TechFlow News, June 12: The U.S. Securities and Exchange Commission (SEC) has proposed rescinding Rules 611 (the Order Protection Rule) and 610(e) (the Lock-up/Cross-Market Restriction) of Regulation NMS, initiating a 60-day public comment period. Alex Thorn noted that this move could remove a core market-structure barrier for tokenized U.S. equities trading on DeFi platforms.
According to the SEC’s explanation, Rule 611 requires trading centers not to execute orders at prices inferior to protected quotations displayed on other exchanges. Automated Market Makers (AMMs), which price assets based on liquidity pools and are subject to slippage and block-time execution delays, struggle to comply with this requirement. The SEC suggests that replacing the per-trade constraint with a broker-level “best execution” obligation would expand the feasibility of integrating on-chain liquidity pools into tokenized equity trading.
