The U.S. Securities and Exchange Commission has proposed eliminating core trade-through protections within Regulation NMS (National Market System), which could lift major barriers for tokenized U.S. stock trading in DeFi.
On Thursday, the SEC announced proposed rescissions of Rules 611 and 610(e) of Regulation NMS, established in 2005, to promote the long-term growth of U.S. markets.
"This proposal is intended to simplify market structure and reduce costs for market participants while allowing competition, innovation, and other market forces to shape the continuing evolution of our equity markets," said SEC Chairman Paul Atkins.
Rule 611 prohibits the trade-through of NMS stocks, which means a trading center cannot execute a trade at a price inferior to a protected quotation — the best displayed bid or offer — available on another venue at the time of execution. Rule 610(e) prohibits trading centers from displaying quotations that create locked or crossed quotations in NMS stocks.
The SEC has opened a 60-day public comment period on the proposal, which also includes related definitions in Regulation NMS.
