The Securities and Exchange Commission submitted a proposal on June 11 to rescind Rule 611 and Rule 610(e) of Regulation NMS. The move targets long-standing requirements on trade-throughs and locked quotes in US equity markets. It could ease barriers for blockchain-based trading of tokenized stocks.
The proposal would eliminate the trade-through rule that requires trading centers to avoid executions at prices worse than protected quotes displayed elsewhere. It would also remove restrictions on locked and crossed quotations.
Alex Thorn, head of research at Galaxy Digital, said an automated market maker cannot comply with Rule 611 by construction because it executes against a bonding curve at the pool price. Christopher Perkins, chief executive of 250 Digital Asset Management, called the change a major unlock for decentralized finance.
SEC Chairman Paul Atkins described the review as addressing unintended consequences of the 2005 rules. The agency aims to simplify market structure and encourage competition.
Tokenized equities would still face questions on registration, settlement, and investor rights during the comment period. SIFMA welcomed the review but urged study of effects on execution quality and transparency.
