SEC Proposes Scrapping Reg NMS Trade-Through Rule In Move To Ease Market Complexity
The SEC proposed rescinding Regulation NMS Rules 611 and 610(e), reopening debate over the US trade-through rule and locked/crossed quotes. Rule 611 bars trades from executing at worse prices than protected quotes on other venues, but critics say it also creates costly routing and compliance complexity across fragmented markets. The proposal would shift more emphasis to competition and execution quality rather than mandatory routing around protected prices. The change matters for tokenized securities and blockchain-based trading venues because they still must fit into legacy market-structure rules. The proposal does not directly favor crypto or tokenized equities, but it signals a willingness to reconsider older rules in light of newer technologies like on-chain settlement and programmable trading infrastructure. It is only a proposal, and exchanges, brokers, and trading firms are expected to contest it through the comment process.
