The U.S. Securities and Exchange Commission has proposed rescinding Rules 611 and 610(e) of Regulation NMS, a move that could remove a critical structural barrier for tokenized U.S. equities traded in decentralized finance. The proposal, announced on June 11, 2026, seeks to modernize equity market structure by doing away with trade-through protections and locked market rules that have been in place since 2005.
What the SEC is changing: Rule 611 currently requires trading venues to route orders to the exchange with the best displayed price, preventing “trade-throughs” where an order executes at a price worse than the best available quote. Rule 610(e) prohibits locked and crossed quotations, forcing markets to avoid matching or crossing the national best bid or offer. The SEC now views these mandates as outdated given advances in market speed and competition. Chairman Paul S. Atkins said the plan “is intended to simplify market structure and reduce costs for market participants while allowing competition, innovation, and other market forces to shape the continuing evolution of our equity markets.”
Why this matters for crypto: Analysts, including Galaxy Digital’s Alex Thorn, argue that the existing rules make it nearly impossible for automated market makers (AMMs) to support tokenized stock trading. AMMs execute trades against liquidity pools and bonding curves at block-time granularity, making real-time compliance with national best price obligations unworkable. “An AMM cannot comply with 611 by construction,” Thorn noted, adding that Rule 610(e) creates similar issues since pool prices can frequently lock or cross traditional market quotes.
Removing Rules 611 and 610(e) would therefore open a path for DeFi platforms to list tokenized versions of equities. However, the proposal does not automatically greenlight such products. Tokenized stocks still face separate hurdles related to exchange registration, clearing, settlement, investor rights, and best-execution duties under FINRA Rule 5310. The SEC has been exploring an innovation exemption that could allow digital versions of public equities with full shareholder rights, though Commissioner Hester Peirce has indicated any exemption would be narrow in scope.
The public comment period will last 60 days after publication in the Federal Register, after which the SEC may revise or finalize the rescission. The outcome will be closely watched by tokenization platforms, DeFi market makers, and international regulators eyeing the U.S. approach to crypto-linked financial products.
