Crypto News
The SEC proposed rescinding Regulation NMS Rules 611 and 610(e) on June 11, removing the requirement that trading centers route equity orders to the venue displaying the best protected quote. The Commission framed the move as a way to reduce costs and let competition and innovation shape the next phase of US equity markets.
Why it matters
Rule 611 — the order-protection rule — is the backbone of the National Market System's best-execution regime. It forces every venue to honor the displayed top-of-book on protected exchanges, which today means routing through a handful of incumbent lit pools. Tokenized US equities have been forced to plug into that same infrastructure: on-chain venues either route back to a protected quote or accept regulatory friction. Scrapping the rule lets a tokenized stock platform decide where to execute based on price, latency, and settlement venue without paying for the public quote it doesn't need.
Market impact
The proposal is open for comment, not yet final. If adopted, it would lower the structural cost of running an on-chain or hybrid equity venue, expand the addressable market for tokenization platforms, and weaken the moat of the incumbent exchanges that built their economics around Rule 611 routing. Watch for the comment-period close and any litigation risk — established exchanges have already signaled they will challenge competitive erosion of their protected-quote model.
Frequently asked questions
-
What is SEC Regulation NMS Rule 611?
Rule 611 is the order-protection rule under Regulation NMS. It requires trading centers to prevent trade-throughs by routing executable orders to the venue displaying the best protected quote, and it is the mechanism that anchors the National Market System's best-execution regime.
-
What did the SEC actually propose on June 11?
The SEC proposed rescinding Regulation NMS Rules 611 and 610(e), eliminating the order-protection requirement and the related prohibition on internalizing quotes without displaying them. The Commission framed the change as a way to reduce costs and let competition shape equity-market evolution.
-
Why does this matter for tokenized US stocks?
Tokenized stock platforms have had to route back to incumbent lit exchanges to stay compliant with Rule 611. Removing the rule means an on-chain or hybrid venue can execute orders based on price, latency, and settlement without paying for the public protected quote.
-
Is the rule rescission final?
No. The June 11 action is a proposed rulemaking open for public comment. It only takes effect after the SEC reviews comments, issues a final rule, and survives any legal challenge from affected incumbents.
-
Which incumbents are most exposed if Rule 611 is scrapped?
The exchanges that built their economics around protected-quote routing and the market-making models that depend on displayed top-of-book rebates are most exposed. Expect litigation from any venue whose structural moat erodes under the new regime.
CryptoSlate
CoinDesk
CoinTelegraph
Altcoin Daily
WatcherGuru