SEC Proposes Rescinding Rule 611, Clearing Major Barrier to Onchain Tokenized Stock Trading

According to the SEC, on June 11, the Commission voted to propose rescinding Rule 611 and 610(e) of Regulation NMS, opening a 60-day public comment period. Rule 611, the order protection rule, bars trading centers from executing trades at prices worse than protected quotes on other venues.

Galaxy Digital head of firmwide research Alex Thorn called the proposal one of the biggest unlocks for tokenized stocks, arguing the rule made compliant onchain equity trading effectively impossible because automated market makers cannot reference and respect the national best bid and offer at execution as Rule 611 demands. With the rule removed, order-handling obligations would fall to FINRA Rule 5310, a principles-based standard accommodating AMM structures that the prior rule could not.