. That structure still governs how tokenized equities could move forward in practice.
The SEC’s proposal to repeal Rules 611 and 610(e) marks a major shift in U.S. market structure. While the change may open new doors for tokenized equities and decentralized trading, key securities rules will still apply. Market participants should closely monitor the comment period and the next steps.
