SEC NMS Rule Repeal Could Open Door for Tokenized Stocks

Rule 610(e) adds another layer. It prevents venues from displaying locked or crossed quotations. AMMs use continuous price discovery that can produce prices matching or crossing the national best bid and offer. Thorn said rescinding that rule would remove a separate technical obstacle.

If both rules fall, the biggest structural barrier for onchain stock trading disappears. That does not clear the field entirely. Exchange registration or alternative trading system registration still applies. Clearance and settlement rules through the DTCC are not affected. Thorn said the SEC's planned innovation exemption might address some of those issues. The agency has not released details on that exemption yet.

Thorn pointed to FINRA Rule 5310 as a potential alternative framework. That rule uses a principles-based best execution standard instead of rigid trade-through requirements. "The approach can accommodate decentralized trading models more effectively," Thorn said. He also referenced the SEC's planned innovation exemption framework.

TD Cowen managing director Jaret Seiberg expects the proposal to move forward. Repealing the rules has been a priority for Atkins, Seiberg wrote in a research note. He predicted final approval in the first quarter of 2027. Tokenization pilots could receive exemptive relief before that, Seiberg added. "We still expect that soon," he wrote.

The immediate catalyst is the comment period. Market participants have 60 days to submit feedback. For firms building tokenized stock platforms, the comment window is a chance to shape the final rule. The SEC signal is clear: the agency is preparing the ground for onchain equity trading. The question is how many other regulatory layers remain after Rules 611 and 610(e) are gone. Tokenized U.S. stocks would benefit directly if these rules fall. The timeline points to pilot programs running before final rulemaking is complete.