The U.S. Securities and Exchange Commission (SEC) has proposed rescinding two components of Regulation NMS — Rule 611, known as the Order Protection Rule, and Rule 610(e). The move would mark a significant shift in U.S. equity market structure if finalized.
What the proposal would change
Rescinding Rule 611 would remove the federal “trade-through” protection that requires trading centers to prevent executions at prices inferior to the best displayed quotations in other venues for NMS stocks. Ending Rule 610(e), a provision within the broader access-to-quotations framework of Rule 610, would further alter how markets manage intermarket access and related protections.
If adopted, the changes could affect order routing practices, displayed-quote protections, and the interplay among exchanges and alternative trading systems (ATSs). Other obligations — including exchange and FINRA rules and broker-dealer best execution duties — would continue to govern how orders are handled.
Background on Rules 611 and 610(e)
Regulation NMS, adopted in 2005, established a set of rules intended to modernize the national market system for U.S. equities. Rule 611 (the Order Protection Rule) requires trading centers to prevent trade-throughs of protected quotations, helping prioritize the best displayed prices across venues. Rule 610 sets standards for fair and non-discriminatory access to quotations; paragraph (e) is a component of that access regime.
Next steps
The SEC’s proposal will undergo a public comment period before the Commission considers any final action. Any rescission would take effect only after a subsequent vote and publication of a final rule.
Why it matters for digital assets
While Regulation NMS applies to NMS stocks and not to crypto assets such as Bitcoin, changes to equity market structure can indirectly affect broker-dealers and ATSs that also engage with digital asset securities. Market participants in both traditional and digital markets will be monitoring how order protection and access requirements evolve under the proposal.