The SEC Aims to Clear the Way for On-Chain Tokenized Stocks, Proposes Repeal of Two Rules under the National Market System Regulation

BlockBeats News, June 12th, the SEC proposed to eliminate Rule 611 of Regulation NMS (Order Protection Rule) and Rule 610(e) (Locking/Crossing Market Rules).

Rule 611 requires trading venues to prevent trades from occurring at prices inferior to those displayed on other trading platforms. This rule has been a major structural barrier for the trading of tokenized US stocks in DeFi, as automated market makers (AMMs) are unable to comply with NBBO requirements, inevitably resulting in "trade throughs";

Rule 610(e) requires trading platforms and national securities associations to establish rules to prevent members from improperly displaying locked or crossed quotations to maintain market order and price protection.