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Rules 611 and 610(e), established in 2005 under Regulation NMS, are at the center of the Blockchain Association's push for the SEC to rescind them. In a Monday letter, the group said the rules have failed to achieve their purposes and imposed substantial, unnecessary costs on market participants. It argued that tokenization strengthens the case for change as markets become faster, more automated and more interconnected. Rule 611 protects against trade-throughs in NMS stocks, while Rule 610(e) restricts locked and crossed quotations.
Why it matters
The proposal reaches beyond equity-market plumbing. The association says the rules inhibit tokenized market infrastructure, where traditional assets can be represented on public blockchains. It urged the SEC to weigh the benefits of tokenized securities when evaluating transactions instead of relying on a framework built for 2005 market conditions.
The group also asked the SEC to modernize best-execution guidance and recognize onchain execution as a compliant route to fair and efficient trading. That would give public-blockchain markets a clearer place in the regulatory framework.
Market impact
The SEC proposed rescinding both rules in June, and the public comment period ended Monday. The letter adds industry support for moving forward, but the immediate signal is regulatory positioning, not a final rule change.
Crypto and market-infrastructure investors will be watching whether the SEC accepts public-blockchain execution as compatible with fair and efficient markets. A simpler rule set could lower friction for tokenized markets, while execution and compliance requirements will shape how much activity moves onchain.
Frequently asked questions
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What do SEC Rules 611 and 610(e) cover?
Rule 611 protects against trade-throughs in NMS stocks, while Rule 610(e) restricts the display of locked and crossed quotations.
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When did the SEC rules at issue take effect?
Rules 611 and 610(e) were established in 2005 under Regulation NMS.
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Why does the Blockchain Association support rescinding the rules?
The group says they have failed to achieve their purposes and imposed substantial, unnecessary costs. It also argues that faster, more automated markets and tokenization strengthen the case for change.
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What does the group want the SEC to change besides the rules?
It wants the SEC to modernize best-execution guidance and recognize onchain execution as a compliant route to fair and efficient trading.
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What is the status of the SEC's NMS proposal?
The SEC proposed rescinding both rules in June, and the public comment period ended Monday. The Blockchain Association's letter supports moving forward.
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