SEC finally tells Rule 611 to touch grass, and tokenized stocks are already stretching 🌱

The US Securities and Exchange Commission has proposed rescinding Rules 611 and 610(e) of Regulation NMS, the trade-through framework that has shaped US equity market structure since 2005. A 60-day public comment period will follow publication in the Federal Register.

Rule 611, commonly known as the Order Protection Rule, requires trading venues such as stock exchanges and broker-dealers to prevent "trade-throughs," or executions at worse prices when better prices are available on another exchange. Galaxy Digital's Head of Firmwide Research, Alex Thorn, said the rule is "one of the biggest structural barriers" to tokenized US equities trading in decentralized finance. The SEC also proposed scrapping Rule 610(e), which concerns locking and crossing quotations in US equity markets.

"This proposal is intended to simplify market structure and reduce costs for market participants while allowing competition, innovation, and other market forces to shape the continuing evolution of our equity markets. I look forward to reviewing public comments as we take a careful, deliberative approach to avoid repeating the same mistakes that brought us here," SEC Chairman Paul Atkins said in a statement on June 11, 2026.

Thorn argued the move is "one of the biggest unlocks yet for tokenized stocks." He said automated market makers (AMMs) cannot comply with the rules by design. "An AMM can't route intermarket sweep orders. can't ingest SIP data with latency guarantees. can't halt a swap because a better quote exists on Nasdaq. any pool in a tokenized NMS stock would commit trade-throughs constantly and arguably be an illegal trading center," he wrote. He added that "610(e) is the same story. AMM prices drift continuously with flow and would routinely lock or cross the displayed NBBO, which venues are currently required to prevent."

Under the proposed framework, order handling for tokenized US equities would be governed by the broker-level best execution duty under FINRA Rule 5310, a principles-based standard rather than a trade-by-trade enforcement regime. Thorn noted that the standard is "principles-based rather than enforced trade-by-trade" and argued that it can accommodate AMMs in a way Rule 611 could not.