An industry group argues against a 2005 rule
The Blockchain Association backs scrapping Reg NMS order protection, and asks the SEC to accept onchain execution as meeting best-execution duties.
2 minInstitutional Crypto
The SEC proposed in June 2026 to remove Regulation NMS Rules 611 and 610(e), both dating from 2005. Rule 611 obliges a trading venue to honour a better-priced quote displayed elsewhere; Rule 610(e) restricts the display of locked and crossed quotations. The commission's stated rationale is simpler market structure and lower costs for participants.
The Blockchain Association filed a comment letter on 18 August, before the window closed, arguing that the two rules have failed to achieve their stated purposes and have instead imposed substantial and unnecessary costs on market participants for two decades.
The ask underneath the support
The letter goes further than endorsing removal. It asks the commission to accept that employing an onchain execution mechanism can satisfy the regulatory requirement for fair execution — that a tokenised security trading on a public blockchain meets the standard the rules were written to enforce.
That is the part institutional readers should weigh. Whether order protection made sense in 2005 is an argument about market microstructure; whether a public chain discharges a best-execution duty is a different question with different evidence behind it, and the letter attaches the second to the first.
The association's supporting claim — that markets have changed since 2005 and the rules now inhibit tokenised infrastructure — is uncontroversial as history and unproven as a conclusion. Nothing in the removal of a 2005 rule establishes what should replace the function it performed.
Retold from The Block. This is a summary in our own words; follow the link for the original reporting.