SEC Yanks Two Stock-Trading Rules; AMMs Finally Get to Be the "Better" Quote 🧾

The U.S. Securities and Exchange Commission proposed rescinding Rules 611 and 610(e) of Regulation NMS on June 11, 2026, the long-standing trade-through and locked/crossed-quote provisions that have governed U.S. equity trading since 2005. SEC Chairman Paul Atkins said the 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." He added that he looks "forward to reviewing public comments as we take a careful, deliberative approach to avoid repeating the same mistakes that brought us here." The proposal will be open for a 60-day public comment period following its publication in the Federal Register.

Rule 611, the Order Protection Rule, requires trading venues to prevent "trade-throughs," in which an order is executed at a worse price when a better price is available on another exchange. Rule 610(e) addresses locking and crossing quotations in U.S. equity markets. Together, the two rules have effectively required that every trade in a national market system (NMS) stock respect the national best bid and offer (NBBO).

Galaxy Digital Head of Firmwide Research Alex Thorn said the proposal represents "one of the biggest unlocks yet for tokenized stocks," calling the existing framework "one of the biggest structural barriers to tokenized US equities trading in DeFi." Thorn explained that automated market makers (AMMs) cannot comply with these 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 added that AMM "prices drift continuously with flow and would routinely lock or cross the displayed NBBO, which venues are currently required to prevent."

Thorn said that without Rule 611, broker-level best execution duties under FINRA Rule 5310 would govern order handling instead, a principles-based standard that he argued can accommodate AMMs. The SEC's proposal comes as the agency continues its "Project Crypto" initiative launched in August 2025, aimed at building rules for the use of digital assets and blockchain in U.S. markets. The commission is now soliciting public input on the rule change before determining next steps.