SEC Rule 611 Proposal Could Open Tokenized US Equities

The SEC proposed scrapping Rule 611 and Rule 610(e), which could ease tokenized U.S. equity trading.

The Securities and Exchange Commission proposed amendments on June 12, 2026, to rescind Rule 611 and Rule 610(e) under Regulation NMS. The change targets order protection and quote-display rules that shape U.S. stock trading, and it could give tokenized U.S. equities more room to operate.

What changed

The SEC said it wants to remove Rule 611, which blocks trade-throughs in national market system stocks, and Rule 610(e), which restricts locked and crossed quotations across venues. It also plans to delete related definitions in Rule 600 and make conforming edits elsewhere in the market structure rules.

Chair Paul Atkins said the agency is reviewing whether Rule 611 created unintended effects over the past two decades. The SEC is now asking for public comments for 60 days before deciding whether to move ahead.

• Rule 611 protects against trade-throughs in listed stocks.
• Rule 610(e) limits locked and crossed quotes.
• Automated market makers do not route orders like exchanges do.
• Tokenized stock pools may conflict with quote-based venue rules.

For tokenized equities, the proposal matters because DeFi trading systems do not fit neatly into the current best-price routing model. Automated market makers execute against pool prices, not by checking every displayed quote across exchanges, so they can run into trade-through issues under the current framework.

Why it matters

Galaxy research head Alex Thorn argued the change could unlock tokenized stocks in DeFi markets. His point is simple: the current rules were built for exchange routing, while tokenized equity pools price assets continuously from liquidity reserves.

If the SEC shifts toward a broader best-execution standard, tokenized stocks may get more legal room inside regulated market structures. That would not just affect crypto-native venues; it could also shape how brokers, exchanges, and tokenization platforms design equity products.

The proposal also fits the SEC’s wider push to update rules for blockchain-based markets through Project Crypto, launched in August 2025. After earlier reports that tokenized stock plans were slowed by exchange concerns, this rule review gives the debate a clearer path.

The key question now is whether the SEC wants to preserve venue-by-venue quote rules or build a framework that can handle tokenized assets and AMM-style trading.