Overview
- The SEC proposed removing Regulation NMS Rules 611 and 610(e), and opened a 60-day public comment period after publishing the proposal.
- Rule 611 stops trades that execute at prices worse than protected quotes on other venues and Rule 610(e) bars locked or crossed displayed quotes, protections the agency says add complexity and cost.
- Industry analysts say the change would remove a technical roadblock for DeFi automated market makers because AMMs trade against liquidity pools and cannot route or check quotes exchange-by-exchange in real time.
- Major legal and operational gaps would remain even if the rules are rescinded, including exchange or ATS registration, clearing and settlement processes, and ensuring tokenized shares carry ordinary investor rights like voting and dividends.
- Market watchers expect final SEC action around Q1 2027 and say the agency may grant limited exemptive relief for early tokenization pilots before any formal rule repeal, a step that could let test projects proceed sooner and lower some trading costs.