SEC Proposes Scrapping Rule 611, Unblocking Tokenized Stock Trading on DEXs

Published by James Harris on June 12, 2026June 12, 2026

The SEC voted on June 11 to propose scrapping two foundational equity market rules, and the practical consequence for tokenized stock trading on decentralized exchanges is more immediate than most coverage has acknowledged. The target is two rules under Reg NMS: Rule 611, which prohibits executing orders at prices inferior to those available on competing venues, and Rule 610(e), which bans locked or crossed quotations across markets.

The technical problem those rules create for on-chain equities is specific and has blocked the sector quietly for years. Automated market makers price trades against a bonding curve at the moment of block validation. They cannot pause a transaction mid-execution to check whether the NYSE or Nasdaq is offering a better price, which is exactly what Rule 611 requires. That structural incompatibility has made compliant tokenized stock trading on decentralized venues essentially impossible, not merely inconvenient. SEC Chair Paul Atkins has opposed Rule 611 since its original passage roughly two decades ago, dissenting alongside former Commissioner Cynthia Glassman on the grounds that regulators were substituting their own assumptions for what market competition would produce. In his Stanford remarks last month, Atkins framed this as part of a broader effort to reverse a roughly 40% decline in US-listed companies since the mid-1990s by removing the friction that pushed capital formation off public exchanges.

Removing the compliance blocker is not the same as building the infrastructure.

Registration requirements, clearing, settlement, and the full stack of securities regulations built around centralized intermediaries remain entirely intact. A tokenized equity on a DEX still needs to solve custody, ATS or exchange registration, and counterparty risk before any of this becomes a functioning market. What the proposal does is remove the single most technically irreconcilable barrier, which shifts the conversation from “this is legally impossible” to “this is operationally unsolved.” That reframing matters for projects already building in the tokenized equities space, and it creates pressure on securities regulators in other jurisdictions to clarify their own positions, given how closely global market structure standards track US equity rules.

A 60-day public comment period is now open, with a final rule expected in the first quarter of 2027 according to TD Cowen’s Jaret Seiberg. That timeline gives the tokenized securities sector roughly six months after comment close to watch whether the proposal survives industry pushback from exchanges and broker-dealers who benefit from the current connectivity cost structure.