SEC Proposes Eliminating 20-Year Trading Rules to Remove On-Chain Equity Trading Barriers

On June 11, the SEC proposed eliminating Rule 611 (Order Protection Rule) and Rule 610(e), two regulations that have governed U.S. stock market structure since 2005. The agency argues these protections, designed for slower markets, are no longer necessary today and contribute to market fragmentation by routing trades across multiple venues unnecessarily. The SEC estimates the move could save brokerages between $54 million and $77 million annually in compliance costs.

The proposal has significant implications for cryptocurrency markets. Removing Rule 611 could eliminate a major structural barrier currently blocking Automated Market Makers (AMMs) from trading tokenized U.S. equities on blockchain networks. Industry observers view the regulatory change as a potential unlock for on-chain equity trading. The proposal enters a 60-day public comment period before final approval.