SEC moves to unwind two Reg NMS rules that have boxed in tokenized equity market design

The U.S. Securities and Exchange Commission has opened a consequential market-structure debate that reaches well beyond traditional equities desks. On June 11, the agency proposed rescinding Rule 611 and Rule 610(e) of Regulation NMS and related defined terms, starting a 60-day public comment period on whether two of the most familiar guardrails in U.S. stock trading should be removed. For tokenized equities, the move matters because those rules have long complicated how onchain venues, automated market makers and continuously available trading systems could interact with listed U.S. shares. The proposal does not create a turnkey path for tokenized stocks, but it does attack one of the structural constraints that has made the market difficult to design around.

Rule 611 is the trade-through prohibition for national market system stocks. In practice, it is meant to prevent a trading center from executing at a price worse than a protected quote displayed elsewhere. Rule 610(e), adopted alongside it in 2005, restricts locked and crossed quotations, meaning markets where the best bid equals or exceeds the best offer. The SEC said those provisions were built for a very different era of market structure and now add operational cost and complexity while doing less to solve modern execution problems than originally intended. The proposal would also make conforming changes across related provisions if the rescission goes through.

The regulator's stated case is not framed as a crypto exception. Instead, the SEC argues that two decades of experience have shown how these rules interact with a far more fragmented equity market than the one they were supposed to improve. The commission said there are now 17 national exchanges compared with four before Reg NMS, and that off-exchange volume has climbed above 50 percent. Chairman Paul Atkins said the agency wants a simpler market structure with lower operating burdens, leaving more room for competition and product innovation to shape trading. The accompanying fact sheet makes the same argument more directly, saying the 2005 framework has increased complexity, narrowed execution choice and contributed to trading fragmentation.

That broader market-structure rationale is exactly why the proposal matters to RWA builders. Tokenized equities have to do more than represent a stock claim onchain; they need a compliant venue design, a pricing model and an execution workflow that can coexist with securities rules written for centralized market centers. A protected-quote regime and locked-market restrictions are not impossible to accommodate, but they are awkward fits for automated onchain liquidity and around-the-clock trading logic. Removing those provisions would not by itself authorize decentralized trading in tokenized U.S. stocks, yet it would reduce one of the clearest policy mismatches between legacy equity plumbing and blockchain-native execution models.

The proposal is also notable because it is consistent with Atkins's long-running criticism of the trade-through rule. In his June 11 statement, he called Rule 611 a grave misstep and argued that the rule encouraged a proliferation of trading venues, fragmented liquidity and made execution more opaque and expensive. He also pointed back to his 2005 dissent at the time Regulation NMS was adopted. That continuity matters. It suggests the commission is not making a narrow concession to crypto lobbying, but reopening a longstanding argument about whether heavily prescriptive intermarket protections still make sense in a highly automated and competitive market.

Even so, tokenized-equity issuers should not read the proposal as a blanket green light. Rescinding Rules 611 and 610(e) would not eliminate securities registration questions, broker-dealer obligations, transfer restrictions, custody standards, disclosure requirements or the operational issues around primary issuance and secondary settlement. Platforms still need a lawful wrapper for the instrument itself and a credible method for handling investor protections. What changes is the outer perimeter of market design. If the SEC follows through, future tokenized-equity systems may have more room to use onchain liquidity mechanisms without constantly colliding with assumptions embedded in older exchange-routing rules.

For now, the most important signal is that tokenized equities are becoming part of the U.S. market-structure conversation rather than an edge case outside it. The comment process will show whether exchanges, brokers, market makers and digital-asset firms see rescission as a path to simpler equity trading or as a rollback of protections they still value. For RWA markets, the key takeaway is narrower but significant: one of the rulesets that made compliant onchain stock trading especially hard to architect is now under active review at the federal level.