The SEC proposed on 11 June to rescind two pillars of Regulation NMS for listed stock trading, the Rule 611 trade through rule and Rule 610(e). It opened a 60 day comment period. Rule 611 bars a trading venue from executing an order at a price worse than the best automated quote displayed at another venue, the National Best Bid and Offer (NBBO). For an institutional reader the headline is a simpler, less prescriptive equity market structure. But it also removes one of the obstacles to DeFi trading of tokenized equities via automated market makers.
Despite the move fitting with the Crypto Task Force agenda, that is only one of the drivers, with the primary case resting on market fragmentation, and predating crypto by twenty years. Chairman Paul Atkins co-authored the 2005 dissent to Reg NMS and has opposed the trade through rule since its adoption.
Regarding fragmentation, today there are 17 national exchanges compared to four pre-NMS. There’s an argument that Rule 611 lowered the barrier to entry because if any new exchange posts a protected quote, the whole market is compelled to connect to it and trade. The SEC blames this for a proliferation of near identical exchanges, dispersed displayed liquidity, and the latency arms race that produced modern high frequency trading. It notes that no exchange held more than a 20 percent share in the first half of 2025 while off exchange volume passed 50 percent. Fragmentation, the SEC argues, now hurts the very institutional orders the rule was meant to protect, scattering child orders across venues and making trading intentions easier to detect.
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