SEC Proposes Scrapping 20-Year Equity Rules, Unlocking Tokenized Stock Trading in DeFi

On June 11, the SEC voted to propose rescinding Rules 611 and 610(e) of Regulation NMS — two rules that have governed U.S. equity trading since 2005. Rule 611, the trade-through rule, prevents trading venues from executing at worse prices than available elsewhere. Rule 610(e) restricts locked and crossed quotations.

The repeal would remove the single largest structural barrier to tokenized U.S. equities trading in DeFi. Galaxy Digital's head of research Alex Thorn explained that automated market makers fundamentally cannot comply with Rule 611 — they execute against bonding curves with slippage at block-time granularity, making real-time best-price routing impossible.

The timing is notable: SpaceX (SPCX) became the first major IPO to launch tokenized shares on Solana the very next day (June 12), through Backpack Securities and Sunrise. Under current rules, such tokens exist in a regulatory gray zone. Removing Rule 611 would give tokenized equity trading a clearer legal path.

SEC Chairman Paul Atkins, who opposed Rule 611 when it was adopted in 2005, said: 'After two decades of Rule 611, it is high time that the Commission review its unintended consequences.' The 60-day public comment period opens when the proposal hits the Federal Register.

This doesn't approve tokenized stock trading outright — exchange registration, ATS rules, clearing, and settlement requirements remain. But it removes the structural impossibility that kept AMMs out of equity markets.