The U.S. Securities and Exchange Commission (SEC) has opened a path that could transform the trading of tokenized equities on public blockchains, according to a new analysis by Benchmark Equity Research. The June 11 proposal to rescind Rule 611 and Rule 610(e) of Regulation NMS — the trade-through framework that has governed every U.S. equity transaction since 2005 — is described by Benchmark as “the most consequential piece of regulation to impact the U.S. crypto space” this year.
In a note to investors, Benchmark analyst Mark Palmer explained that the current rules have been the primary legal obstacle preventing tokenized stocks from trading on automated market makers (AMMs). Rule 611, the Order Protection Rule, requires trading centers to avoid executing trades at prices inferior to protected quotations on other venues, effectively enforcing the national best bid and offer (NBBO). Rule 610(e) prohibits locked and crossed markets. These provisions, designed for traditional order-book exchanges, clash with the continuous pricing curves used by DeFi-based AMMs, which do not reference intermarket price protection systems.
If the rescission is adopted, tokenized and crypto equity exchanges could align more directly with existing equity market infrastructure. Benchmark identified Securitize as the most direct potential beneficiary, citing its role as a regulated tokenization platform and issuer infrastructure provider for tokenized securities — including BlackRock’s BUIDL initiative. Coinbase Global and Galaxy Digital were also named as beneficiaries due to their trading infrastructure, brokerage services, and digital asset market-making activity.
Despite the enthusiasm, Benchmark cautioned that significant hurdles remain unresolved, including exchange and alternative trading system (ATS) registration, as well as custody, clearing, and settlement frameworks for peer-to-peer or DeFi-native trading. The industry hopes a forthcoming innovation exemption will address these gaps. The SEC has opened a 60-day public comment period on the proposal, with a vote expected in early 2027.
