Overview
- The Securities and Exchange Commission published a proposal on June 11 to rescind Regulation NMS Rules 611 and 610(e) and related language in Rule 600(b), and the rulemaking is open for public comment through August 17.
- Rule 611, often called the trade-through rule, stops trades from executing at worse prices when another venue shows a better quotation, and Rule 610(e) restricts locked and crossed quotations where bids and offers match or overlap.
- The SEC says those 2005-era rules now add routing complexity and costs in a fast, automated, fragmented market and that removing them would let competition and brokers’ best-execution duties determine where orders go.
- Market participants are lining up to shape the outcome: Robinhood has publicly backed rescission, exchanges and broker-dealers are expected to oppose or seek changes, and regulators may consider targeted exemptions or pilot programs during review.
- The proposal would not by itself legalize tokenized equities but could reduce a structural obstacle for blockchain-based trading venues; final action could take months and might extend into 2027 depending on comments and any follow-on relief.