The U.S. Securities and Exchange Commission formally proposed on June 11 to rescind two provisions of Regulation NMS, the equity market rulebook adopted in 2005. The targeted provisions are Rule 611, known as the Order Protection Rule or trade-through rule, and Rule 610(e), which governs locked and crossed markets. Benchmark analyst Mark Palmer described the move as the most consequential U.S. crypto regulatory action of 2026, ranking it above the joint SEC/CFTC interpretive guidance on securities classification issued in March.

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What the rules actually do

Rule 611 requires every trading venue to route customer orders to whichever exchange is displaying the best available price across the entire market, a standard known as the National Best Bid and Offer (NBBO). The intent was to prevent clients from receiving inferior executions when a better price existed elsewhere. Rule 610(e) prohibits exchanges from displaying quotes that lock or cross quotes on rival venues.

Both rules were written for a world of centralised, order-book-based exchanges with predictable latency.

That architecture has little in common with how decentralised exchanges operate today. Automated market makers (AMMs), the pricing mechanism behind most decentralised trading protocols, use algorithmic bonding curves and pooled liquidity to set prices in discrete settlement blocks. They cannot pause a trade to check whether a better price exists on a competing venue. Galaxy Digital's analysis concluded that a blockchain-based system offering tokenised U.S. stocks would be committing trade-throughs constantly and would arguably constitute an illegal trading center under the existing framework.

250 Digital Asset Management has called Regulation NMS a "significant structural barrier" to on-chain product development for the same reasons.

The SEC's proposed replacement shifts away from mechanical routing obligations and toward a principles-based best-execution standard applied at the broker-dealer level. Compliance responsibility would move to the intermediary rather than being embedded in every individual transaction across every venue.

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Atkins makes his position explicit

SEC Chairman Paul Atkins, who opposed Rule 611's original adoption as a commissioner in 2005, used the June 11 open meeting to signal how far the agency intends to go.

Atkins said that after two decades of Rule 611, it was high time for the Commission to review the rule's unintended consequences, which he argued had hindered rather than enhanced the long-term growth of U.S. markets.

He added that decentralised finance and on-chain software systems "will be part of our securities markets and not drowned out by duplicative or unnecessary regulation." The proposal sits within Project Crypto, a joint SEC/CFTC initiative that was launched internally in August 2025 before being formalised as a joint programme on January 29, 2026, with the stated goal of bringing U.S. financial markets on-chain.

On the same day the proposal was announced, Citigroup unveiled a Digital Depositary Receipts platform for blockchain-based private equity exposure. The same-day announcement underscored the pace of institutional movement into on-chain capital markets.

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The on-chain numbers show why this matters

The tokenised real-world asset (RWA) market, excluding stablecoins, reached $19.32 billion in market capitalisation by the end of March 2026, up 256.7 percent from $5.42 billion in January 2025, according to CoinGecko's RWA Report 2026.

Tokenised stocks specifically grew from $2.09 million at mid-2025 launch to $486.69 million in market cap, with $15.12 billion in Q1 2026 trading volume.

Ethereum hosts over 56 percent of all tokenised asset value as of April 2026, meaning EVM-compatible chains stand to benefit most from any regulatory framework that accommodates AMM mechanics.

RWA perpetuals recorded $524.79 billion in Q1 2026 trading volume, up from $313 billion for all of 2025.

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The implications reach well beyond the United States

Regulation NMS governs U.S.-listed securities, but its constraints have shaped what blockchain developers anywhere in the world can legally build when tokenised U.S. equities are involved. South Asia accounts for 20.5 percent of active traders on major global crypto platforms, according to RWA tokenization research.

Platforms like Ondo Global Markets already offer non-U.S. investors access to tokenised U.S. stocks and ETFs across more than 260 tickers, with over $650 million in total value locked and $12 billion in cumulative trading volume since its September 2025 launch. Ondo became the largest tokenised equities venue by total value locked within 48 hours of launch.

Rule 611's legal overhang has complicated the path for AMM-based liquidity pools serving these investors. Rescinding it would remove a structural conflict that product engineering alone cannot resolve.

India illustrates the regional stakes. GIFT City already functions as the dominant regulatory sandbox for tokenised securities in South Asia, with international tokenisation platforms operating there. The Securities and Exchange Board of India has been actively exploring a security token offering framework and has historically modelled its approach on U.S. rules. India's retail investment landscape is further shaped by a 30 percent flat tax plus a 1 percent tax deducted at source on crypto gains, introduced under the 2022 Virtual Digital Assets regime.

Across Southeast Asia, the market context is similarly significant: the region accounts for 81.9 percent of total RWA trading volume within the broader regional pool, according to Blockhead.co.

In Africa, where crypto adoption rose 52 percent in 2026 through approximately mid-year according to MEXC, the significance is more direct.

Nigerian retail investors currently have limited practical access to U.S. equity markets through traditional brokerages. Blockchain-settled fractional ownership of U.S. stocks could change that. Nigeria's SEC now regulates crypto as securities under the 2026 Investments and Securities Act, and the Central Bank of Nigeria permits banks to service SEC-licensed virtual asset service providers.

Kenya is finalising a crypto regulatory framework that industry analysts, cited in BitKE reporting, describe as the continent's most advanced. The framework has specifically contemplated tokenised assets in its draft rules, and is notable for placing oversight jointly in the hands of the Capital Markets Authority and the Central Bank of Kenya. Approximately 50 virtual asset firms are reportedly weighing setting up regional headquarters in the Nairobi International Finance Center.

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What comes next

The proposal opens a 60-day public comment period. The rules remain in force while comments are collected, and a final commissioner vote is required before any changes take effect.

The SEC also extended the compliance deadline for its 2024 tick-size and access-fee reforms from November 2026 to November 2027, giving the industry additional time to adapt to the broader market structure overhaul underway.

Benchmark analyst Mark Palmer had previously warned that delays to market-structure reform would sustain what he called a "structural risk premium" across digital assets, capping valuations for DeFi platforms, exchanges, and altcoins.

The June 11 proposal is the clearest signal yet that the SEC is prepared to act rather than wait.