TheBlock
Benchmark Equity Research told investors on Monday that the Securities and Exchange Commission’s June 11 proposal to rescind two-decade-old market-structure rules is the most consequential piece of US crypto regulation to land this year, on the view that it removes the primary legal obstacle to tokenized equities trading on automated market makers and other decentralized finance rails.
Analyst Mark Palmer flagged that the proposed rescission targets Rule 611, the Order Protection Rule, and Rule 610(e) of Regulation NMS — the trade-through framework that has governed routing and execution across every US equity venue since 2005. Rule 611 requires trading centers to avoid executing at prices inferior to protected quotations displayed elsewhere, while Rule 610(e) prohibits locked and crossed markets. Both effectively force venues to honor the NBBO at the moment of execution.
Why it matters
AMMs execute trades against continuous pricing curves rather than routed order books and do not natively reference intermarket price-protection systems like the NBBO — making Rule 611 a structural barrier to listing tokenized stocks on DeFi-native venues. Palmer argues that scrapping the trade-through framework would, for the first time, let tokenized equity platforms align with existing market infrastructure without forking the execution model to satisfy legacy equity rules. The SEC has framed the proposal as a simplification and cost-reduction exercise, but the crypto industry is reading it as a permission slip.
Market impact
Benchmark’s note identifies a short list of named beneficiaries: Securitize as the most direct, citing its regulated tokenization platform role and its issuer infrastructure work on BlackRock’s BUILD initiative, plus Coinbase Global and Galaxy Digital for trading infrastructure, brokerage, and digital-asset market making. Open questions — exchange and ATS registration, custody, clearance and settlement for peer-to-peer and DeFi-native trading — remain unresolved, with the industry pointing to a forthcoming innovation exemption to fill the gaps.
Frequently asked questions
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What did the SEC propose on June 11 regarding Regulation NMS?
The SEC proposed rescinding Rule 611 (the Order Protection Rule) and Rule 610(e) of Regulation NMS, the trade-through framework that has governed routing and execution across every US equity venue since 2005.
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Why would scrapping Rule 611 matter for crypto and tokenized equities?
Rule 611 requires trading centers to avoid executing at prices inferior to protected quotations on other venues. Automated market makers run continuous pricing curves instead of routed order books and do not reference the NBBO, so the rule has been a structural barrier to listing tokenized stocks on DeFi-native venues.
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Which companies did Benchmark name as direct beneficiaries?
Benchmark identified Securitize as the most direct beneficiary, citing its role as a regulated tokenization platform and issuer infrastructure provider on BlackRock’s BUILD initiative, plus Coinbase Global and Galaxy Digital for trading infrastructure, brokerage, and digital-asset market making.
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What unresolved issues remain after the proposal?
Benchmark flagged open questions on exchange and alternative trading system registration, custody, and clearance and settlement frameworks for peer-to-peer and DeFi-native trading. The industry is counting on a forthcoming SEC innovation exemption to address them.
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When could the rescission take effect?
The SEC opened a 60-day public comment period on the proposal. Benchmark expects a final vote on rescission to occur in early 2027.
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