On June 11, 2026, the Securities and Exchange Commission proposed to rescind Rules 611 and 610(e) of Regulation NMS, opening a 60-day public comment period. The proposal is the most significant proposed change to U.S. equity market structure in two decades.
Rule 611 — known as the Order Protection Rule or trade-through rule — was the centerpiece of Regulation NMS when it was adopted in 2005. It requires trading centers to establish policies and procedures designed to prevent executions at prices inferior to protected quotations displayed by other trading centers. In plain terms: if Exchange A is showing a better price than Exchange B, Exchange B cannot execute a trade at the worse price. It is the rule that created the concept of the National Best Bid and Offer (NBBO) as a binding constraint on order routing.
Rule 610(e), the companion rule being rescinded alongside Rule 611, prohibits exchanges and national securities associations from displaying quotations that lock or cross protected quotations — situations where the best bid equals or exceeds the best offer across venues.
"After two decades of Rule 611, it is high time that the Commission review its unintended consequences that have hindered — rather than enhanced — the long-term growth of our markets." — SEC Chairman Paul S. Atkins, June 11, 2026
The proposal rests on a straightforward premise: the U.S. equity markets of 2026 are fundamentally different from the markets of 2005. Trading is fully electronic. Order routing is automated and instantaneous. Market data is widely accessible. The technology-driven complexity that Rule 611 was designed to address in a slower, more fragmented market has itself evolved into a source of complexity, cost, and perverse incentives.
The SEC's specific argument is that Rule 611 produced the opposite of its intended effect. Rather than consolidating liquidity on lit exchanges with transparent, displayed quotes, the trade-through rule created structural incentives for off-exchange trading. Brokers routing to comply with the NBBO protection requirement found it cheaper and simpler to route through wholesalers and dark pools operating at or near the NBBO midpoint — venues that technically complied with Rule 611 while avoiding the lit exchange ecosystem the rule was meant to protect. The result, in the SEC's framing, was a massive proliferation of trading venues, increased connectivity and compliance costs, and the migration of the majority of equity volume to off-exchange venues.
Chairman Atkins has been a critic of Rule 611 since his prior tenure as an SEC Commissioner in the mid-2000s. His statement on the proposal notes that the rule was intended to encourage visible, displayed liquidity on public exchanges — and instead did the opposite.
Commissioner Uyeda's statement, while supportive of the proposal, was notably candid about what comes next:
"Removing Rule 611 would unsettle long-standing assumptions in our market structure and inevitably raise questions regarding best execution, transparency, trading mechanics, and investor confidence. While the road ahead may be less certain, it may also lead to a market structure that is more adaptive, resilient, and better aligned with how trading actually occurs today." — Commissioner Mark T. Uyeda, June 11, 2026
The proposed amendments would:
Rescind Rule 611 — removing the trade-through prohibition for national market system stocks entirely. Trading centers would no longer be required to maintain policies and procedures protecting against inferior executions relative to displayed quotes on other venues.
Rescind Rule 610(e) — eliminating the prohibition on locking and crossing quotations. Locked markets (best bid equals best offer) and crossed markets (best bid exceeds best offer) would no longer be prohibited.
Remove related defined terms from Rule 600 and make conforming changes to other Commission rules. The proposal does not rescind Regulation NMS in its entirety — other provisions, including the market data rules and tick size rules, are not part of this proposal.
The proposed replacement framework is principles-based best execution at the broker-dealer level rather than a rule-by-rule price protection mandate on every trade across venues. Brokers would be required to demonstrate policies reasonably designed to achieve best execution for their customers — a standard already embedded in broker-dealer obligations — rather than mechanical compliance with the NBBO protection rules on every order.
SIFMA, the leading trade association for broker-dealers and asset managers, issued a statement expressing appreciation for the proposal and noting that it aligns with Chair Atkins' stated goal 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." SIFMA also flagged the importance of the conforming changes to related provisions, and noted that the proposal intersects with broader discussions about extended trading hours and tokenized securities.
Nasdaq had previously filed a comment letter supporting review of Rule 611, arguing the rule had produced unintended consequences including increased dark trading. The proposal is broadly consistent with positions major exchange operators have taken over the years, though exchanges will have complex and competing interests in a world without mandatory NBBO protection.
Significant commentary in the immediate wake of the proposal has focused on implications for tokenized securities and DeFi. Alex Thorn, head of research at Galaxy Digital, characterized the proposal as "one of the biggest unlocks yet for tokenized stocks" — describing Rule 611 as one of the biggest structural barriers to tokenized U.S. equities operating through automated market makers. Under the current framework, AMM-based pools trading tokenized U.S. stocks would commit trade-throughs constantly and potentially qualify as illegal trading centers. Repeal of Rule 611 removes that structural barrier.
This dimension sits inside the SEC's broader Project Crypto initiative launched in August 2025 to modernize the regulatory framework for digital assets. Institutional researchers have suggested the repeal, if finalized, could be the most consequential piece of that initiative for traditional market structure.
The proposal is explicit that this is a beginning, not an endpoint. Commissioner Uyeda's statement identified the core open questions: best execution, transparency, trading mechanics, and investor confidence. These are not rhetorical placeholders — they are the substantive questions the comment period is designed to address, and where the most consequential practitioner analysis will develop over the next 60 days.