The U.S. Securities and Exchange Commission (SEC) has proposed rescinding two key rules of Regulation NMS. The initiative aims to reduce market participants’ costs and encourage innovation.
Officials plan to revoke rules 611 and 610(e). The first prohibits trades at prices less favorable than the best offers on other platforms. The second limits the display of quotes that block or cross price values on other exchanges.
SEC Chairman Paul Atkins stated that these rules have been in place for 20 years but have become an obstacle to market development over time. He believes the rules have created “unintended consequences” that hinder growth.
The public discussion of the proposal will last 60 days following its publication in the Federal Register. Afterward, the Commission will make a final decision on revising the rules.
Galaxy Digital called the agency’s decision a crucial step for the development of DeFi. According to Alex Thorn, head of research, current rules physically prevent automated market makers (AMM) from trading tokenized stocks. Decentralized protocols operate based on mathematical formulas and cannot account for liquidity on external platforms in real-time.
the SEC just proposed rescinding Rule 611 of Reg NMS, the trade-through rule that has defined US equity market structure since 2005
this is a tradfi story, yes, but this is also one of the biggest unlocks yet for tokenized stocks 👇 pic.twitter.com/T0PJvWxysI
— Alex Thorn (@intangiblecoins) June 11, 2026
“An AMM cannot halt a trade because the price is better on Nasdaq. Once the rules are rescinded, tokenized stocks can legally trade in DeFi pools,” Thorn explained.
Instead of strict restrictions, the SEC plans to adopt a flexible approach based on the principle of “best execution” of trades.
The changes are expected to be implemented in the first quarter of 2027. Until then, the Commission may launch pilot projects on tokenization, granting participants temporary exemptions from existing rules.
In May, SEC Commissioner Hester Peirce urged the crypto industry to temper expectations regarding an “innovation exemption” for trading tokenized stocks. She stated that the regulator does not plan to allow the issuance of synthetic assets.
